High-value .coms vs. current real-world demand.

[greggb]

This is a spin off of another thread where we were talking about the different marketplaces like Flippa, Namejet, etc. and topics like finding end-users.

I wish I knew what percentage of high value .coms (say $5000 and up) are developed. My feeling is that it would be a small number. If that's true, it says a lot about what's happening in the domaining industry.

Let's proceed henceforth under the assumption that the high majority of .coms worth $5000 or more aren't developed. If that's not the case then I'll have wasted your time and mine, and for that I'll be truly sorry, from the bottom of my dark heart.

If the majority of $5000+ coms aren't developed then you can say that the majority of owners aren't end-users but rather domainers. That implies two different things.

1. There are a lot of people out there waiting for the price the future will bring.
2. There currently seems to be enough domains to cover the needs of the world's current businesses.

Maybe it's just a feeling I have that the market is in stasis, as far as valuable domains and potential end-users are concerned. Maybe you have to get to $10,000 or up in order for this to be true. But I have a feeling that some of the best prices for these valuable .coms that have potential end-users would be had now, and are only going to go down in the future. I guess maybe because I don't see business really getting all that much better overall.

That, and my mind is open to the possibility of a newer technology antiquating the internet, at which time the people who paid exorbitant amounts for domains that were never developed will be crying big old crocodile tears.

It's interesting to consider that a domain doesn't exist in the real world. It can't be seen, even under the most powerful electron microscope. And because it doesn't exist in the real world, it has no real world value, like gold, or a Ferrari does.

The value of a domain name lies in the realm of our collective consciousness. We've established a system for the registration, sale, and transfer of concepts. We've all accepted this system and have agreed to play by the rules of this game.

Here's the interesting thing. When we no longer accept this system, a domain name no longer has any value. I mean, it has no value.

Even a car that's been totaled in an accident has some value in parts and scrap metal. But once we no longer accept the currently agreed upon system for registering and transferring concepts to each other, beer.com will become worthless.

And all it would take is for a new technology to antiquate the internet. Really, it's something that could cause a major shift in world power.

Food for thought.

Your thoughts, ideas, taunts, or rotten vegetables are welcome.

 

[DNScholar]

My observation is big companies generally buy high value domains ($500k and above) and than they forward that domain to existing site so that they can get organic traffic. Maybe forwarding is beneficial but I do think development is better. But also depends on that particular entity business plans.

And technology is born to "change" that's her nature so you never know where and how far it will go in the future. One striking factor of this year Super Bowl Commercials are # tags rather than dot address.

 

[garptrader]

Average portfolio turnover prior to the launch of new TLDs was about 1%. Even before the ten million plus new TLD domains were available, the majority of the best domains were still in the hands of investors waiting for a deep-pocketed buyer. Even Rick Schwartz, Michael Berkens and Frank Schilling have domains in their portfolios which are not necessarily six-figure names. But to give you an idea of the number of .COM domains available prior to the launch of new TLDs.

Frank Schilling's organization Name Administration has some 250 thousand domains 90% .COM

Rick Schwartz holds some six thousand domains more than 90% are .COM

Michael Berkens up until recently had 75 thousand domains and prior to the launch of new TLDs I am pretty sure 90% of those were .COM.

Huge Domains has a lot of so-so quality domains but is clearly a major player in the domain space owning more than two million domain names - 99% of which are .COM.

There were far more domains for sale prior to the launch of new TLDs than there were buyers willing to pay a premium price to acquire a domain. The vast majority of people looking to buy a domain are not willing to pay thousands of dollars (or even hundreds) to acquire one - even in .COM. So why have investors become delusional to think that the masses are going to suddenly change their ways and be willing to pay $XXXX for millions of domains in weird extensions? Haven't we learned from all the other TLD launches over the last decade (.mobi, .co, .me)? I guess not.

 

[Domain Lead Finder]

Huge Domains has a lot of so-so quality domains but is clearly a major player in the domain space owning more than two million domain names

I thought they were at 350.000? But I agree they are a major player.

 

[buywebsites.biz]

The value of a domain name lies in the realm of our collective consciousness. We've established a system for the registration, sale, and transfer of concepts. We've all accepted this system and have agreed to play by the rules of this game.

Here's the interesting thing. When we no longer accept this system, a domain name no longer has any value. I mean, it has no value.

This is an interesting thought - I have heard prognosticators say that people will use apps in the future and domain names won't be as in demand. I would caution that things that seem more "real" than domain names can suffer the same loss of value. For example, real estate values depend on factors we take for granted, like a functioning local government and a rule of law. When those things are severely impaired nobody wants to live there anymore (poor Michigan. I'm thinking of Flint and Detroit in particular.)

My feeling is that there are a few more "can't see under a microscope" institutions that are next in line to go away before we even get to the question of domain names' longevity. Sofi, basically a loan platform, ran an ad during the Super Bowl. Their alternate ad was more provocative and basically hinted at the end of the banking system as we know it. I really don't have that doom feeling with domain names, but there are many influential people online that believe the banking system's end is nigh.

 

[Recons.Com]

My theory is that there are two kinds of people:

- People of ideas that think of a concept, pay huge amount of money for super premium keyword to never ever complete the development, as they moved already to another idea, sit on the name for years or just forget to renew it.

- People of action who just go ahead and do the project on a crappy name with 30 letters dot com or 20 letters dot cc, get it off the ground, get rich, then spend another couple of thousand $ to get a semi-decent name and settle for it.

This would explain why so many good names are available and even for online businesses among top you can see names like Imgur, Onclickads.net, Craigslist.org, Github, Buzzfeed, Ettoday.net, HuffingtonPost, ThePiratebay.se etc.

 

[Silentptnr]

I tend to view the concept of domain names as being more like stocks or real property. Not that domain names are tangible assets like stocks and real property, but in the sense that even as new technologies are developed, I see no possibility of domain names, stocks or real property ever being completely obsolete or worthless.

In my opinion, the position that domains might become obsolete, or that investors will just suddenly lose all value in what that they have bought, is like thinking that once humans colonize other planets, homes on earth won't be worth anything. Remotely possible, yes. Probable, no.

In terms of the value of domain names, because each domain name is unique, each can have value. And as more and more domain names are registered, shorter, older domains become more valuable. Like fine wine.

Another point I would like to make is that as technology does advance, yes, some of us will embrace and move on to other technologies, however, think about how many people don't even have internet access yet. I believe that we have yet to see anywhere near the true value of exclusive domains.

Now is a time when most domain industry players, even small individual investors, are refining their portfolios. Not throwing away domain names, but rather replacing less valuable domains with more valuable domains as the learning continues.

I do use caution and suggest that all domain names investors use basic disciplines when investing in domain names. Same as they would investing in other asset classes. Buying wisely, using tools to evaluate domains, and reading about the experiences of others and about how they evaluate investments will only lead to long term satisfaction.

In terms of the development of domain names, yes, it has long been apparent that between registrars, domainers, and just ordinary people that buy domains, there are many that have yet to be developed or were bought for other purposes, such as defensive registrations, etc.

While I was at Namescon, I met a few corporate representatives that mentioned their companies owning hundreds of domains simply for defensive purposes.

I personally have a list of probably 30 or 40 domains that I keep telling myself I am going to develop some day, but it's been over 10 years and I still can't find the time. It happens all over the place. I am probably somewhere between a domain investor and a domain hoarder!

That's my two.cents!

 

[HotKey]

And all it would take is for a new technology to antiquate the internet.

Awesome topic. Real food for thought. For sure it's a real possibility. But I don't see it happening in the foreseeable future. Even with technology changing as rapidly as it does, the Internet itself and the way it is accessed via the current HTTP protocol will probably still be around for at least another 50-75 years, if not even longer.

If and when a new system gets invented that no longer requires the HTTP protocol, or IP addresses, for example, there will likely be a very slow migration to it, as well as some sort of grandfathering technique. It's definitely exciting to think about what other possible way we as netizens will connect and communicate with each other in the future, and what platforms will be used. For now I think we should feel pretty secure with the current value we hold to our domain names. I think the Internet as it stands right now has not yet reached it's prime. There is simply too much riding on it's foundation - which is a bunch of random numbers that transform into actual readable characters that we see in our url bar when we want to visit somewhere. After all, we pay good money for those 0's and 1's!

Of course, when it comes to technology, never say never..

 

[Casey L]

I would agree that a large, large majority of upper-level domains are owned by domainers, and I think there is really one reason for it: it's unlikely for a company to brand itself or name itself an extremely generic word. I know some companies own a generic term for terms of organic traffic generation, but it's not like there's a bank called "Bank, Inc." or a car company called "Car Motors".

My prediction is that in the future, top tier domains will either be purchased by other domain investors looking for appreciation of assets, or an end-user looking to form a company around it. Domain oversaturation and the demand for brand-ability seem to limit potential sales of these top domains.

 

[greggb]

What an awesome bunch of replies! That was the most interesting online discussion I've ever taken part in. I'm serious. I read each one and found my thoughts very provoked.

I'd like to reply to each reply, but the truth is that I'm very important, and my time is far too valuable for that.

Just kidding! I'm just a nobody, and I have lots of free time.

The reason I don't want to reply to each reply is because if I did, each of you might feel obligated to reply to my reply, and I wouldn't want to put you in that position--of feeling obligated. Because I'm a thoughtful guy like that.

For real, thanks for the thought you put into your replies. This is a smart group of people here at Namepros.

I would like to reply to one reply, and that was the reply where one of my assertions was challenged. You heard it. Someone dared to contradict me. And now they shall feel my wrath!

Just kidding. I'm not actually God. If I was God this world would be a much funner place. "Funner" would be the proper word to use, if I was God. I'd start by getting rid of all the lame grammar rules that make you say "more" of this, or "more" of that. If I was God you could just slap an 'er' on any word you want and call it good.

Except 'God'. You can't put an 'er' on God. There would be nothing more Goder than me, and nothing less Goder than me. There is simply me, God. The Alpha and the Beta. The first and second Rocky movies.

"Adrian!!!"

Anyway, like I said, I'm not God, so all of this is hypothetical nonsense. I'm sorry for wasting your time. I imagine that you are actually important, and your time is actually valuable. So let me get on with my rebuttal to the one who challenged me.

I'd scroll up to remind myself of who it was, but the room is shaking too bad now><><><><

Someone said they were doubtful that the internet would go away soon. To be honest I'm surprised only one person said that. I was hoping a few of you would, so I could instigate a big debate and probably piss a few people off.

It looks like I'm just going to have to respond in a civil manner, and not piss anyone off. Actually, I probably shouldn't make that guarantee. But I'll try.

Consider this. Even without the need for an emergence in sensory-modifying technology, the internet could be shaped into a much more 3-D experience. One that resembles the real world much more.

How often do you tell someone to "go" to a certain website? And what does that person do, if they decide to "go" to that website? Do they put on their jetpack and fly on over to HosterStats.com?

No. They either type it in the address box of their browser, or click a bookmark, but whatever it is they do, there's no actual "go-ing". But then how could their be any "go-ing", when the internet is flat?

The internet is flat. Yet we always make three dimensional references, usually in the form of action verbs. We surf the internet (that one's kind of gone away, hasn't it?) We go to sites. Or we visit sites. When in truth what we're doing is initiating a chain of events that will result in data being returned from a server in some obscure underground server form to our personal computers, or mobile devices. All started with a combination of keyboard and/or mouse clicks.

Now I'm not saying that we can make the internet three-dimensional. I believe that will require an emergence of sensory-modifying technology. But I believe we could make the process of getting from one place to another a three-dimensional experience. One that no longer requires the tiresome clicking of keys and mouse buttons. One that makes moving around on the internet like moving around in your house.

And why did I just get a feeling of deja vu? Is there a glitch in the matrix?

It seems like maybe I've heard this before. Maybe it came to me in a dream. Or maybe aliens of the peaceful variety came to me, took me up in their ship, and explained this to me. But then I lost the memory as the result of excessive alcohol and cannabis consumption.

Maybe the human race was counting on me to deliver this technology, and I got fucked up instead. It would be just like me.

Actually, I think it's a system people use for remembering things. Now it's coming back to me. There are these memory championships where people compete to see who can remember the most numbers, letters, or something like that. And the way some contestants accomplish this is by stashing the entities (whatever they are) in places at their home, in a mental map they've made of their house.

So it's words. But the point is that there could be a way of navigating the internet this way, in which locations around your house hold categories, or more likely themes or attributes of websites. Where pictures are used to replace the words in searches, to let you know if you're getting warmer or colder.

I realize that my previous example doesn't provide the specific details for such an experience, but then, if I had the exact details I wouldn't be here giving them away. Right now I'm brainstorming.

Don't you feel fortunate, getting to be part of my brainstorming session?

For real, I do think there's a way to make the search experience three dimensional, using data input by the end-user, relative to their lives and way of perceiving the world, and pictures.

If such an experience were to emerge, I think you'd see domain name values really decrease, ruining a lot of investors. Because you'd no longer have to click your way to amazon.com. You'd go to Amazon through a three-dimensional experience that might almost resemble a first-person shooter (video game).

Consider this. Before the internet, nobody needed internet addresses. That might sound trite. But businesses did a lot of business, and organizations existed and did their things, and so on and so forth.

So why did we need internet addresses after the emergence of the internet? Because the internet is its own entity, and its own world? Possibly. Or is it really because the navigation process on the internet is two-dimensional, instead of three.

Remember, our brains are meant to function in three dimensions very well. And the increase in possibilities when going from two to three dimensions is exponential.

Anyway, just a little more food for thought.

Speaking of food, all this thinking got me hungry.

Ta-ta for now.

 

[newdandy]

(You'd go to Amazon through a three-dimensional experience....)
but still you name it AMAZON, what if all name their experience Amazon, don't we need it be unique with something like .com??

 

[disaac81]

Saying that something will replace the internet is a bit far fetched.

The IP stack and DNS are the fundamentals of how systems reach eachother, domain names are a human readable way of getting somewhere. NO one can remember ipv6 address for example.

So..domain names will always be in demand, even IF another layer sits on top.

 

[disaac81]

A domain name and website also give the company a huge platform to showcase, interact and draw in the audience. There is no other platform quite like it.

People get very single minded when they think apps will be a preferred interface for business.. that simply wont happen. Businesses like to be unique, offer a hub to their customers and certainly be in control of their content and inspirations.

A great domain name, along with a great website are probably the strongest part of any branding, along with customer service and living up to the brand values \ promise.

 

[HotKey]

I was going to quote/unquote various sections of your last mind-altering post, but then I realized my entire reply would just be quote/unquotes and I would start to look like your favorite blog groupie. Which probably isn't such a bad thing. I really enjoy your writing. In fact, I've come to the realization that there is really only one reason to log into Namepros now. So gee, thanks a lot.

I think you've hit upon something with the 3-dimensional forecast of where the Internet may go. Spacial interaction is where the future lies. Eye movement in particular, perhaps combined with finger gestures, will takes us to our destination. All via some sort eye gear putting you into that 3-D environment, or even special haptic enabled enclosures that allow that kind of movement. Your whole picture of the actual experience being something like "rooms in house" would be bang-on. Love it!

This sort of stuff will definitely render domains useless, thus worthless. It's reminiscent of dial-up companies. We used to think the only way we could "connect" with our peers was to dial directly from our computer to their computer, or to someone running a bulletin board system. Just as we now think the only was to connect is via a URL bar, to someone running a server. And we have invested heavily in this system.

I have a little place on our current Internet where I blog my website (outside my busy schedule of haunting my favorite writers) where the name I came up for it is so amazing I thought I better tweet about about it:

The tongue click. Perhaps the final link between man and machine? This could be our backup just in case our 3dtp:// doesn't work out..

BTW, it's a Brave New World, and your new site DDTRENDS is helping navigate through it all. Nice.

 

[disaac81]

That is like saying we could just use a virtual highstreet without any addresses!!

Complete rubbish.

Things do not "just work" they need layers of technology, just like how graphical games are still "coded".

You need to go back to the basics.

Next you will be saying we don't need binary, since it is old technology.

 

[HotKey]

Unless something replaced the binary language itself (Highly unlikely, even ultra cutting-edge tech like nanobots are being based on it), you're right, a new Internet would still have to have its foundation on the various layers you're describing. But perhaps it would be used differently, with the locations you go to not requiring an actual input of a domain name to reach it.

 

[betthelot]

This thread is a great thought experiment.
But domains are here to stay. It is not enough to come up with a better system, you have to also get people to change their habits and that is very difficult. Let me explain, I think of domains as an address, similar to your home address. Now Pennsylvania Avenue named 200 years ago will still be Pennsylvania Avenue in the next 200 years. We have seen great changes in how we get to Pennsylvania Avenue from the horse and cart to the jet planes. Importantly we came up with a much better naming system for an address, being the ZIP code or Postal code. We use it as short hand to post letters or to set the Sat Nav but their is no way people will give up their Pennsylvania Avenue address, we are emotionally attached and its deep in our psyche having used this address for many years.
Same with domains they are becoming ebbed in our psyche, that a domain is the address we use to get to BBC or CNN, in the ether.
We will find quicker and more efficient ways to get there but domain names will always be the underlying address.
Reminds me of the keyboard, which is laid out as it is, designed to be used with mechanical typewriter, so they didnt jam so often, by slowing up the typing speed. We could re-arrange the keyboard so much better but try and get people to use another keyboard layout, not going to happen. Having a better naming or navigation system, doesn't mean it will be adopted.