The Domain Market in a Down Economy?

The Rover · Aug 16, 2019

It looks like we might be headed to a recession (at least here in the U.S.) in the near future. Would be cool to see everyone's opinion on whether the domain market will take a hit (if at all). Glass half full, or empty? Buying opportunity or liquidation?

Levi_charlz · Aug 16, 2019

I was going to ask the same.

Personally, I believe great Domain names are a great store of, and will hold value regardless.

myfavorite · Aug 18, 2019

I believe prices will go down.

But it will equally be an opportunity to invest in good premium domains for future sales when the economy picks up.

Ivan Rasskazov · Aug 18, 2019

Inversion in the yield curve is a warning sigh, but I would look at the credit cycle first. We aren't quite there yet in the US, though EU is flirting with a recession and a slowdown is likely either way in the US overall. As a rule, you should always keep some cash on the sidelines because it's a call option on opportunities that may become available.

In terms of specific deals, I'm sure some people may be more likely to sell for lower if markets are in turmoil or the economy is not doing well. However, having looked at domains during market downturns before, there isn't that much of a link. The industry is small and the assets are not strongly correlated with global asset markets quite yet it would seem. It's basically a Frontier Market. The only exception has been correlation to BTC last year, but that relationship needs more time to be studied appropriately.

Jv1999 · Aug 18, 2019

on reddit, ppl are also whispering about a pending recession. some say it's a myth.. others ... no.

i suppose as others have stated, it means more domains will drop and we can pick them up for less.

but on the downside, it also means those of us relying on domaining as a significant part of our incomes will have to suddenly start up new income streams.

Kai W. · Aug 18, 2019

I believe that holding cash is more important than investing in value added now.domain has commercial value and will return to where it belongs, and people who pay a high price will become very painful.

phptechie · Aug 18, 2019

The Rover said:
It looks like we might be headed to a recession (at least here in the U.S.) in the near future. Would be cool to see everyone's opinion on whether the domain market will take a hit (if at all). Glass half full, or empty? Buying opportunity or liquidation?

Economic recession is always cyclical , which means it will recover sooner if not later & will definitely take a hit on every industry that includes domain market due to shortage of cash & most importantly FEAR FACTOR.
But good & great domain names will always be in the lime light.
If you have great names , just hold on to it & do not sell it during recession.
If you get a chance to buy a good name @ cheaper price , then use the opportunity to grab it

The longer you hold , higher the profits you will earn.

As Warren Buffet says , buy when others fear & sell when others are greedy

Paul 11 · Aug 27, 2019

Ivan Rasskazov said:
Inversion in the yield curve is a warning sigh, but I would look at the credit cycle first. We aren't quite there yet in the US, though EU is flirting with a recession and a slowdown is likely either way in the US overall. As a rule, you should always keep some cash on the sidelines because it's a call option on opportunities that may become available.

In terms of specific deals, I'm sure some people may be more likely to sell for lower if markets are in turmoil or the economy is not doing well. However, having looked at domains during market downturns before, there isn't that much of a link. The industry is small and the assets are not strongly correlated with global asset markets quite yet it would seem. It's basically a Frontier Market. The only exception has been correlation to BTC last year, but that relationship needs more time to be studied appropriately.

What is BTC? AND is Frontier Market your term or is it a known term? Thank you for whatever you reply with.

Ivan Rasskazov · Aug 27, 2019

lightbear said:
What is BTC? AND is Frontier Market your term or is it a known term? Thank you for whatever you reply with.

BTC is BitCoin; I'm used to the BTC USD quote: https://finance.yahoo.com/quote/BTC-USD?p=BTC-USD&.tsrc=fin-srch

Frontier Market is a known term: https://www.investopedia.com/terms/f/frontier-market.asp

They tend to be less developed so their behavior may often disconnect with the wider capital markets. They tend to be more volatile and less liquid. Volatility can be positive or negative (in either direction). For example, some Frontier Markets didn't get hammered in 2008 from what I recall, because their less advanced banking systems were not as connected to the global financial system. I tend to use the FM term a bit more loosely to describe any developing, but not really liquid or well known market.

Weber · Aug 27, 2019

Domain names that once sold for $5,000+ don't even get a bid now.
That's not a recession, that's a depression.

Ategy · Aug 27, 2019

I wasn't a domainer the last time around, but is there any merit to the thought of a recession actually increasing end user demand for non-ultra-premium domains? Effectively the low-mid 4-figure end user sales?

I'm thinking that with a recession comes tons of layoffs and closed businesses .. but people still need to try to make money. I'd think many would turn to online entrepreneurship and we'd actually see a spike in (attempted) small-business start-ups.

Weber said:
Domain names that once sold for $5,000+ don't even get a bid now. That's not a recession, that's a depression.

No .. that's a change in the market. Significant growth of content on the internet has diluted advertising money .. which in turn killed domain parking. Combine that with profound changes to google algorithms and exact-match domains definitely have hurt .. but brandables and the overall domain market are still strong.

Steven McEvoy · Aug 27, 2019

It's going down i'm yelling timber

Yuppppp not sure how long though but this will not just effect the domain industry everythin . With the internet.

Also a lot of it is fake news

Mister Funsky · Aug 27, 2019

The Rover said:
It looks like we might be headed to a recession (at least here in the U.S.) in the near future.

If not in the near future, it will happen eventually. It is all part of global economics and cycles...been going on since man minted coins.

As someone above said, a great domain is a great domain. A business experiencing a downturn either has options...to grin and bear it, advertise more, etc. To my mind, it is the best time for a business to invest in an easy to remember (and relative) brandable or EMD...maybe both.

Jimmysun · Aug 27, 2019

I feel the recession everywhere and that's why I store domains.

Ivan Rasskazov · Aug 28, 2019

Ategy.com said:
I wasn't a domainer the last time around, but is there any merit to the thought of a recession actually increasing end user demand for non-ultra-premium domains? Effectively the low-mid 4-figure end user sales?

I'm thinking that with a recession comes tons of layoffs and closed businesses .. but people still need to try to make money. I'd think many would turn to online entrepreneurship and we'd actually see a spike in (attempted) small-business start-ups.

No .. that's a change in the market. Significant growth of content on the internet has diluted advertising money .. which in turn killed domain parking. Combine that with profound changes to google algorithms and exact-match domains definitely have hurt .. but brandables and the overall domain market are still strong.

Data from 2008-2010 shows little correlation with Financial Markets or Economies. Granted, it may be incomplete, but whatever is there doesn't show much of a pattern in terms of sales. The problem here is increase in registrations may not translate to increase in sales, and now you can get Facebook pages and the like. Those may rise in that scenario because they are more cost efficient than a domain purchase for someone who is under financial pressure.

.X. · Aug 28, 2019

I kinda expect a recession, we are due one. As long as you are a patient person and won’t miss some capital, buy - buy - buy those domain names, I do what I call “Shelf”
I buy a lot and shelf those domains, I don’t worry about renewal fees and all that. Once the economy recovers you will empty that shelf of domains you purchased during the recession.

ecalc · Aug 28, 2019

Domain investors run for the hills during economic crises. We’ve seen it twice. Read NP “The LLLL.com sales and discussion thread” from 2007-2009 for a blow by blow example. One of the few scholarly attempts to measure and model domain prices was IDNX 2006-2014. I see correlation with NASDAQ outperforming (for buy and hold) over the full period:

Date	IDNX	NASDAQ
Jan 2006	100	100
Sep 2007	165	131
Nov 2007	171	122
Jan 2009	119	65
Mar 2009	117	82
Nov 2014	212	252

Here’s Lindenthal’s monthly data, https://www.idnx.com/idnx.csv, draw your own conclusions.

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