local media insider

Live from the GeoDomain Expo: Meet City in a Box

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Just returning from the 2010 Geodomain Expo, where a number of new ventures surfaced, including Groupon offering to partner with local media and a couple of small city.com sites that are doing very good things.

But one interesting attempt to breathe some life into the market of passive domainers is "City in a Box," created by Fred Mercaldo to appeal to the, well, lazy money in the industry.

Just five years ago, Fred Mercaldo was in the golf and travel business, with a little real estate thrown in, and as such was one of the biggest advertisers on Scottsdale.com. So it seemed logical to him to buy the domain (he already owned a small, valuable portfolio) and develop it himself. Today he claims the site, designed as a city guide, sells $800,000 in revenues, mostly from travel, golf and real estate, plus directory upgrades.

Mercaldo decided to market the platform he developed to other domainers, and sold the platform for $12,500 each to eight small domainers who also own city names and work them as small businesses. The sites are designed as city guides; some local news is piped in via RSS feeds from partnering media sites.

He decided to call the software "City in a Box" and market to some domainers who are inactive publishers by offering to sell the advertising, too. It works like this: Mercaldo takes a 75% revenue share until the $12,500 is paid for, then the cut shifts to 50/50. His first partner, Nate Cohen, of State Ventures, LLC owns 40 city sites.

Mercaldo also plans to earn a revenue share on the eventual sale of the sites in which his company sells the ads, based on their increase in value. He says he and Cohen agreed that Ranchomirage.com a city site in Arizona was worth $30,000 before being monetized and has a target sales price of $150,000 after deploying City in a Box, which he'll split if the domain is sold.

By targeting passive domainers, he figures he can roll-out 40 cities a quarter, 80 by the end of the year and 150 with in 18 months. That's a tall order, but it shows there's still cake left at the table.

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Another key domainer I spoke to at the conference, Dan Pulcrano gave me his short take on newspaper sites today. Pulcrano, who owns most of the major U.S. city.com names, or at least more than anyonelse, is unique in that he also owns three weekly newspapers.

Pulcrano says that newspaper companies are making several mistakes, the first of which was not to register their city.com name before he did.

Second, he contends daily news sites continue to cover national news "that train has left the station" and third, they continue to build newsites instead of city guides.

"Even when they acquire a good name like Richmond.com they take down the city guide and put up a news site," he told me, referring to what happened after Richmond.com was acquired by MediaGeneral and promptly shifted from a community resource site to the content delivery for the newspaper.

And finally, he's not a fan of SignOnSanDiego.com and VisitPalmSprings.com. "When you register names like VisitLosAngeles.com, it just tells people to Visit LosAngeles.com", a site Pulcrano owns.

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