My favorite part of the domain conferences are the dinners. You get to sit down with some of the smartest people in the industry, enjoying great food, drinking wine, and trading life stories while picking up gems about how domains – and sometimes life – work. At one of those dinners, organised by the super connector Braden Pollock during NamesCon 2016, I happened to sit next to a man called Fred Mercaldo. I knew Fred by fame, since I had read his fascinating story featured in the legendary DNJournal by Ron Jackson.
Fred quickly glanced at my name tag featuring my company name and said: “Lisbon Media – that’s a great name”. Good start. The evening proceeded with great stories and a lot of laughters, so much so that I came out of the dinner thinking that Fred could be the tall cousin of the “Most Interesting Man in the World” from the Dos Equis commercials (watch them – they are hilarious). From basketball player, to Andy Warhol art buyer, to developing multi-million dollar businesses in real estate and with his geo domain empire including Scottsdale.com, Fred’s life story is simply amazing.
In this interview, I ask Fred what changed in the geo domain space, the actual steps to develop a geo domain from scratch and, last but not least, his personal insights about business, art and life. Enjoy the interview:
Where do you live and why?
Scottsdale, Arizona and mainly for the weather and lifestyle. After spending 20 years in Philadelphia and 15 more in Chicago, the cold weather took its toll. I like the West, and the ability to be outside 365 days per year. I also like to have the ability to be in Los Angeles or Las Vegas within an hour, and the Bay Area within 2. Finally, I am a passionate golfer, and I can play 12 months per year here.
What did you want to be as a kid growing up?
That’s an easy one….a professional basketball player. My Grandparents owned a golf driving range, and partnered with a local basketball player Tommy Gola. He was a star at Lasalle University, won a NCAA Championship in 1954, and played in the NBA for 11 years. He was inducted into the Hall Of Fame in 1976. It was called “Tommy Gola’s Driving Range”, and he visited often. I was a 7 year old kid that looked up to his 6’6” height and idolized him, as he was on television in Philly every week. He was supportive of me, and always said “Freddy, you are going to grow up to be a 6 footer!” Well, I made it to 6’3”, and never forgot my relationship with him over a 6-7 year period. I became a decent player, but hit the wall during my freshman year in college….a little thing called “limited talent” got the best of me!
How did you get involved with domain names?
After moving from Chicago to Scottsdale, I started a company there that provided golf reservation and vacation package services. It turned into a pretty large operation; 50+ employees, 500,000 annual tee times booked, and over $8,000,000 in golf packages each year. I reached out to the owner of Scottsdale.com and offered him $1,000 per month if I could be the exclusive golf partner on the site. He accepted, we generated a downloadable 52 page Scottsdale Golf Guide, complete with printable scorecards and everything. We delivered a ton of content, and we generated a significant amount of revenue through this relationship. The owner approached me one day and asked if I’d like to acquire Scottsdale.com. He had a price in mind, I said YES, took out a second mortgage on my house, and we were in business! I then started purchasing other City names, such as Tempe.com, which is a city right next to Scottsdale, and home to Arizona State University. That was basically my start in the domain business.
Throughout your career you have focused on geo domains and shared a lot of your wisdom in this 2011 DomainSherpa interview with Michael Cyger. How has the value of geo domains changed since then? Do you think it is easier or harder for someone to create a business with a City .com domain?
It is easier these days, only due to the fact that we now know so much more about development and what the visitors really desire in a City site, both locals and tourists. The business model has changed over the years; but it still comes down to a few things that you absolutely MUST do well in order to succeed. Content is the #1 challenge and priority for a City developer. Quality and relevant content on all subject matters pertaining to the specific City is the difference between profit and loss. Next, providing timely information on Events, Restaurant Guides, Real Estate, local Business information on the top 40-50 verticals, Hotels, a strong Social Media following… and getting the community involved as much as possible are all key elements. Since you harness the power of having the pure City brand name in the .com extension, you get an incredible amount of natural and direct type in traffic. If the visitor gets what they want, they will return again and again.
Your question regarding the value of geo domains since then? Many domain brokers say that prices in the geo space are weak, but I totally disagree. Just try to buy one right now! Also, for years I have stated that entrepreneurs should not be the owners of geo domains; they belong in the hands of large major media companies that have the staff that can provide the content and news and resources needed. Daily print is just about dead; the transition to the digital delivery of news is happening. The pandemic has greatly sped up the process. Look no further than the NY Times; their second quarter earnings in 2020 was a “watershed moment” where their digital revenue was higher than their print revenue for the first time ever; their second quarter digital revenue was up over 40% from the previous year… in a pandemic! Now, in contrast, look at Gannett and McClatchy… Gannett’s stock reached a low of .63 cents a few months ago, and McClatchy filed for bankruptcy. Both were solid and revered institutions, but neither embraced the transition to digital. NY Times stock is up 44% this year… enough said.
What do you feel is the most common mistake(s) for someone who owns a geo domain and wants to develop it?
Most likely underestimating the time it takes to properly build the site, generate the content, and then you can start to generate revenue. Most people are too impatient, and take short cuts. I am in discussions right now to develop 23 of the largest City names in the US, and I am projecting zero revenue for the first 6 months after launch, yet our overhead in building the content base is in the $200K per month range. Again, what I’m seeing is that the major corporations and private equity firms are starting to realize the potential these great names possess, and are now investing. Now, for smaller markets? There are absolutely great opportunities for entrepreneurs and smaller companies to thrive in building their City domains… it’s just that the revenue numbers are different, along with the associated costs.
Daily print is just about dead; the transition to the digital delivery of news is happening
If you wanted to develop a City .com domain from scratch, how would your first 3 months look like?
Assuming you hit the ground running with a competent platform, it is all about content and traffic and engagement. Most of the people in cities where their City .com name has been undeveloped need to be introduced to the site; it needs to do the basics well. Basics are it must load fast, be pleasing to the eye, have relevant content about the city, and really impress the visitor to the point that they immediately know that if they want to find out what Events are happening next weekend, or current Real Estate listings, what the Top 5 Italian Restaurants are, where to find a new Dentist, and more… they came to the right place. The site must be a resource for everything happening in the City. Building your social media presence on all the popular platforms, and interacting with local business… interviewing them, writing articles about them, and more. Then, watch the traffic stats grow, and then put together the right promotional packages for all local businesses. Like anything, it takes time.
If you had to start all over again with the development of Scottsdale.com, what would you do differently?
Great question. I am not one to ever look back and look at what probably were mistakes, as I make decisions all the time based on the facts that existed at the time. While the site right now is basically in dormant mode, as I have changed my focus to now marketing our 23 Major US City Platform, the development we did back in the early days was very successful. Within 2 years, we were generating over $3M per year in transactions and revenue; $800K of which was direct earnings, all with just 4 employees. This success led me to pursue other opportunities in launching a larger network of cities, which resulted in numerous highs and lows. Looking back regarding Scottsdale.com, we need to remember technology was different back then; and social media didn’t really exist as it does today. If I were launching today, I would probably look at recruiting 10-20 top businesses and business leaders in our market and make them partners. We would promote them exclusively in their respective categories, and employ a team of journalists to keep the content fresh and interesting.
Content is the #1 challenge and priority for a City developer. Quality and relevant content on all subject matters pertaining to the specific City is the difference between profit and loss.
What were the major insights of running your real estate business?
Getting into the real estate and property management business in 1995 was a rewarding experience. Previously, I had owned 6 apartment buildings in Chicago and upgraded and managed them, and sold them all at a significant profit, so with this experience behind me, a local developer of condo projects in Phoenix asked me to consult with him for 3 months, and to find a solution for a project he was exiting. The project was 400 condominiums near the Pointe Hilton at Tapatio Cliffs in Phoenix, and the last 100 were unsold. I came up with a concept where we would furnish them, sell them to investors, and turn them into short terms rentals. During the summer months, we leased them to relocation companies for their clients; in the winter months, we leased them out one week at a time to 4 golfers or 2 couples, which led us to becoming the dominant gold tee time provider in Scottsdale and Phoenix. I bought 3 myself, and sold 63 others to investors, all within a 6 month period. Within 5 years, the company grew to 160 units under management, and was acquired by a public company. I did however keep the golf booking portion of the company, and from 2000 to 2010, we were the leading tee time provider in the Arizona marketplace.
You spent 3 years being a trader of Andy Warhol’s paintings. What was the major insight that you learned from those years?
I would say I learned 2 major insights. The first was that I was able to be successful in an industry that was completely different from my primary business in those days. That felt GREAT. Next, it showed me an entirely different perspective regarding publishing and distribution, and collecting and selling appreciating assets. The same lessons regarding buying and selling Warhols are very much the same in the domain business. From a personal perspective, I absolutely fell in love with Warhol and his art. I met some incredible people who became close friends and associates. Francesco Scavullo, the renowned photographer; Rupert Jason Smith, who was Andy Warhol’s closest friend and his silkscreen printer; and Bruno Bischofberger in Zurich, one of the world’s most wealthy and successful collectors and art dealer. It was an incredible ride, filled with great memories and experiences.
Of all the businesses you have run, which is the one you enjoyed the most? Why?
While all of the businesses I’ve started have been enjoyable for different reasons, I would say my first insurance business in Chicago. I started it myself, then hired 7 employees, and for the next decade built a business with 150 employees, significant profit, and all with no partners, although I did have a mentor that guided me along the way, for which I am eternally grateful. Not only did this early success teach me a lot, but it was enjoyable because of the number of people I hired that helped me build the business, and they advanced personally and professionally…. and the fact that I played a significant role in their development and future success. That part is very rewarding, and something no one can ever take away from you. I probably helped in the development of 15 individuals that have all reached out to me over the years to express their gratitude as to the lessons they learned while working for me. Pretty special feeling to see them now all succeeding at the highest levels.
If you could pass just one single business advice to your children – what would that be?
None! Jean and I are blessed; both son Scott and daughter Kelly are thriving…both personally and professionally. Scott is a leading architect in the Bay Area, and Kelly is a top earning Real Estate agent here in Arizona. They have given us 5 incredible grandchildren, and we both love their spouses. I think they both learned from observing; Jean was a great role model for Scott, as she excelled at IBM for a 30 year career. Kelly watched the highs and lows of having her Dad involved in numerous businesses over the years. They both are enjoying their career choices, and their work ethics are impeccable.
How about life advice?
Happily, it has been a rare occasion where neither of them needed any advice. Actually they are both role models for us! They are both great people and parents, and their priorities are in the right places. I guess the best advice I can give is make sure you have a balance in life; there is a time and place to work hard to accomplish and get to a certain level; there is also a time and place to take a step back and enjoy yourselves. This same advice I can still learn from myself!!!
Make sure you have a balance in life; there is a time and place to work hard to accomplish and get to a certain level; there is also a time and place to take a step back and enjoy yourself.
What is your favorite non-domain related book(s), blog(s) and app(s)?
My favorite book is “The Myth Of Neurosis: Overcoming the Illness Excuse” by Garth Wood, published in 1983. I read it every year. It discusses that happiness and life is difficult, and espouses something called Moral Therapy. Meaning when you have a choice to make, make the right choice depending on your own moral beliefs, and happiness will be attained. It also differentiates between psychological illness where therapy is necessary, versus everyday mental negative feelings which are expected, and a natural part of life. This book has really made a difference in my life.
Blogs? I follow certain writers on Medium, and tend to review anything that comes from some of my friends and industry veterans, such as Ammar Kubba, Elliott Silver, Morgan Linton, Ron Jackson, Michael Cyger, the Castello Brothers, Drew Rosener, Braden Pollock, Mike Mann, Bruce Breger, Alan Hack, Peter Niederman, Nat Cohen and a few others.
Apps? Too many to list…I have 7 screens full of them on my iPhone!
How does your average day look like?
For the past year, I have been assembling an unprecedented portfolio of major City domains that I am marketing to major media companies along with private equity firms and others. This is a $25M deal; it is an important moment for the domain industry, and while the timing of the pandemic played a role in delaying our eventual acquisition success, the timing that the media industry is facing as they are now understanding that the transition from daily print to digital is NOW also aligns with our strategy and opportunity. Working with select brokers, researching the top 200-300 likely buyers and communicating with them takes up my entire day. Major media companies are all over the place; organizations that embraced the move to digital early are thriving. So, the interest in our portfolio is high, and I expect an announcement will be coming soon as to who will be acquiring this portfolio. I believe in assembling this portfolio is one of the most important things I’ve ever done; the owner/partner group behind me is tremendously supportive, and understand the processes and efforts we are expending.
How can people find you?
Very easily. Fred at GeocentricMedia.com and @fmercaldo
Any parting notes or comments?
I’d just like to express my appreciation and gratitude that you think highly enough of me to ask for this interview. Trust me, it works both ways and I’ve enjoyed following your success since the night we enjoyed dinner together in Las Vegas. Hope to see you again soon Giuseppe, preferably in your home town, as it is on my “must visit” list in the coming year! Thank you.