“The Australian domain name market is a “hot bed” for investment. And Pacific Octane is one of the domain name industry leaders in this marketplace with a huge portfolio of over 6500 Aussie domains.”

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This Interview was made possible by our friends at

Discussing all things about Aussie domains!

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James Wester is a Texan who is now proud to call Australia home.

Over the past 3 years, James and his business partner have invested heavily in the Aussie domain market via their company Pacific Octane. They believe they are now on the cusp of reaping great rewards from their business model.

Today James shares with us their background – and more importantly, where they’re heading to!

MO:
Firstly James, I know that Pacific Octane is an Aussie business – but you are American. Before we get into discussing Pacific Octane, can you tell our readers a bit about your background – and how you ended up an Aussie?

James:
I traveled to Australia in 2001/2002.  I met lots of very interesting people, mostly business people, and was very much interested in the Aussie lifestyle and culture of “she’ll be right mate”.  I had such a great time here in Australia that in 2005 when I decided it was time for a life change, I thought of Australia.  Being single and never married, I thought to myself that it would be truly terrific if I could actually move across the pond to not only make a lifestyle transition, but to discover a new phase of life with a wife.

I knew Canberra was too cold for me in the winter months and I believed that Sydney was where the angels were in the I.T. industry so I knew I had to be close to there and the coast.  I began my search not for a job, but for a hot chick.  I found my hot chick – who is now my wife and the Mother of my 2 children.  So I reckon I should give a shout out to match.com.au for that one hey.

MO:
Good one! Please can you give an overview and some background on Pacific Octane? What do you do; when did you get started; who is involved in your business etc?

James:
Pacific Octane – wow, 3 years was celebrated last week and it’s really all just a blur.  So as to your question of when did we get started, we got started on May 26th 2008.  Our company was founded by Barry Becarevic and I.  Barry was a founder of Infocomp, a software company gobbled up by GBST that was in the BRW Top 100 fastest growing companies several years running here in Australia. He has 20 years experience in the I.T. industry.

Pacific Octane has morphed into a consulting and seo company based on my background and understanding of analytics relevant to saving money by way of owning assets versus paying for clicks.  So with that said Ned, we basically teach people how to use domain names as weapons in business to overtake their competitors within their respective vertical markets and reduce their expenses long term.

MO:
Now I know you have bought some pretty impressive Australian domain names in the past few years. Can you please share with us a few of the gems in your portfolio?

James:
Would you like for me to share the gems or the bargains?  Sometimes they can be one in the same.  We feel that we actually got a deadset bargain on the .net.au record at the time when we bought creditcard.net.au for only $15,001.00. We felt the same way when we acquired electricity.com.au for only $34,059.25 in January of this year from NetFleet, the leading .au domain name market place for aftermarket sales.

We’ve also acquired v8.com.au, ride.com.au, imagine.com.au, yes.com.au, newsworld.com.au, marketanalysis.com.au and gossip.com.au which can be individual businesses.

We have also sold some significant .au domain names.  Take for instance, flab.net.au, which was a new registration for us at $22.00AUD in May of 2008.  We sold that domain name to a very savvy entrepreneur that wanted to secure his FLAB, fat lazy and bored, brand since they owned the .com.au and it was a win/win at $3,960.00 – a great return for us and a great gain for him to secure his brand.

Also take into account our latest sale of taxcalculator.com.au purchased by us for $1,500AUD May 19th of last year in a Netfleet.com.au after market auction.  We SEO’d it, worked on it, got it to page 1 of Google and sold it for $13,200.00 to E-Lodge Pty Ltd which is a quality end user for the domain name.  We did that deal because we liked the buyer, their websites, their attitude and we look forward to seeing the new website development.  We know we sold it cheap and they know they bought it cheap, but it’s a terrific testimonial for our business model and I truly believe in a win/win deal.

MO:
What would be your favourite domain name – and why?

James:
Hey now… you’ve passed along a tear jerker for me Ned. I have to say that tycoon.com.au is my favourite domain name within our portfolio of over 6,500 .au domain names.  It’s a very personal story and perhaps some of the folks that read this interview can go and visit my blog at jameswester.com and read “the hot chocolate story” that I wrote.  It defines some of the work ethic as well as marketing and passion to believe in myself and my dreams that was instilled in me by my grandma and my great grandma.

I made Barry responsible for the bidding of the domain name because I was emotionally attached to the domain name and considered my bid a liability because I felt that I would overpay.  Wow, so yeh, tycoon.com.au is my favourite domain name, but definitely not my most valuable, but my favourite and I hope that I do both of my grandma’s proud with our development.  I’ve talked with Richard Farleigh of the Dragon’s Den in the UK about the development and hopefully he’ll see the potential and come on board with us for it.  The concept for development is fantastic and it will be in memory of my grandma and great grandma.

MO:
How do you view the Aussie domain name market today – and how do you foresee the future?

James:
The Australian domain name market is the hot bed for investment.  On a global scale, you’d be an idiot not to put your money into the safe haven of the .au domain name space today.  The trend over the last 3 years since auDA has relaxed the policy has been nothing but extraordinary.

The future, if it trends in a comparable level of currency trading and the housing markets will surpass all businesses in all markets within Australia.  The ability to purchase, develop and expand the growth of online businesses that all require a domain name is unlike anything seen in Australia and the market here is not only strong in regard to economy, it’s strong in regard to offshore investment.  You only have to trace the last 6 months of industry growth to see that trend.  There’s millions being poured into the online sector and with the advancement of free apps and other technologies, we’re not even seriously at the tip of the iceberg just yet.

MO:
When we were chatting, you said  that “anyone can still register a domain name for standard registration fee and turn it into a million dollar business”. Can you elaborate please?

James:
Well, continuing on my last statement to you, I see that the Australian domain name market and online business market can only be expanded.  When one company forms a successful model, it can only be expanded upon through a better domain name and better business plan.  If some of the online businesses now are commanding millions within the market place for relatively small shares of the business, such as Scoopon.com.au and CatchOfTheday.com.au, then it only makes logical sense for the average Joe or Susie at home to be able to capitalise on the same thing with a spinoff of a better website with a better domain name, better brand and better product.  Therefore with this said, yes, it’s still very likely that someone will possibly even read this, become inspired, register a .au domain name, develop their business plan, seek funding and make a million.

MO:
You also told me that Pacific Octane has had a few “approaches” from some major players looking to get involved with you guys. What makes you attractive to them?

James:
Well, as you know Ned in business, all approaches are confidential until the ink dries.  We have had several dates on the way to the altar is fair to say and within the last few weeks, we’ve been asked out quite a lot.  The key thing to focus on, like the parallel to my personal life, is that we’re not married just yet and we’re looking for that lifelong partner.

I believe that with growth, you need more than funding.  When you look at the space we’re in and do the math, if we’ve got funding for growth and it’s a great deal financially today but doesn’t include the right chemistry of forward thinking investors and resources, then we are in a worse position in my opinion.  We could just go to the bank and borrow money for that because our bank managers at NAB love what we do.

All of the overseas investors taking down equity deals in the online businesses here in Australia could paint the picture as well.  We would prefer the company that wins the race to capture us and grow us to be in Australia and an Australian owned business.  We’d like the money to stay here.  The attractive part about us is that we’re debt free and own over 6,500 .au domain names that are valued by our algorithm to be worth $30M to $40M respectively.  Our sales data combined with that of the records of Netfleet.com.au and Drop.com.au value our business in domain name asset value alone at $16M.

We’ve sold only 18 domain names in 3 years, but with an average spend of $193 and average sale of $2,600, it doesn’t take a rocket scientist to work out the value.  If HelpMeChoose.com.au sold for $880,000 to MortgageChoice.com.au, then what is Comparer.com.au worth developed out with comparison calculation tools for not only home loans, but all vertical markets and products?  The domain name comparer.fr sold for a currency converted value of $50,000AUD in February 2008.

We also have private software and developed portals that are ready to go.  Our contract with Aussie, one of Australia’s leading mortgage companies, of course adds value as well.

MO:
How do you see the next 2 years panning out?

James:
The next 2 years of online growth in Australia with regard to domain names and online businesses is just going to be flat out crazy.  I see the industry expanding by 30% to 40% and see major corporations coming into the space to spur that growth.  Our best client, Aussie, is a trend setter with regard to vision and action within the loan and mortgage space.  Their contract with us proves that without a doubt, there is traction in the market place and those with the best horses will win the race.

The new NBN (National Broadband Network) will be getting rolled out and a contact at CommSec has shared the vigorous enthusiasm that is buzzing amongst the online professionals for what it means to their business.  I believe that Pacific Octane Pty Ltd could then be in the position to float.  It’s a very exciting time to be in this industry and I look forward to the many changes, challenges and advancements within the internet space.

MO: Thanks for those insights into Pacific Octane James. We wish you all the very best.