Is it just me or does the whole “domaining” industry – if i can call it that – nowadays just sounds like one giant infomercial.
Couple that with the new crop of domaining observers and journos (whilst struggling to keep up with all the excitement) labelling every event or piece of news with headlines such as “You will remember this day”, “Its a landmark day in the life of domaining”, “Never has there been bigger news than this”, “Stand up and take notice of this news, you will thank me in 5 years, just like I said 5 years ago” yadda yadda – when all they have to say is simply a repeat of last weeks news at best and when they only have something akin to the boy who cried wolf. The only difference being that, nowadays in domaining, the wolf never actually shows up.
I think David Carter’s piece (Ooer Missus) about lease/lease purchasing of a particular domain name is well written and is something Ive also been thinking about myself for some time. Our company was recently offered a really nice prime generic .com name by another large UK Media company and they wanted to lease this particular name to us for ~£20k/mnth (numbers slightly changed to protect the guilty). Although irrelevant in some respects, they know that we know that they only paid £20k for the name in the 1st place. And yet here they were wanting £20k per month to simply lease the name from them. And whilst the merits of which are probably a separate discussion in themselves, it does make you wonder where these valuations are coming from and why people think that something they bought 2 years ago has subsequent made an appreciative value that hasnt been seen since Frank Logan bought up a small plot at Dukes Creek simply because he liked the waterfall. Perhaps domaining too once had this charm. I know myself that many a nice exotic holiday has been paid for by something that originally cost me just six bucks – but like anything, over the past at least 2 years or so, I appreciate now that this is no more.
The traffic on the domain we were offered was negligible and so what begged the question to me was, why? As in, why is owning a super generic single word dot com of any use to anyone anymore at those prices – unless there is tangible type-in traffic that can be quantified against the revenue or traffic it generates? The problem is is that domain names no longer have the mystique that they once generated to those not in the know. As such, I think the fabulous prices domains once commanded are now a thing of the past. Simply because, where specifically does the value lie? Less people type in a domain name directly into an address bar, PPC rates for those that do are terrible at best (unless its a nice typosquat, ehem) and yet, in the domain channel, the value of generic domain names attempts to remain unsustainably high. I think that in a few years time, those guys who have been basing their retirement on the fact that they own a handful of domains that they value at in excess of millions of dollars each will begin to wonder when that magical offer is going to come in.
There is a slight silver lining to all my gloom (as many a shrewd domain investor knows), the only saving grace for domain names seems to be in the way Google hold websites with domains that are an exact match of a search term in such high regard. Provided of course there is an actual website behind it – “dag nammit” says ye common or garden domainer.
David talks about golfclubs.com and how this name is available at $35k a month, lease or lease purchase (I wasnt so sure which). Despite all the tabloid style journalism that seems to surround domaining, I dont think anyone will be leasing this name anyday soon and certainly not for this sort of money. In fact, how many raw domains are there actually out there that would command such a fee? I personally dont think there are that many. Perhaps whats more relevant, is that £20k/mnth is probably the wages of 4 or 5 members of staff.
The knock on effect is also yet to be felt. As in, if the best of the best are losing value, what happens to the millions of names out there, the plurals when the name should be singular, the hyphens, the exotic extensions and the names that make no sense whatsoever. Is it really worth investing in domain names at all anymore?
in the batlle of dumb against smart… smart will win… but it will be closer than you would think.
I’m sure if there were domain blogs back in 2000-2002, there would’ve been a lot of posts like this.
It’s a snapshot during a bad economic time.
That sounded like a speech my grandfather used to give when he heard our music. It’s as simple as this, the idea starts with a strong business plan. A good domain only makes the brand name build quicker by making it easy to remember or type. A million gets you absolutely no advertising on a national level but will get you a name that will draw lots of attention.
PS sounds like someone needs a vacation
Regarding golfclubs.com – it will be 60 months x $35,642.16 and after that time – the domain is yours.
Domaining is more fun than sex…ok maybe not as much but its still pretty awesome!
Your being a bit bearish on the domain market, which is Ok, someone has to keep it real.
But I differ on one point, quality domains is not just about the type in, but also – it’s a brand, a slogan, a logo, a motto, an ad, a marketing campaign, a generic identifier etc.. This is what users click on.
You have think like the end-user. If I was in the market of buying golf clubs I would click on GolfClubs.com rather than golfclubsforsale.com. My first impression would be GolfClubs.com would have more info than the other. It’s a category killer and you can’t beat that.
Yes, I do believe that now is the best time to invest, for all the reasons you mentioned above.
Yup, domaining on its own may or may not work out as the path to riches, but one thing’s for sure:
People who spend their whole time researching domains and/or scouring droplists aren’t usually very interesting to talk to. Actually I think I’d rather watch that obscure cable channel at 4am. “Emmanuelle in Space” actually aint too bad.
Admittedly I wasn’t around in the early days, but are you sure when you say that “the fabulous prices domains once commanded are now a thing of the past”?
There have been 7 seven-figure sales this year
The question you seem to be asking GolfClubs.com worth $1.5 million?
Probably not to a startup.
OTOH, there are any number of golf club manufacturers, established and upcoming, who could brand industry leadership just by ownership of this name.
In that sense, its worth $1.5 million just in terms of brand value. And if you see the turnovers for those companies, its not that big an amount.
Now the real question is, would any of these big players be willing to pay this much money.
Probably not. At $40k its a sureshot bargain though, probably worth at least 8x that amount.
I guess that Enforced ” Personalised Search ” from Google will make outside adversing more important & possibly the keywords more important ? The type in traffic in Europe is a myth we do not use it, we use the search engine.
The keyword AdSearch exact match stats are important, you at least know the possible footfall.
Jamien:strange blog to be looking at & commenting, did she leave you.
What does it matter how much they bought the domain name for? If they own it why shouldn’t they be able to put whatever price tag they like on it?
And regarding the name’s value, you of all people know where the value of that domain lies and how to utilize it and IMO that is why you are so pissed that they did not sell it to you.