- Rick Schwartz, who calls himself "The Domain King," started registering domain names in the 1990s.
- His sales include porno.com, for $8.9 million, and ireport.com, which CNN bought for $750,000.
This as-told-to essay is based on a transcribed conversation with Rick Schwartz, a domain investor living in Florida. It has been edited for length and clarity.
Investing in domain names started in the 15 years I lived on the road, around 1973.
Every night I'd have to call information to find numbers for hotels. This would take a lot of time out of my day.
Eventually, I started only calling hotels that had a vanity 1-800 number because I didn't have to call information to get a room. If a company had a vanity 1-800 number, they had a better chance of getting my business.
In 1993, investing in these became a lot easier, so I started purchasing vanity numbers of company names. I eventually moved on to ones that the adult industry would like, such as 1-800-Make-Out and 1-800-Sir-Love.
I got into the vanity-number business quite late, but I realized that the people in that business hadn't figured out that a 1-800 number was the same as a domain name
But I did. I started registering some of the top 1-800 numbers as domain addresses.
It'd only cost $100 to register a domain, but initially the service I used to register them with didn't actually have a way to pay them. So, in a sense, they were my angel investors; by the time they wanted payment, I'd already registered 1,000 domains and was a self-funding business.
Very early on, I registered dick.com. The way I'd make money was essentially renting the website out and linking it to someone selling a product, then I'd earn a commission.
My website wouldn't be anything flashy — literally just a black screen with two words: "Click here." And it'd take you to whoever was paying me for the link.
I'd give people traffic they'd never seen before. Prior to me coming along, the company was closing one deal in 10,000. Once I started pushing users to the website, they were closing one in 25 or one in 50.
This was because the people coming to that site were people who were curious about what was on dick.com. That type of person is a very specific individual, and that's why I was so much more likely to close a deal for them.
Porno.com was probably my most successful deal. I bought it for $42,000 in 1995. We were getting 33,000 unique visitors a day — that's a million a month — just from people searching for it directly. A guy bought the traffic from it exclusively for five years at $1.5 million a year.
What did I do with all this money I was getting? I registered more domain names
I mostly focused on one-word adult domains, as well as high-value regular domain names such as property.com. It felt a bit like I was playing Monopoly, trying to buy all the important online property.
Originally, I planned to never sell a domain for 20 years, because that's how long I thought it'd take for the internet to reach its potential. Why would I want to sell diamonds before anyone knows how valuable a diamond is?
That being said, I made my first sale in 1999, only four years after I started investing in them. I got a call from a guy who wanted to buy eScore.com for $100,000.
Nowadays, I'd never sell a domain for that cheap. But at the time, people thought domains were worthless. So selling it proved my theory that they were actually worth something.
Often, I sell a domain to benchmark
I'm like a pole vaulter, always trying to set a new world record. It's a way for me to make all the other domains more valuable.
Now I have, like, 45 sales that I can point to — many of them are multimillion-dollar sales, and the rest of them are six figures.
The best way that I can value a domain is by linking the value with the real world. How much does it cost to open a store in the real world? You've got to rent a space, furnish it, get insurance, pay for garbage, employees, et cetera. What I do is gather all of these costs and multiply them by 10 to 30 years to see what the real-world store for this time would be, then use that to come to value for the site.
One of my biggest sales early on that moved the needle was ireport.com to CNN for $750,000
At the time, no one could believe it.
It taught me a lot about selling domains to large companies. They have a budget, a time frame, and a lot of meetings. You have to learn it is their time frame and not yours. Whether you don't hear from them for three weeks or a month, it doesn't mean anything. Be patient, and let it reveal itself.
Then in 2015, 20 years after I started investing in domains, I sold porno.com for $8.88 million in cash.
I still register domains, but at a slower rate than I did back then — I've registered about eight in the last month.
It's hard to find English words that haven't been registered already, so I listen to the news and try to find new phrases. I go on Urban Dictionary and look for phrases that could be something for a company in the future.
You just have to be in front of it. I always say you've got to be at the beach before they figure out where the beach is. Your job is to sit there with your chair and your piña colada and then sell to them.