Are we seeing a market top in domain prices???

[quality]

Seems to me very silly prices have been paid by supposedly some of the of the best domainers for pretty average domains eg megayachts.com $150,000 flowers.mobi $200,000. This suggests to me that we are probably at the market top for most domains. Add any silly prices you have recently seen.

 

[Kate]

I full heartedly believe that we are in the caveman days here and the prices of domain names are a small percent to what future prices are going to bring.

I agree with this to some extent. At least the premium names are going to increase in value faster than average names

The internet is still very young and prices are very very low for domain names compared to the years to come.

Also Global Internet traffic is soaring and will continue to grow exponentially.
Traffic is the fuel of the Internet. Traffic = money.

 

[DnPresident]

Yes, its called the http://www.worldbeam.com/ "Coming Soon"
To a dot Com address near you

It reads like WorldBeam is just a website timeline generator and personal information/surfing storage structure.

Good domain names will continue to control web surfing site authorties and direction.

 

[onewordonly]

flowers.mobi sounds like a good investment for someone with spare cash although I would rather buy half a house for that much myself. Just think of how many males would use a service where they could quickly order flowers using their mobile when they have just met the girl of their dreams etc, or they just received news that a family member or friend etc has passed away... there is a huge potential in that name to make millions....

 

[Carlton]

I'll be the dissenter here. The market has heated up I agree with pretty amazing sales. But my take is that the greater domain market is being entered by various investors due to the very real (global) expansion of the internet.

I've posted occasionally on having viewed local businesses registering alt-tld's and setting up fully functional websites. This is establishing a stronger, wider foundation for long-term domain industry success.

The huge sales get most of the press attention - and HYPE - but there is a very strong undercurrent of $XXX - $XX,XXX sales that are actually better indicators of the industry's strength. I do not see a bubble in the domain industry. I think we are seeing true growth that will be sustained. More like the colonization of America as people moved westward in the land grab. We are nowhere near some end point.

 

[mhdoc]

More like the colonization of America as people moved westward in the land grab.

The "Great American Desert" started where the forests ended and included the entire midwestern breadbasket of the USA. The forest people who had settled the land to the east didn't know how to prosper in the absence of trees. It required the different knowledge of people from prairie countries, where they knew things like how to build a sod house, to see the value of the "Desert" land.

Maybe in the future, the guys who got in early on the domain name rush will be called "Sooners".

 

[SharonTucci]

I have to chime in here.... I am VERY optimistic about the domain industry right now as a whole. I think there is a lot of money to be made right now IF you are smart in what you are doing. At the same time, I was one of those in the business back when the dot com bubble burst and I saw/felt first hand the effects it had on the domain industry. I remember when it was hard to get LLLL.com's and then within 2 years, a huge percentage of them had dropped.

I think that we'll see trends online just like 'traditional' economy sees. It is inevitable. At the same time, the problem with the dot com bursting before is that a lot of money was thrown at ANY business that had a business plan because of hype. It didn't matter whether or not it was a viable *profit* model. Unfortunately what happened with domains then was like throwing the baby out with the bathwater and the market has a slump. But it's like the stock market - those that recognized a slump rather than an irrecoverable crash in domains have made a LOT of money.

I WOULD be concerned about things over a very extended period of time (ie 10+ years) for the industry simply because we don't know what the net will look like then... but the reality is that there is SO much money tied up in the current domain naming system that I think at least for the next couple of years, whatever changes that do happen won't be taking place overnight and there will be a lot of industry/organizational reluctance to move away from it. If anything, I think we're moving to things being more stable rather than less.

Look, for years now I've pointed out to people my experience in dealing with the advertising industry. Companies think NOTHING of spending millions on a single ad run. If anything, solid domains are UNDERVALUED right now compared to every other form of advertising.

Let's say worst case scenario that we have 10 more years left of domains. There's a domain XYZ.com that gets 10,000 unique daily visitors in the financial sector that is generic in nature. Doesn't matter who owns it, it will get at least that many visitors. For a company IN that sector, 1 in 20 visitors translates to a lead and 1 in 5 leads are closed representing a profit of $100. That is only a 1% conversion rate which many people in marketing would consider low. 10k visitors with 1% conversion = 100 closed sales a day or 10,000 in PROFIT. Over ONE year, that is 3,650,000$.

You can take the numbers further - what if this was a mortgage lead site or something similar where the profit was $1000 or more per closed lead? Or what if the $100 profit was PER YEAR or PER MONTH?

Seriously if anyone can even say that premium domains are overpriced or that we are heading for a crash with inflation, then get out of the business (and sell us all your premium and traffic domains at crash prices ).

 

[The Stealthy One]

Seems to me very silly prices have been paid by supposedly some of the of the best domainers for pretty average domains eg megayachts.com $150,000 flowers.mobi $200,000. This suggests to me that we are probably at the market top for most domains. Add any silly prices you have recently seen.

No, I don't think so. Sure, prices may back-pedal for a while, but surely even just ten years from now they will be even higher. Don't be afraid to have long-term vision.

 

[mhdoc]

Seriously if anyone can even say that premium domains are overpriced or that we are heading for a crash with inflation, then get out of the business (and sell us all your premium and traffic domains at crash prices ).

It's that term "Premium Domains" which bothers me. I keep looking at postings like "Get these premium domains now." and what I see are junk. I don't claim to have an infallible eye, and certainly there is lots of room for different opinions, but I think a lot of money is being wasted. For example, does anyone with experience really believe the remaining four character .coms will ever have real value ?

 

[SharonTucci]

It's that term "Premium Domains" which bothers me. I keep looking at postings like "Get these premium domains now." and what I see are junk. I don't claim to have an infallible eye, and certainly there is lots of room for different opinions, but I think a lot of money is being wasted. For example, does anyone with experience really believe the remaining four character .coms will ever have real value ?

Oh I agree with you 100% there. A lot of money is being wasted on registering senseless domains in general... but that is nothing new. I was referring to domains that are worth 5, 6, 7 and even 8 figures.

 

[Kate]

Look, for years now I've pointed out to people my experience in dealing with the advertising industry. Companies think NOTHING of spending millions on a single ad run. If anything, solid domains are UNDERVALUED right now compared to every other form of advertising.

Exactly. That's what I keep saying to prospective buyers: A good domain is the best form of advertising money can buy

 

[cache]

I agree with you, but lot of people would not buy your name for this reason.

I have to chime in here.... I am VERY optimistic about the domain industry right now as a whole. I think there is a lot of money to be made right now IF you are smart in what you are doing. At the same time, I was one of those in the business back when the dot com bubble burst and I saw/felt first hand the effects it had on the domain industry. I remember when it was hard to get LLLL.com's and then within 2 years, a huge percentage of them had dropped.

I think that we'll see trends online just like 'traditional' economy sees. It is inevitable. At the same time, the problem with the dot com bursting before is that a lot of money was thrown at ANY business that had a business plan because of hype. It didn't matter whether or not it was a viable *profit* model. Unfortunately what happened with domains then was like throwing the baby out with the bathwater and the market has a slump. But it's like the stock market - those that recognized a slump rather than an irrecoverable crash in domains have made a LOT of money.

I WOULD be concerned about things over a very extended period of time (ie 10+ years) for the industry simply because we don't know what the net will look like then... but the reality is that there is SO much money tied up in the current domain naming system that I think at least for the next couple of years, whatever changes that do happen won't be taking place overnight and there will be a lot of industry/organizational reluctance to move away from it. If anything, I think we're moving to things being more stable rather than less.

Look, for years now I've pointed out to people my experience in dealing with the advertising industry. Companies think NOTHING of spending millions on a single ad run. If anything, solid domains are UNDERVALUED right now compared to every other form of advertising.

Let's say worst case scenario that we have 10 more years left of domains. There's a domain XYZ.com that gets 10,000 unique daily visitors in the financial sector that is generic in nature. Doesn't matter who owns it, it will get at least that many visitors. For a company IN that sector, 1 in 20 visitors translates to a lead and 1 in 5 leads are closed representing a profit of $100. That is only a 1% conversion rate which many people in marketing would consider low. 10k visitors with 1% conversion = 100 closed sales a day or 10,000 in PROFIT. Over ONE year, that is 3,650,000$.

You can take the numbers further - what if this was a mortgage lead site or something similar where the profit was $1000 or more per closed lead? Or what if the $100 profit was PER YEAR or PER MONTH?

Seriously if anyone can even say that premium domains are overpriced or that we are heading for a crash with inflation, then get out of the business (and sell us all your premium and traffic domains at crash prices ).

 

[Traveler]

If there is a "bubble" I don't know how much it can burst. A truly premium name that has natural type in traffic will still be worth 5 xs or more it's yearly parked revenue. Everyday, more people have greater access to the web; we are far from saturation at this point. There are some crazy prices being paid for some names and maybe that will change, but I don't see the prices for the best and better names dropping anytime soon.

 

[Carlton]

Thoughtful posts, excellent points being made - Sharon's POV in particular. I agree that we're not near the saturation point with internet usage. In fact, people and businesses are spending more time online than ever before because all media and commerce are migrating to the net. The ad dollars of today (large as they are) are a fraction of what you'll see. PC and TV are going to completely merge with increasing options and control available to the user. EVERYONE will have a need for and desire to use the internet because it really is that powerful of a tool. A social and technological phenomenon.

If the net was nearing its peak, then maybe some bubble effects would be felt. I liken the present point as being 5 years into the release of the first automobile. Automobiles transformed the nation and became an indispensible part of American life. Let's time capsule this conversation and see where it all is in 10 years. Business, communication, entertainment, education will be hugely predictated on the internet with the domain industry being white hot.