Buying/Selling - Is it Time to Quit Domaining?

pay per click has fallen across the board so the domainers that have weak portfolios will be shown the door, the best money in domains is selling to an end user that has a plan for the domain, in order to do this then you need to hold business domains that describe a product or service, I came late to the game say late 2002 or so and my whole focus has been generic domains that describe a product or service and I never focused on flipping to another domainer, even without pay per click earnings these type of domains hold value and I have never had an end user ask for traffic stats, any domain I ever sold to an end user they were happy with the purchase and everyone of them basically said "I don't mind paying a premium for a good name" most of the complainers are developers that have this awesome plan for a name and when you ask them their game plan they describe what they wanna do with the name and how much monthly revenue it should make them yet they offer $50 for it, end users don't complain because they already have a track record of earnings and know that if the domain will help increase their earnings or branding of their company the premium price is justified, I see nothing wrong with registering thousands of generic domains and paying your yearly renewal fees strictly to profit from pay per click or possibly to resell to a business as long as you avoid trademarks and stick with a clean portfolio, the argument that the domain is just parked is weak, would be like me saying your house is ugly I should get it for $50 because I have the money to fix it up and you don't, wanna develop a domain that is just parked then make a solid offer or contact the owner and offer a partnership deal.

SpareDomains said:

pay per click has fallen across the board so the domainers that have weak portfolios will be shown the door, the best money in domains is selling to an end user that has a plan for the domain, in order to do this then you need to hold business domains that describe a product or service, I came late to the game say late 2002 or so and my whole focus has been generic domains that describe a product or service and I never focused on flipping to another domainer, even without pay per click earnings these type of domains hold value and I have never had an end user ask for traffic stats, any domain I ever sold to an end user they were happy with the purchase and everyone of them basically said "I don't mind paying a premium for a good name" most of the complainers are developers that have this awesome plan for a name and when you ask them their game plan they describe what they wanna do with the name and how much monthly revenue it should make them yet they offer $50 for it, end users don't complain because they already have a track record of earnings and know that if the domain will help increase their earnings or branding of their company the premium price is justified, I see nothing wrong with registering thousands of generic domains and paying your yearly renewal fees strictly to profit from pay per click or possibly to resell to a business as long as you avoid trademarks and stick with a clean portfolio, the argument that the domain is just parked is weak, would be like me saying your house is ugly I should get it for $50 because I have the money to fix it up and you don't, wanna develop a domain that is just parked then make a solid offer or contact the owner and offer a partnership deal.

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Well said.

taktikz said:

What's insulting is calling domainers "followers" and telling them that they are wasting their time.

You want a bright outlook? Start investing instead of trying to short sale and you'll see a bright outlook.

Just because it isn't working for you gives you no reason to bash the whole industry. Look at the automotive industry, sales are the lowest ever, the largest corporations were at the brink of going bankrupt. Does that mean that the auto industry is dead? Same with every other industry going through this economic recession.

Like Buffet says, "Be fearful when everyone is greedy. Be Greedy when everyone is fearful."

Hopefully that will motivate others to get out of that negativity that people are trying to spread.

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Thanks for your opinions and the discussion.

I actually reached five figures last year in domaining -- I was more successful than I would have imagined. I'm bashing the industry because it needs to be bashed to mold itself for the future. It's naive to think future and current technology, the economy, ICANN, and so many other factors won't change domaining significantly in a short period of time.

The domaining industry is dying simply because it's becoming obsolete. :imho:

If you're having some kind of moral crisis, open a Kiva account and bankroll some aspiring entrepreneurs from around the world with the profits you make.

Steve said:

Thanks for your opinions and the discussion.

I actually reached five figures last year in domaining -- I was more successful than I would have imagined. I'm bashing the industry because it needs to be bashed to mold itself for the future. It's naive to think future and current technology, the economy, ICANN, and so many other factors won't change domaining significantly in a short period of time.

The domaining industry is dying simply because it's becoming obsolete. :imho:

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So no more Namepros?!

SDX said:

So no more Namepros?!

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No, of course not. NamePros always adapts; we're more than domains: we have discussions on design, development, hosting, programming, legal issues, search engine optimization, a huge marketplace, and a lot more. :wave:

footodors said:

If you're having some kind of moral crisis, open a Kiva account and bankroll some aspiring entrepreneurs from around the world with the profits you make.

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I donate to Kiva and would strongly recommend it if you'd like to use money you're holding for good. :tu:

Steve said:

Thanks for your opinions and the discussion.

I actually reached five figures last year in domaining -- I was more successful than I would have imagined. I'm bashing the industry because it needs to be bashed to mold itself for the future. It's naive to think future and current technology, the economy, ICANN, and so many other factors won't change domaining significantly in a short period of time.

The domaining industry is dying simply because it's becoming obsolete. :imho:

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It's FAR from dying. This is a 2.8 Billion Dollar industry right now....and growing. It can't be ignored. That is why the domain channel has not been dropped yet. Google don't want us going to the competition. Ideally, they want to marginalize us and keep us from going elsewhere.....they just have not figured out how to stomp us out since we own the direct navigation traffic that is so highly prized.

Also, take Brazil, for example......it currently only has 22% Internet penetration.......there is a whole bunch of money waiting to be made with hand regs and domain parking. It's anything but dying. You can't ignore big money.

The whole market is exploding.....contrary to what you say. It is only your earnings going down, like most of us have experienced, that is making you say that.

Parking....in some incarnation....will always exist. So far, PPC has proven to be the most profitable business model on the Net. Try as everyone might, so far, nothing has worked better. Because of this, parking will be with us a long time.......unless.....someone gets the bright idea of taxed, I mean , tiered domain pricing to force land owners, I mean, domain owners......to develop a domain or lose it because of a few idealists that have a vision of how the future Net should be and will try to achieve that vision by any means necessary

How 'bout I eminent domain your house b/c you just live in it? You really are not using your house to its full potential. The point is, who has the right to tell anyone what the heck to do with any of their property? Nobody should....except for ICANN and your zoning authority.....and we already know how touchy a subject that is.

Ted Turner owns enough land to create a half mile wide road running from New York City to Los Angeles. Should he develop all that land? Leave it empty for the buffalos? To me, to draw an analogy, the buffalos are my surfers. He gets $10,000 for each buffalo killed by a hunter ; I get .25 cents, or something similar, for each click by a surfer on my raw land.

I get that .25 cent click b/c I bring value to the table....just like Ted does with his buffalo.

Hunting leases, as another example, get a rate per raw acre in which a hunting club pays for use of the land. The hunters come in kill deer and pay the rate per acre times the number of acres leased. Should the land owner have cleared the land and planted corn since there is a big demand for ethanol now? Would that not have been a better use than charging a usage fee for the land? Is the land owner a bottom feeder? Is he lazy, untalented, or just smart?

It goes on and on.

.

How can domaining become obselete as more and more people get on the internet?

Every single new website puts money into the domain industry. As long as that keeps happening, there's money to be made.

You just need to concentrate on the end-user, that's all. Where is the greatest growth in end-users and new websites? - cc-TLD's

From a domaining POV and for new-ish people entering the industry, com is dead. Gone. Washed up, exhausted & going nowhere. A very, very few new domainers have made money in .com over the last few years but that has been reliant on quick flips to other investors or self-created bubbles (eg LLLL buyout). I don't think you can rely on that anymore so I would adapt the title of this thread to say "It's time to quit .com"

Many cc-TLD's on the other hand still have tremendous growth opportunities and importantly receive traffic & interest from end-users.

In Australia, you can still hand register generic .au's that will more than cover their renewals in type-in traffic.

That's a good base to have & means you can move from 10 to 20 to 200 to 2000 domains without any real capital outlay. All the time you still have the sales opportunities & the development potential (including the massive SEO boost that good domains give) sitting in the wings.

Like I said -- and maybe I haven't been clear enough -- I'm not for patrolling domaining. Heck, I'm "guilty" of doing it. I just think it's not really a good practice if we're trying to advance the Web.

Apparently, we're here to make money for ourselves, not advance the Web. Like taktikz said, it's not a charity.

P.S. - My domain reselling profit from 2007 vs. 2008 was up over 300%.


Edit: Guess I'm not being clear. I think the $20 flips and hand-regs of domaining forums are going away. The $2.8 billion industry part isn't.

concept

Hey Steve, here is an oringinal concept. A year ago I hand registerered names. Yesterday a man contacts me and asks how much do I want for one of those names.

Sorry this domaining thing has not worked for you.

goodkarmaco said:

Hey Steve, here is an oringinal concept. A year ago I hand registerered names. Yesterday a man contacts me and asks how much do I want for one of those names.

Sorry this domaining thing has not worked for you.

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I'm glad it's working for you. That's working for me right now, too. I don't see success stories like that happening in the long run, though. :imho:

Seabass said:

Also, take Brazil, for example......it currently only has 22% Internet penetration.......there is a whole bunch of money waiting to be made with hand regs and domain parking. It's anything but dying. You can't ignore big money.
.

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Now that's what I'm talking about....

Let's keep one thing in mind here folks - We're ALL on the same side.
Some may have different ideas, concepts, plans and levels of success than others, at the end of the day, we're all still domainers in one fashion or another.
Keep that in mind when you sharpen your proverbial pencil and start to loose your cool when responding here.
****************

Now, onwards with my PERSONAL opinion:
I'm contemplating to drop out myself. Since Yahoo/Google have practically destroyed what's legitimate in any other trade - arbitrage, the game has become increasingly flat.
NO! I don't want to hear any arbitrage bashing or defenses - i'm just saying that the landscape has changed, for many, including me, not to the positive.

Direct navigation will naturally gravitate towards extensions that are well branded and publicized in their respective countries. .de, .co.uk, etc. are no brainers for direct navigation. .com rules anyways, and .us is being kept in the closet - only god knows why. If you have a generic or descriptive ccTLD, you should be in the clear. If not - sorry. unload the sucker and get something better on board.

Development: Whoever still thinks that development is the key to success should reevaluate. UNLESS you have a novel concept, a great idea and either the skills or pocket book to come up with some rendition of a concept that hasn't been seen or has not hit mainstreet just yet, you're SOL for the big leagues. Bottom line: Ride the bus after everyone else has already jumped on it and be happy with the few cents you make along the way, or get innovative, creative and try something outside the norm - provided you can afford to get the programming done.

Sales/Flipping: Consumers are getting educated faster than we can come up with sales arguments. Granted, there's still money to be made in direct sales to end users. However, as end users start to understand how to utilize GoDaddy's "available domain" function, this will dwindle as well. Unless you have a domain that is dead on for a company, the big $$$ are going to dry up before your very registration invoice eyes.

The Holy Grail? COLLABORATION! One owns the domain&marketing skills, the other has the programming skills, the next has the server admin skills and hardware to support any concoction and last but not least, there's the GUI guru. Maximum of 4 people that pull on the same side of the rope and have a better chance to come up with something revolutionary than any one of them by themselves.
However, since it's all a game of numbers at the end - We're beating ourselves by showing a gold rush type greed.

As always, there are exceptions. A few lucky ones that made it by other means. Looking into the present, near and far future - the lucky ones are going to be a dying breed.

On a side note - I haven't attacked anyone, I spoke in general terms. If anyone should agree/disagree with my post, please do so in non personal manner.

Again, this is my personal opinion only and as such disassociated from my staff duties here at NP.

M.

I am with SirenGirl ~ it is the Creativity of those willing to Domain and Develop using NewPartnerships and TrueBlessing is a ThankfulWorld

And what would you do with a domain like SoSuite.com ... check it out

sirengirl said:

I find some of your ideas rather interesting, however in many respects domainers aren't uniformly the same, some of us are artists, or anticipate trends, which by it's very definition is not an after current response, "followers," we may even be leaders or originators.

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Mike said:

Development: Whoever still thinks that development is the key to success should reevaluate. UNLESS you have a novel concept, a great idea and either the skills or pocket book to come up with some rendition of a concept that hasn't been seen or has not hit mainstreet just yet, you're SOL for the big leagues. Bottom line: Ride the bus after everyone else has already jumped on it and be happy with the few cents you make along the way, or get innovative, creative and try something outside the norm - provided you can afford to get the programming done.

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The problem being faced with "domain developers" right now is that the millions of dollars of internet advertising budget supposedly going to be spent in 2009, are mainly going to the coffers of these advertising "middlemen" like Google and Yahoo, and the various ad networks.

These evil empires simply tell content developers to slash each other's throats to get high page ranks with gazillion traffic to multiply the pathetic cents they earn per click if they want to make a decent living out of creating content. All they do is connect you to their advertising network, and pocket for themselves the biggest share of the income pie to boost their stock prices and make their shareholders happy.

So if domain developers want to survive on pay-per-clicks, you'll have to play their game of statistics: Drive as much traffic to your website as possible to increase the chance of someone clicking on the ads. The cheaper the clicks, the more traffic you will need! This is probably the reason why website owners resort to doing the "bizarre" stuffs, the kind of shock-and-awe type of content to really attract attention for traffic. Because content like 10 Tips On How To Get A Date, is boring stuffs that will not make you "decent" money nowadays. That's why mini-site developers need to play the statistics too - they need to churn out thousands of mini-sites from their mini-site factory so that several pennies when added together can form hundreds of dollars. This is the business model nowadays.

But "domain development" is not a dead business model. Eventhough there is already information saturation right now on the internet, the good thing about it is that you still have the power to make yourself standout from the rest of the website garbage. Unlike in the old days, if you have some brilliant idea to write about, you need to mail your write-up to the newspaper editor and hope you get lucky enough to get it published in the letter senders section of your town's daily chronicle. And if you want to earn money out of writing good stuffs, you need to pass your resume and hope to get hired by the magazine publishing houses. Nowadays, you can just get a domain and blog your mind.

If you build it, the Google bots will come.

Steve said:

For the most part, instead of advancing the Web, we hoard names we try to flip for personal profit.

.....

I do have a problem with someone buying or hand-registering a name like DiscountFishFood.com and then parking it, only to sell it to another reseller. Rinse and repeat.

While resellers are out there flipping the names to everyone, a legitimate business couldn't use a name that perfectly describes their business.

Domainers are bad for the Web if they're not contributing and instead only trying to make themselves money. Yes, they're allowed to do it, but the Web is about contributing.

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I share the same views about domaining. It's nothing more than just "scalping", because you got it first and you want to make a profit out of it by selling it to someone who desperately needs it. The more desperate he is, the more you jack-up the price tag!!! It's an ugly business model because it is based on opportunism, but that's capitalism for you. The law of supply and demand.

I guess in a capitalist economy, anything precious and in short supply is always subject to "auction" to the highest bidder. One thing I despise are the sharks, who cut the line because they have "connections" with the supplier. They get the goods first, before they auction it off to scalpers, then the scalpers will then try to rip-off the domains to the end-users. Harsh reality, but that's the business of domain flipping.

Steve said:

The domaining industry is dying simply because it's becoming obsolete. :imho:

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Not at all. It's just the beginning of opportunities.

buying selected names and keywords or upgrading names at resonable prices i agree with..

get rid of your trash names, upgrade to a nice domain...

but be selective, invest in a name that you can either develope it, or has type in traffic would be my advice...

if your buying just feel for price appreciation, park the name-i think you are buying to early....besides the .com fall out days, mortgage fall out, banks, wordwide recession is going cause prices to go down and people are scrambling for cash.

cash is king during these times.... its like the great depression i am seeing with economic pictures, dont expect a rebound in domains or the world wide economy anytime soon.

but yes, pick up a nice name if your a buyer, keep your gem names being the owner and hire web guys to do your work if need be....

good luck everyone...

Interesting discussion...


I made the point (in another context) when I first joined NP, that:


If you extrapolate the future in a straight line from the past, you'll miss every turning point in history...


I think this is just as true of the internet, and domains, as of anything else. Today's global economic disruption may possibly stimulate such a turning point. The smart move is to accurately assess how things will change (not IF) - and, how quickly - and, how it may impact our prospects.


Steve's point earlier in the thread about changes in the way the internet will be used is a good one....Nothing stands still....Everything changes, over time....And, the way things have been done, will change, too.


One mistake, I believe, would be to extrapolate the experience of the 2000 'Tech Bust' (for domains), and apply it to today's global economic 'bust' - and, conclude that the way back to domain prosperity will follow along similar lines (ie domains will regain value, for the same reasons as they had value before the bust, its only a matter of time, and economic recovery)...

One reason I think this is possible, is that 2000 was a bubble bursting within a larger fish tank (bad, but not fatal to the fish tank), whereas today the whole fish tank has blown up.

This kind of 'bust' changes a lot of things.


Could even what a domain is, or does - its purpose - change? Perhaps.

Could the notion of an 'extension' be somehow bypassed? Not impossible.

Could how domains have been used in the past to generate revenue & capital gain be affected? Very possible.

Why? Because change disrupts. A small change in technology capability can render a business model obsolete, fairly quickly.


Today's economic meltdown is the ultimate disruption. Change always follows such major disruptions. One consequence is that people re-evaluate assumptions about many things. Another is that novel solutions are found for problems that economic downturns bring. Including technology solutions.

And, the magnitude of today's economic disruption is a major change agent.


(For example - Its possible that the current sharp decline in parking revenue is not a cyclical downturn, nor a sick economy casualty. It may well be a disruptive change to a business model that's in process, and a long term trend.....partly because the 'middle men' are taking ever larger slices - and partly because more and more of the natural traffic already simply bypasses the domain type-in (xxxx.com) mechanism in Search Engines (unless they are going to an already known specific site), thus increasingly bypassing PPC pages altogether. Small - further - technology adjustments may even take parked PPC out of the game altogether).


My point is, never cease questioning the fundamental assumptions of your business. Never assume that, because, today, a domain is the gateway (real estate) on the internet, that it will always be so.

...And, especially, be alert to game-changing concepts that may arise from serious economic turbulence.....Someone we've never heard of today, for example, may be about to launch a new web-access paradigm (that may, or may not, utilize domains at all), just like Google took out its competitors with its Search algorithms, not that long ago. Or, Google might do it. Who knows?


There hasn't been a new fundamental idea on the internet since the 'domain' was invented (tho there have been many, many brilliant derivative applications for the internet, of course). By 'fundamental', I mean a change to the way the internet, itself, is perceived, and used.


'Necessity is the mother of invention'....Don't be surprised if some new 'domain-impacting' concept emerges from the rubble of this economic catastrophe over the next few years.


Maybe even someone here at NP will be the one to do it...?...:D

.

Bottom line is an addressing system will still be needed, every business and hobbyist and blogger will still need an address for someone to find them. Whether these things are affecting PPC or direct navigation an addressing system will be needed. Or you believe that the 100's of billions spent on advertising and branding websites is going away.

Here is the thing I have always felt. I am not a domainer, I have made money with domains, I have some I like, but a domainer IMO is Schilling,Ham,Schwartz, Ireit, Ireg, someone who has domains that are worth a lot without any development and make money just sitting there. I think more of an entrepreneur that uses domains in some capacity but the idea behind the domain is more important that just the domain. SEX.com or Forex.com is great before you even get to the idea. Again IMO

this is the right time to invest for long time profits ,you will get good domains for less price now.

There is some good reading in Duke's latest :

http://www.namepros.com/industry-news/552239-15-domain-industry-experts-break-down.html

http://www.dnjournal.com/cover/2009/january.htm

Please take the time to read all of the Articles/Interviews - Several touch on the Balance of Buying/Selling and how it will "have to" change for many of us. Everyone has screamed "Develop - Develop - Develop" for years ... Which isn't a bad thing mind you - But even well developed sites will be hitting tough times now. Advertising drives the entire Industry and with the Global economy in trouble - There will be much less Advertising being bought period.

netfleet said:

How can domaining become obselete as more and more people get on the internet?

Every single new website puts money into the domain industry. As long as that keeps happening, there's money to be made.

You just need to concentrate on the end-user, that's all. Where is the greatest growth in end-users and new websites? - cc-TLD's

From a domaining POV and for new-ish people entering the industry, com is dead. Gone. Washed up, exhausted & going nowhere. A very, very few new domainers have made money in .com over the last few years but that has been reliant on quick flips to other investors or self-created bubbles (eg LLLL buyout). I don't think you can rely on that anymore so I would adapt the title of this thread to say "It's time to quit .com"

Many cc-TLD's on the other hand still have tremendous growth opportunities and importantly receive traffic & interest from end-users.

In Australia, you can still hand register generic .au's that will more than cover their renewals in type-in traffic.

That's a good base to have & means you can move from 10 to 20 to 200 to 2000 domains without any real capital outlay. All the time you still have the sales opportunities & the development potential (including the massive SEO boost that good domains give) sitting in the wings.

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Regarding cc-TLD's, I've been hesitant to invest because (unless the country is English-speaking) why would someone want an English word domain combined with a cc-TLD? For example, Happy.sk????

metrisoft said:

Regarding cc-TLD's, I've been hesitant to invest because (unless the country is English-speaking) why would someone want an English word domain combined with a cc-TLD? For example, Happy.sk????

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No matter what .COM will always be King, but some phenomenal ccTLD's are worth the registration as some people look beyond the extention.
...
P.S. I hope things will be better for DOMAINERS also as Barack Obama is being inaugurated at this moment!

metrisoft said:

Regarding cc-TLD's, I've been hesitant to invest because (unless the country is English-speaking) why would someone want an English word domain combined with a cc-TLD? For example, Happy.sk????

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You're absolutely right. IMO you need to match the language to the cc-TLD. LLL, numerics etc in some cc-TLDs might we worth taking a punt on though if you are keen...

Plenty of english speaking cc-TLD's though don't forget eg .au, .co.uk, .za

I'm going to withdraw from this discussion because I feel it would better coincide with the viewpoint I've expressed here to focus my energies on building my upcoming startup than to respond to talktikz, etc. point-for-point. Steve neatly represents my viewpoint, though Seabass brought up some interesting ideas as well. I hope we all meet in person one day to engage in productive dialogue and internalize where the other person is coming from.

I only wanted to toss in that I've actually been experiencing record sales right now -- $5K/month to end-users alone -- so my drive to quit to domaining has nothing to do with lethargy or lack of success. In fact, throughout today alone I've received three unsolicited end-user inquiries on my domains PLUS two end-user responses to solicitations of mine. I own merely ~400 domains in all.