legal Balance of payments issue from leading industry domainer/broker Kevin Leto

[Spex]

you've made more money from me then you sent me so you
are ahead already, so quit distorting stuff.

I'm no uber domainer or anything but your above post here makes no sens at all. Until he has made the XX that was promised, he can complain as much as he wants. Who are you to tell a client to back off?

If someone walks up to a car dealership and pays $50k for a BMW, but receives a 10-speed instead, does he have the right to complain or should he just shut up because he's already better off ? (10-Speed > walking)

And to those who are just writing this off as "it's business", like the OP said...give me your money. I'll make some promises and when things slow down you'll understand right?

 

[KRL]

I'm no uber domainer or anything but your above post here makes no sens at all. Until he has made the XX that was promised, he can complain as much as he wants. Who are you to tell a client to back off?

Spex, all the payments will still be completed. I just said I needed to restructure the platform and recapitalize it since the primary way to make it work properly is a functioning marketplace for buying and selling domains and advertising sales has changed so dramatically over the past several months.

I'm not abandoning ship on this and ironically I've gotten e-mails from several domainers that think this concept could work successfully with a few more tweeks and when the market recovers and they may use the idea and do it on their own.

 

[jasdon11]

Acro I hate like hell giving out so much of my ideas cause I know someone will end up copying them
but here's how the idea evolved.

LOL, I think you can rest easy that nobody's going to rush to copy this one.

 

[KRL]

LOL, I think you can rest easy that nobody's going to rush to copy this one.

The domainers with financial backgrounds are the ones that see the logic where they use this concept and bring a capital partner to the
table when selling to an end user so the purcahse becomes insanely affordable for the buyer and profitable for the investor and the domainer.

I know lots of people don't really understand all the intricies of this idea and are laughing at it, there are others who thinks it's viable when
when the buying and selling environment is more liquid and you could indeed generate a higher rev stream during the term then the cost of capital.

 

[eeedc]

you could indeed generate a higher rev stream during the term then the cost of capital.

When your cost of capital is 20% or more, you are facing an uphill battle and likely beating a dead horse.

For example if some fool were to pay 20% financing to buy Shrewd (dot com) from me at a high wholesale of $10K, after one year he would owe $12K. After paying $2K interest to me every year, after 10 years, he would have paid me $30K.

If someone with better financing were to bank-finance at 5% a $10K loan, after one year he would owe $10,500K. After paying $500 interest every year, after 10 years, he would have paid $15K.

A person with cash on had could purchase for $10K cash and pay no interest, but there is the opportunity cost of interest he could have got from putting the $10K in a bank or in the stock market.

Paying 20% interest is only a good business decision when 1) you have no other options and 2) you don’t have to hold the financed item for long paying 20% interest or 3) you somehow are able to purchase items for half of what they are worth.

 

[eeedc]

It’s interesting reading this thread, but in a way I feel guilty since it’s like watching two Charlie Sheens cracking up under financial stress. People rarely listen, but maybe the comments on this thread will help them.

 

[razorblade]

Here is a question for Leto to answer - While you are 'reshuffling' and 'tweaking' your BS, why dont you IN THE MEANTIME PAY PEOPLE BACK THE MONEY YOU OWE THEM - IMMEDIATELY.

Sell your house if you have to. Move in with the inlaws. But pay what you promised as per the contract. As I stated in my facebook pms....you are only as good as your word.....

And guess what - Its in the toilet right now.

 

[FormerDnForumer]

The owner of a $3M name, men.com, can't pay back $1600 to avoid reputation destruction?

Whether it's ego, denial or not having the money, it doesn't look good from any vantage point, Kevin. The worst part of it is you're busy promoting your botched idea in the middle of a thread that's taking you down. Are you even awake?

I mean this with all sincerity: I'm sorry to hear about your mother. You seem like you're under a lot of stress. The best thing you can do is borrow $10k against men.com and pay the 10 or less people you owe money to and save your rep and your sanity.

 

[mike031]

Oh how nice to see the big dogs jumping in... Now I am waiting for Berkens to write a story that men.com receives a few thousand uniques per month according to compete.com and that once this domain is parked everybody can get their moneys owed ---- bingo!! LOL.

 

[Cartoonz]

Spex, all the payments will still be completed. I just said I needed to restructure the platform and recapitalize it since the primary way to make it work properly is a functioning marketplace for buying and selling domains and advertising sales has changed so dramatically over the past several months.

That is what makes this look a little sketchy Kevin... I completely understand the premise of what you were trying to do but I also fully understand the frustrations of the OP that brought him to the point of starting this thread. His issue is that you fulfill your obligations to him, in a timely manner - as per the terms of the contract. When you make statements like "restructure the platform" it does sound a little Madoffesque... just pay the people involved in this in the timely manner you agreed to and there is no problems. From my perspective, it was you that calculated the risk on your idea and you assumed 100% of that risk when you structured the deal(s)... it certainly does not sound like this was structured as an investment offering, complete with an assignment of risks, etc... It sounds like "You pay me $xxxx now and I return 120, 130, 100whatever percent in equal monthly payments over Z amount of months"... that means just that, you make the payments. "Recapitalizing the platform" really needs to mean Kevin takes a hit and funds the payments himself at this point because if it means what it sounds like - getting other people to participate in the program - well, that IS a Ponzi move.

I've got no issue with Kevin, all dealings I've had with him have been completely straight forward. It sucks that the market climate is what it is right now and I completely understand how he is upside down on this adventure. The OP is justifiably upset with the untimely payments but it does sound like he IS receiving them... lesson learned - do not loan money you expect to live on. Doesn't make late payments ok, but you see my point...

 

[KRL]

Hi All,

Let me illustrate the value here in a "case study" manner so more will understand how this benefits the buyer of
a fixed income domain.

I'll use Andrew Allemann for the case study since he was the first to buy a fixed income domain.

Andrew paid $750 for GolfingVideos.net. He then got full ownership and the domain pushed to his Fabulous account.

Andrew next made $550 in the first year from 11 fixed income payments of $50 each.

Here is Golfing's traffic for 2010.

Month UV's Visitors Page Views

Jan 2010 93 148 793
Feb 2010 78 201 400
Mar 2010 101 344 829
Apr 2010 124 321 1420
May 2010 113 374 1318
Jun 2010 191 772 991
Jul 2010 173 1448 1624
Aug 2010 161 678 776
Sep 2010 85 282 379
Oct 2010 58 189 280
Nov 2010 57 198 270
Dec 2010 79 224 359

Total 1313 5179 9439

So now lets say Andrew decides "Hey thanks Kevin for the $550 of income to this point from my 11 payments so far,
I'm going to just sell the domain now and cash out of the program".

So he bought Golfing for $750, he's made $550, and he's decided to opt out and sell at that point,
so his net cost of acquisition is now only $200.

Next, I'd like a few domainers here to chime in and post what they think Andrew could sell GolfingVideos.net if he put
it on the market today.

Your estimates: ?

Andrew is a very astute buyer so I'm sure when he acquired it in the back of his mind he calculated
the worse case scenario of what the domain could resale down the road.

Let's say he could only get $500 for it after the one year of owning it. Anyone doubt that? I think
he could get even more, but lets keep it that he could only get $500 for it.

So he posts it for sale and finds a buyer for $500.

Now do the math. He bought the domain for $750. He made $550 in income and then lets say sold it for only $500.

So his net investment cost was $200 and he flipped that for $500 and thus made
a $300 profit on a $200 net cost of investment for the year.

So even figuring if someone only stay in the program for 2/3rd of their term they could
still make it quite profitable.

And even if someone stayed in for 1/3rd they could exit and still make money by reselling
the domain.

 

[Tia Wood]

Andrew paid $750 for GolfingVideos.net. He then got full ownership and the domain pushed to his Fabulous account.

Andrew next made $550 in the first year from 11 fixed income payments of $50 each.

Everything makes sense to me up to this point. I don't understand where the revenue would come from? Parking? Ad revenue? And why is it "fixed"? Is this like a backwards loan?

 

[mike031]

@ Kevin, what Andrew added to his portfolio is just another long-shot and lets be frank, a pretty crappy domain.

My gut feeling was that nobody is searching for "golfing videos" and I just did the keyword research to double check... Golf videos is the correct term.

Hell, even GolfVideos.net isn't worth mid-high $xxx

But then again... 90%+ of Andrew's domains are crap so it'll fit right in!

http://www.google.com/search?q="brainstorm+labs"+site:domaintools.com&hl=en&num=100&

 

[KRL]

Everything makes sense to me up to this point. I don't understand where the revenue would come from? Parking? Ad revenue? And why is it "fixed"? Is this like a backwards loan?

Hi Tia,

Cause a lot of clients would e-mail me and ask if I could recommend the best parking company, the best way to monetize, etc. I saw a need in
the marketplace to create more of a predictable income vs the up and down so many experience switching from one parking company to the
next and only have maybe one or two produce good results.

So i worked to figure a monetization system that would be better performing.

Revenue comes from ads and buying/selling domains for a higher ROI than the cost of capital for the year.

 

[David G]

Hi Kevin, Thanks for the excellent example. Makes sesne now but I don't see how anyone could make money on this deal, especially you. The market and ppc was almost as poor Jan 2010 than it is now but you still went into it knowing about the bad ppc and resale market.

It's a nice site but I doubt its getting more than insignificant revenue from Adsense even with its traffic.

The traffic is surprising since as you know, .net names get basically no typein traffic. How can it get its traffic from SEO when I did not see it listed in the first 10 pages of Google:

http://www.google.com/search?q="gol...=N&bav=on.2,or.r_gc.r_pw.&fp=a50d8bbb4089c98a

 

[bmugford]

Next, I'd like a few domainers here to chime in and post what they think Andrew could sell GolfingVideos.net if he put
it on the market today.

Your estimates: ?

Andrew is a very astute buyer so I'm sure when he acquired it in the back of his mind he calculated
the worse case scenario of what the domain could resale down the road.

Let's say he could only get $500 for it after the one year of owning it. Anyone doubt that? I think
he could get even more, but lets keep it that he could only get $500 for it.

I think GolfingVideos.net is pretty low value name as a stand alone domain.

“Golf Videos” is the dominant term.


“Golf Videos” – 9900 Phrase / 3600 Exact
“Golfing Videos” – 140 Phrase / 91 Exact


I don’t see anyone paying $500 for this domain unless it has good traffic and revenue.
If someone really wanted the term they could just hand reg the .ORG


Brad

 

[David G]

Agree, I doubt it's worth much in today's market. The fact it's not the preferred term and is a .net drags down the value a lot.

Very good point about .org being unreg'd which is FAR superioir quality to the .net and the .org is also far more likely to get typein traffic vs the .net

I wonder why why in the world Andrew Allemann made the deal instead of just hand reg'ing an alternate extension (assuming the org was also unreg'd in Jan 2010) along with all the other ext like they are today (except .net and .com)?

I think GolfingVideos.net is pretty low value name as a stand alone domain.

“Golf Videos” is the dominant term.


“Golf Videos” – 9900 Phrase / 3600 Exact
“Golfing Videos” – 140 Phrase / 91 Exact


I don’t see anyone paying $500 for this domain unless it has good traffic and revenue.
If someone really wanted the term they could just hand reg the .ORG


Brad

 

[jasdon11]

Hi All,

Let me illustrate the value here in a "case study" manner so more will understand how this benefits the buyer of
a fixed income domain.

I'll use Andrew Allemann for the case study since he was the first to buy a fixed income domain.

Andrew paid $750 for GolfingVideos.net. He then got full ownership and the domain pushed to his Fabulous account.

Andrew next made $550 in the first year from 11 fixed income payments of $50 each.

Here is Golfing's traffic for 2010.

Month UV's Visitors Page Views

Jan 2010 93 148 793
Feb 2010 78 201 400
Mar 2010 101 344 829
Apr 2010 124 321 1420
May 2010 113 374 1318
Jun 2010 191 772 991
Jul 2010 173 1448 1624
Aug 2010 161 678 776
Sep 2010 85 282 379
Oct 2010 58 189 280
Nov 2010 57 198 270
Dec 2010 79 224 359

Total 1313 5179 9439

So now lets say Andrew decides "Hey thanks Kevin for the $550 of income to this point from my 11 payments so far,
I'm going to just sell the domain now and cash out of the program".

So he bought Golfing for $750, he's made $550, and he's decided to opt out and sell at that point,
so his net cost of acquisition is now only $200.

Next, I'd like a few domainers here to chime in and post what they think Andrew could sell GolfingVideos.net if he put
it on the market today.

Your estimates: ?

Andrew is a very astute buyer so I'm sure when he acquired it in the back of his mind he calculated
the worse case scenario of what the domain could resale down the road.

Let's say he could only get $500 for it after the one year of owning it. Anyone doubt that? I think
he could get even more, but lets keep it that he could only get $500 for it.

So he posts it for sale and finds a buyer for $500.

Now do the math. He bought the domain for $750. He made $550 in income and then lets say sold it for only $500.

So his net investment cost was $200 and he flipped that for $500 and thus made
a $300 profit on a $200 net cost of investment for the year.

So even figuring if someone only stay in the program for 2/3rd of their term they could
still make it quite profitable.

And even if someone stayed in for 1/3rd they could exit and still make money by reselling
the domain.

This is nothing but fluff without knowing where the $550 came from to pay Andrew. It must've been from other investors, no? And now the income from new investors has dried up...

I don't think anyone believes it came from monetization, do they? Anyone?

 

[KRL]

Jadson,

Look at the math of the next phase idea for rev generation from the seller side (my side) when you
launch the FID platform on a larger scale basis.

Let's say you sell a fixed income domain for $500.

You then go and reg 50 good keyword domains. (50 x $7.99)

Place those on a "Reduced Until Sold" platform starting at $95 each and reducing down to $19.95.

A few will sell at $95, a few at $75, a few at $50 and most at the bottom prices of $39.95 $29.95, $24.95, and $19.95.

$95 x 2 = $190

$75 x 2 = $150

$50 x 2 = $100

$39.95 x 5 = $200

$29.95 x 5 = $150

$24.95 x 5 = $125

$19.95 x 5 = $100

Selling just half of the new reg'd domains generates $1000

Deduct $500 cost on a 1 year term FID deal. Now besides any ad sales or regular large domain buy sales,
on the Reduced Until Sold platform you're profitable and you let go of the ones that didn't sell.

 

[Tia Wood]

It sounds plausible to me. Add that up with Kevin's network and credibility, etc, if someone were going to pull a scam, I would think it would be on a much bigger scale than this considering the reach Kevin has. It sounds reasonable that it was a business idea that just didn't work out. Hopefully I am right and you guys can all work it out.