My question to Godaddy's CEO at NamesCon: Domain Liquidity for the industry

[Rob Monster]

Earlier this morning, I wake up to seeing a lovely comment from Shane Cultra on his blog:

To my eyes, that comment from Shane is actually pretty crazy. Ironically, many people told me unsolicited, that my question was the highlight of the Q&A. This is not the first time that Shane has spoken out of school against me with trash-talk and it probably won't be the last since it shamelessly drives up his page views for his affiliate site. I don't know if anyone has a video of the Q&A section of Aman's keynote but if so, would be great if someone would upload the actual video clip. I believe anyone who objectively reviews my question will find it to be rather selfless. It was a question about domain liquidity. There were 2 parts, and I believe they were reasonable and sincere.

Part 1: Domain Liquidity via Loans

As some folks know, Epik provides interest-free loans secured by domains. This is popular but we cannot lend to everyone in the amounts that everyone might like. Compared to Godaddy, we are a relatively small company without access to the vast pool of capital that Godaddy has access to. I asked if Godaddy would consider extending domain loans to its customers. The lending model is proven. Godaddy has the ability to scale it to a much greater degree. Rather than forcing Godaddy customers to abandon domains to their expiry stream, why not allow Godaddy customers with liquid names to borrow against their portfolio? It seems reasonable to me.


Part 2: Working with US Congress to make domain names a bankable asset.

I have also been a long-time believer in the potential for domain names to be a respected asset class. The challenge there is that the banking industry does not recognize domains as a bankable asset class. People can donate domains to non-profits and can get a write-down for their investment basis, but if you go to a bank and ask to borrow against a 3N.com, they have no idea what you are talking about. The House subcommittee on banking could engage here but we would need some lobbying power to make that happen.

For anyone who has ever studied the history of the housing market, the correlation between the availability of borrowing capacity and the prices of the associated asset is indisputable. When credit is available, asset prices go up. If domain owners could more methodically borrow against their domains at conventional banking rates rather than only from hard money pawnshops that dominate the landscape today, it would be a game-changer for making the pie bigger for everyone.

I will be interested to hear what folks have to say on this very reasonable topic about domain liquidity that can greatly impact the future of the industry.

 

[Domain Shane]

I don't see anything wrong about saying that he is Indian in the context of associating him with someone who is knowledgeable about the domain market and empowerment strategies in India, why would you think of that as being something negative.

IMO

My apologies. I guess I was not aware that India was known for their empowerment strategies.

 

[Rob Monster]

Shane - I am not sure how much of the rest of the world, you have seen but this should help:

https://www.thenational.ae/world/as...equality-levels-for-almost-a-century-1.628196

Domains can lift up a lot of people and that is really cool.

 

[oldtimer]

My apologies. I guess I was not aware that India was known for their empowerment strategies.

As far as I know India is one of the most successful emerging economies and people are being empowered not only in the digital asset and web presence fields, but also in many other areas such as in Industry, aerospace, manufacturing, agriculture, medicine, education, and real estate just to name a few.

IMO

 

[oldtimer]

Shane - I am not sure how much of the rest of the world, you have seen but this should help:


Domains can lift up a lot of people and that is really cool.

Rob, most of the growth in emerging economies around the World has happened in the last six years which is mostly after the dates shown in your graph, but I agree that there is still a big income gap between the lower classes and the elites which needs to be fixed through more empowerment.

IMO

 

[Rob Monster]

Rob, most of the growth in emerging economies around the World has happened in the last six years which is mostly after the dates shown in your graph, but I agree that there is still a big income gap between the lower classes and the elites which needs to be fixed.

IMO

Winner take all is a global problem.

The project called DigitalTown which Shane dismisses aimed to solve it but it was very hard to do that in undercapitalized pink sheet company where you are not the majority owner.

For those who missed it, my banned TED talk about DigitalTown is here:

And backed up here:

https://us.tv/videos/watch/ab0d491e-b39a-4ac9-acbf-3c6cbb75e0ec

Lifting folks up to financial independence is not exactly a new focus for me. And yes, sometimes that interferes with the status quo. Pity.

 

[lock]

Self promotion gets a bit much I get pulled up on requested links let alone posting ads.

 

[ExploitOdds]

Coming back to the point:

Is it not reasonable that Godaddy management could use their legal and financial resources to shepherd a long overdue process to make domains bankable?

Is it not reasonable that Godaddy could extend trade credit to customers who have non-horrible domains instead of having them drop names that they would otherwise keep?

Godaddy has very deep competency in financial engineering. This should be right in their wheelhouse.

Id imagine their evaluation/appraisal tool would be adjusted if they were loaning or being a guaranty for those loan values . . .

 

[oldtimer]

Winner take all is a global problem.

Lifting folks up to financial independence is not exactly a new focus for me. And yes, sometimes that interferes with the status quo. Pity.

One of the biggest misconceptions right now is that people think that it has to be either or when it comes to economic strategies and the way of life that we are brainwashed to accept through the many different ideologies, philosophies, and doctrines that are controlling our World. It seems that everything has advanced and been improved in the last 100 or so years except the fanatic and extremist mindsets that are forced on us by the status quo around the World.

We need to use our technology and the power of AI to come up with a better way to lift everyone out of poverty. The old mindsets of capitalism, communism, socialism, fundamentalism, and the so many other isms that the status quo wants to hang on to are no longer adequate for today's World.

The World needs to abandon its old ways and ascend to a higher level and find common ground over principles and values that are derived through logic and compassion in order for the humanity and our home planet to have a chance to survive and flourish.

IMO

 

[Rob Monster]

The original ad is here

https://imgur.com/wjNlO36

if you are interested

Does that ad not speak to the Domainer Life? Living on the edge, working from anywhere, 24/7, with determination and grit.

Actually the reference to the ad was because of the word "Empowerment". I am likeminded with Aman on his rhetoric and invited a specific action.

If you found that to be in bad form for a town hall format, please coach me next time rather than talking smack behind my back.

 

[ikehook]

@Rob Monster

First off I'd like to thank you for reading DSAD.com to find the comment. It means a lot to me that we have people from all walks of life reading our little blog.

I was there during the Q&A portion of the keynote, not anywhere close to Shane, and the first thing I thought when you posed your "questions", was that you were promoting some of the products that could be found at Epik.

In fact everyone standing around me thought the same thing.

Shane addressing that concept on DSAD.com and calling it a "Dick Move", was the point of your post. I'm not certain I agree with Shane that it was a dick move, but rather an opportunity for a CEO, that has a product or service to sell, doing their job as CEO to push their own brand to the best of their ability. The same can be said with this post.

Whether it's appropriate during the Q&A of another CEO can be left to people far smarter and knowledgeable than myself.

But all that aside, the point of this exercise is that you did indeed promote Epik through your question.

PS: You see what I did there? I mentioned DSAD.com in my comment as a form of self serving promotion, with no regrets. Even made it bold, like I'm some sorta marketing genius

Have a great day.

Josh

 

[Rob Monster]

@Rob Monster

First off I'd like to thank you for reading DSAD.com to find the comment. It means a lot to me that we have people from all walks of life reading our little blog.

I was there during the Q&A portion of the keynote, not anywhere close to Shane, and the first thing I thought when you posed your "questions", was that you were promoting some of the products that could be found at Epik.

If fact everyone standing around me thought the same thing.

Shane addressing that concept on DSAD.com and calling it a "Dick Move", was the point of your post. I'm not certain I agree with Shane that it was a dick move, but rather an opportunity for a CEO, that has a product or service to sell, doing their job as CEO to push their own brand to the best of their ability. The same can be said with this post.

Whether it's appropriate during the Q&A of another CEO can be left to people far smarter and knowledgeable than myself.

But all that aside, the point of this exercise is that you did indeed promote Epik through your question.

PS: You see what I did there? I mentioned DSAD.com in my comment as a form of self serving promotion, with no regrets. Even made it bold, like I'm some sorta marketing genius

Have a great day.

Josh

I mentioned two products: (1) domain lending, and (2) domain protect as an insurance product under development. The reference was in context of the effort to make domains a more liquid and secure financial asset capable of being collateralized by conventional lenders. If you did not see that as contextual, that is unfortunate. The references were extremely brief and were the setup. If you take issue with that, I am not sure what I can do for you but thanks for sticking up for your colleague/boss/buddy. That is usually a good move.

 

[ikehook]

I mentioned two products: (1) domain lending, and (2) domain protect as an insurance product under development. The reference was in context of the effort to make domains a more liquid and secure financial asset capable of being collateralized by conventional lenders. If you did not see that as contextual, that is unfortunate. The references were extremely brief and were the setup. If you take issue with that, I am not sure what I can do for you but thanks for sticking up for your colleague/boss/buddy. That is usually a good move.

lol Dude, come on. I'm not sticking up for anyone not even my "boss". I was simply calling it like I saw it, with no outside influence. You were like "when is Godaddy going to offer these cool things like my company does"

I was being cordial and commending you for your effort to raise brand awareness for Epik at all costs, Because that's what happened, be it intentional or unintentional... but let's me honest, it was intentional.

Admitting your intentions might not be in your best interest, but outright denial seems a little obtuse. You drew further attention to this issue by creating this thread. I'm simply responding with what I observed and thought at the time. I don't need a video to analyse or help to remember.

 

[Internet.Domains]

You have let him take over and divide Namepros.

Nobody is dividing NamePros. That is a misconception. I believe the poll results in this thread show that Namepros is far from divided.

There are always going to be different views, different opinions and misunderstandings. We all see things from a unique perspective, our own view. It's not what we view, it's how we react to what we think we view that shows our character. Point being, if you see something you don't like or don't agree with, there are multiple ways to handle it. Having said that, I I respectfully disagree that anyone here has divided Namepros.

 

[Ategy]

Part 1: Domain Liquidity via Loans

I really wish I had access to both your exact question, as well as the reply.

That being said, while I don't blame you for shaking things up by asking .. but .. I think the answer as to why GoDaddy don't offer loans on domains is fairly obvious!

You have to keep in mind the HUGE difference between you (/Epik) vs GoDaddy. You are the CEO (and presumably majority shareholder) at Epik .. *AND* you are also an active domainer probably with a good pulse on the potential value of domains (although you don't even need to know since you're the one lending the money, in the end your valuation is the only one that actually counts, whether it be accurate or not doesn't actually matter). So when all Epik's loan based decisions go through you: (1) You generally likely have a good pulse on the valuation that would work for Epik; (2) .. and more importantly .. lol .. You don't have anyone to answer to in the case you're wrong.

95%+ of all domains are either not liquid or worthless (liquid below their holding costs).

Then of the remaining 5%, the ones with the most value might have a certain liquid base .. but for the most part the value still isn't very clear. Particularly on the higher end too many sales are under NDA for anyone to really get an accurate gauge as to actual value with enough precision and certainty to actually lend funds against. With the only real exceptions of being domain experts with capital to loan which does not have to answer to shareholders.

On top of that .. imagine how much time/resources it would take a company like GoDaddy to assess all the garbage that's sure to be submitted? lol .. Beyond that .. then they will also risk alienating customers when they reject loan applications.

Plus .. then there's all the people who think GoDaddy does everything in GoDaddy's power to cheat and steal as much as possible away from domainers. This will only go to enhance that kind of talk when GD offers low amounts .. people will say that GoDaddy offers loans in hopes the loans fail so that GD can keep(/steal) the domains.

For a company like GD it really is opening up at least a dozen cans of worms!

That being said .. that's one of your advantages of being a smaller company with only one major decision maker. Epik is more flexible and nimble, and because of your specific circumstances you can offer a loan program.

... Now I'm actually really curious about how it actually works and what sort of volume you get .. as well as what quality domains are accepted and then what amounts are subsequently given for them? lol .. Probably a different topic .. I've got a lot on my plate lately, but expect an application from me eventually, as while I really don't see it as reasonable to think GD might ever offer such a service, I still think it's cool that you do, and it could be something that could really help some domainers. I definitely could have used something like that a year or two ago to get through my mountain load of non-domainer issues over the last few years. Ironically it's domaining that's helping me get back up again.

This is not the first time that Shane has spoken out of school against me with trash-talk and it probably won't be the last since it shamelessly drives up his page views for his affiliate site.

I've never met @Domain Shane .. and haven't interacted with him in a while .. but I have definitely interacted with him in the past and have learnt a lot of his charater via his time on Domain Sherpa .. plus speaking as someone who also has an affiliate site where I also list the day's domains at auction and closeout .. in all fairness I can say with 100% certainty that he did not say what he said for the sake of self-promotion. Just because he said something doesn't make it right or wrong .. but if he said it, it's because he believes it .. and not because it benefits him financially or any other indirect way.

I think at a certain point there's also a portion of the industry who will never get past what happened with Gab. Back then I took the time to talk to you directly. Because of that I know you ended up doing what you did because of a combination of (1) your extreme position on freedom of speech .. combined with (2) your (religious?) values that compel you to try to "help people see the light". You know I didn't agree with your decision to take on Gab .. BUT .. because we talked I was able to see your reasons for doing so, and that you were not doing it specifically to support racists, you were instead doing it for free speech and to try to help the person you were in contact with at Gab to fix what you perceived to be broken there. On top of that I know you've also had a bit of a change of perspective since then and that you're now a bit more like me in that you still have a very strong compelling to defend free speech .. but that there are certain more extreme cases that don't deserve defending (such as racist views with calls-to-action against others, etc).

That said .. unfortunately not everyone will have the opportunity to discuss such things with you like I did. And as such I think there will be many who view anything you do through that filter of the perception you helped Gab because they assume you to be racist (which I'm quite sure not to be true).

In the end though .. depending on what was said at the Q&A .. often things can be said which appear as both justified and "dick-ish" depending on the perspective.

Dick-ish: because the answer is obvious that GoDaddy doesn't have the capacity to offer loans, and it's pretty obvious it's not the type of question he'd be prepared to answer (or even have the authority to answer) in such a setting.

Legit: because you feel GoDaddy should be working towards that capacity and should be challenged.

I'm not sure what I'd ever say to the CEO of GoDaddy if I had the chance. Probably something equally Legit+Dickish like:

Ategy to GoDaddy: "Thanks for having a platform where I can get all kinds of great domains at great prices that help me make money as a domainer ... however .. are you aware that that same platform in question is a disastrous, insecure, frustrating messy pile of garbage?"

Contrary to what people say, GD is not evil. In fact just about every person I've interacted with at GD have proven to be great people who genuinely WANT to help you. However .. the GD platform so big and such an intertwined messy disaster that I'm pretty sure it's more a case that they aren't even aware of what they're not aware of. But I wouldn't be a successful domainer today if it wasn't for them .. lol!

I'm having a hard time thinking of a more love/hate relationship than the one I have with GoDaddy! lol

 

[Ategy]

The lending model is proven.

Although I touched upon it above, I'm not so sure how proven it is. Beyond the lenders taking on the same risks as the domainers they lend to. I'd LOVE to be able to go to the bank with my domains as collateral because I'm one of the few who gets domains at below even wholesale prices. But I just don't see valuations ever being accurate enough for such a thing to be fair to BOTH sides (because the banks or anyone else certainly could do it .. but my fear is that they would offer far less than even wholesale .. again .. very curious as to what you offer for what domains)

, but if you go to a bank and ask to borrow against a 3N.com, they have no idea what you are talking about.

In fairness .. most domainers don't either. Not all 3N's are equal .. nor are 3N's. Beyond that .. are there enough truly liquid domains to even justify setting up the rules and infrastructure and all the education and requirements.

Again .. I'm not saying it to be negative .. because as mentioned .. I'd LOVE to see something like that happen. But I just do see how we get from here to there without somehow solving the miracle that is "industry agreed upon valuations for all domains".

For anyone who has ever studied the history of the housing market, the correlation between the availability of borrowing capacity and the prices of the associated asset is indisputable.

I really don't mind comparing domains to real estate. Some don't like the analogy, but I do. However the one difference being that for the most part the value of real estate is agreed upon by that industry, and by the public at large, with a small enough margin of error/disagreement that a relatively accurate value can be attributed to a house for the sake of lending money against it. Too few (if any) domains would ever be able to get to that point.

If domain owners could more methodically borrow against their domains at conventional banking rates rather than only from hard money pawnshops that dominate the landscape today, it would be a game-changer for making the pie bigger for everyone.

I think domain loans could be good for some people in some circumstances, particularly when there is unexpected need of capital from outside their domaining activities. (aka ME 1-2 years ago when I was dealing with a big loss in a different side-business due to a death; as well as flooding in my condo; and unstable income due to issues with my knees at my "real-world"/non-domain job)

That being said .. I'm not sure how domain loans actually makes the pie bigger. Increasing domainer credit doesn't increase our pie. What increases the domainer pie is increasing awareness on the value of domains to people outside of the industry (potential end-user buyers) .. and increasing the capital of end users so they can pay more for our domains!

I could be wrong (I'm not an expert economist .. lol), but wouldn't giving domainers more capital in turn simply inflate wholesale pricing and end up hurting domainers more than anything else by decreasing margins?

I do understand the perspective from the registrars .. particularly one like GoDaddy where it would mean inflating revenues from expiration auction streams as well as having more overall domains registered.

Though it was not his intent, the modus operandi of Godaddy was exposed, which is to get people to register and renew vast amounts of unsellable crap year after year.

Again .. I really don't think GoDaddy is as deliberately evil as some people think they are. They are a big box company trying to make as much money as possible for their shareholders. The ultimate problem is that indeed well over 90+% of domains registered are garbage. I'm sure if we were to randomly take 1000 domains from any other registrar (including Epik), there would be consensus that all had at least 900/1000 are worthless domains.

Kinda hard to expect GoDaddy to refuse sales to people who are buying something they feel is good. If anything what that rep you mentioned did was great in telling that person what not to register. But ultimately is that the responsibility of the registrar? It's an interesting moral question. I mean supermarkets are allowed to sell overweight people Ice Cream, Chips and Twinkies despite the almost guaranteed long term negative effect on their health.

Unexpected obligations kept me from my road trip to Austin...even bought a cargo van so my dog and I could travel and stop for local flavors along the way (put a couch, microwave and dorm fridge in it so I could travel in style).

OMG .. Steamie thinks you're the best domainer ever (after me .. lol)!

 

[Ategy]

Domain blogers in general tend to post too many affiliate ads of untrusted suppliers (but they pay!)

I can't speak for others, but generally it take a very long time (IF EVER) before blogs make money. As such very few are in it "just for the money", and most are relatively genuine with their intent and goals.

Once upon a time the bulk of Aftenic sales were reported and Godaddy published a monthly summary report of Godaddy Auction results. What happened to the transparency?

GREAT question. I seem to think I read someone say they had to change things for regulatory reasons, but at the very least then release the information with a delay. Particularly for higher end sales. Although maybe the domain market is secretly imploding and they're trying to save us by not letting the word get out? lol

The one thing we need to be weary of though, is the mixing of wholesale sales and retail sales. With such large margins in our industry, having wholesale sales be included in potential calculations for valuation is something that could significantly hurt us!

As the economy becomes progressively more digital, it is inevitable that the raw land of the Internet will become bankable, particularly to the extent that we make it safe for regulated lenders.

I jut want to be clear that while everything I wrote above might seem pessimistic about the possibility of broad loan services from non-industry institutions. Let me again be clear that I wish I was wrong. AND .. be even clear that with this last statement you are correct .. however .. just because it's inevitable, doesn't mean it's necessarily coming soon. The real problem is one of establishing are relatively accurate and agreed upon value.

and possibly domain insurance so that the bank can be insulated from unforseen risk factors when lending against a domain

Insurance is a bit easier in this case since an actual value is less important .. the insured pay a premium based on what they want the domain insured for. All the bank needs to do is make sure the amount isn't too absurdly high that it invites insurance fraud. Insurance would certainly be the first step (kinda surprised it doesn't already exist .. kinda half expecting people to quote this with links to places where it is indeed currently available.

I was not in Namescon - I hope it will be moved to some european city one day, so also domain investors from EU can easily attend and enjoy this event

They do have a NamesCon Europe lined up for the next few years already ...
https://domaininvesting.com/namescon-europe-announced-2020-2022-locations/

this makes me revert back to my thoughts of years past , how does GD keep such high quality domain names in their aftermarket platform, Day after day, year after year.

As someone who goes through their list of expiring domains every night, let me say that the vast majority of the roughly 50k expired domains they have at auction each day are absolute garbage. I generally post a curated sub-list of about 1% of that 50k list every day .. effectively those I consider most "notable" .. but even most of those that are "notable" are not necessarily good enough to be investor quality (although ultimately it depends on the price at the moment it's sold).

That being said .. don't forget that GoDaddy also sells expired domains from other registrars. While on one side they pay other registrars a commission on expired domains that sell through the GoDaddy expired platform .. on the other hand those "best expired domains of other registrar" that actually do get sold at auction, are then transferred to GoDaddy. So the average domain quality at GoDaddy goes up slightly over time as they pilfer the best expired domains from other registrars.

Rob gets it. I am part of the group of domainers that utilized this service successfully before joining Epik. It works and I can confirm Epik did not seize any of my inventory to demand payments. Instead, Rob worked to increase my sales success rate by removing my emotional involvement in the process. I learned to add value by being the user of the service.

Honestly .. I think a big part of the reason a lot of us are having a hard time is that we're rather blind to this process. Do you have examples and numbers that can be shared? How are domains valuated? What % of valuations are loaned out? What's the fine print? Etc etc. .. Based on how Rob and some of you are talking, it likely *IS* simpler and easier than I think it is .. because each time I hear someone want more domain liquidity I always have to ask .. but how do you set a liquid value on something that mostly isn't anything remotely liquid (with the exception of a very tiny % of domains like 2,3,4,5N .com and 2,3L .com). Is there anywhere where we can see examples?

yet I see so many portfolios with "personal" acquisitions that boggle down profit margins into negative integers

lol .. my dog disagrees with you .. he's very much in favour of personal domains (SteamieTheHotDog.com). Plus i don't think there's anything wrong with people holding personal or "do be developed eventually domains" .. as long as people are realistic about being able to eventually develop them. Which .. in fairness to your comment .. most people usually never do (including myself .. lol .. although I have a relatively small number of personal domains)

Do you trust GD valuator? I just bought a domain today for $5. You what value GD is showing
$1,394 I am so RICH ...lol

Exactly. Notice very rarely Govalue under $1K

if GD gave loans on domains based off their domain valuator, I could actually start a hustle simply taking out loans on my names

The true irony is that the numbers most automated valuations give aren't entirely inaccurate. Indeed if someone wanted your $5 closeout, they could indeed pay ~$1,394. HOWEVER .. the very crucial KEY piece of the story that's missing is your likelihood of sale. What's the sell-through rate on that class/quality of domain? Sure it's "worth" $1,394 IF it sell .. but when you couple that with a 0.1% or below likely sell-through rate and a cost of $10/yr, then for every $100 you invest in an equivalent portfolio, you're theoretically losing $86!

 

[Rob Monster]

lol Dude, come on. I'm not sticking up for anyone not even my "boss". I was simply calling it like I saw it, with no outside influence. You were like "when is Godaddy going to offer these cool things like my company does"

I was being cordial and commending you for your effort to raise brand awareness for Epik at all costs, Because that's what happened, be it intentional or unintentional... but let's me honest, it was intentional.

Admitting your intentions might not be in your best interest, but outright denial seems a little obtuse. You drew further attention to this issue by creating this thread. I'm simply responding with what I observed and thought at the time. I don't need a video to analyse or help to remember.

Thanks @ikehook.

First of all, I will apologize in advance for not knowing who you are. I only read DSAD when someone tells me that I should as I am not really a domain buyer in open auctions.

As for my motive, it was sincerely directed at making the pie bigger. I was not even planning to ask a question but after prompting from one of the staff, I stepped up to the mic. No regrets.

If my contextual reference sounded to you like a shameless plug, so be it, but for the folks who might not have confirmation bias, I think the context was relevant.

 

[Rob Monster]

Honestly .. I think a big part of the reason a lot of us are having a hard time is that we're rather blind to this process. Do you have examples and numbers that can be shared? How are domains valuated? What % of valuations are loaned out? What's the fine print? Etc etc. .. Based on how Rob and some of you are talking, it likely *IS* simpler and easier than I think it is .. because each time I hear someone want more domain liquidity I always have to ask .. but how do you set a liquid value on something that mostly isn't anything remotely liquid (with the exception of a very tiny % of domains like 2,3,4,5N .com and 2,3L .com). Is there anywhere where we can see examples?

The math on domain loans is pretty simple. I will explain briefly.

Within a cohort of collateral assets, the law of averages prevails. We'll make some assumptions that within the period for which we are lending, one of two scenarios will occur:

1. The domain portfolio owner will generate sales from the portfolio sufficient to pay off the loan.

2. The domain portfolio owner will default, and then we'll do an orderly sell-off of a fraction of the portfolio.

In both cases, the domains will typically use Epik SSL landers which gives us visibility into inquiries. Where needed, we'll help the domain owner close deals.

We have done cases where rather than take a write-down we proposed to take a few names. From a legal perspective we could have seized the whole portfolio but that does not pass the "do unto others" test.

Our method of domain lending is interest-free and is designed to empower. We could write software to do it, but the reality is that the approach is consultative and relationship-enhancing.

The point of all this is that we don't just lend against premium liquid names. We also lend against portfolios of less liquid stuff where we have probabilistic basis for believing that sales will occur within a term.

 

[Shaan Chopra]

So are you guys fighting on the fact that it was GD keynote and Epik stormed it?

If that is the case, what is the issue in that,,, I think publicity is publicity good and bad. We are talking a lot about GD in Epik in this thread so if any of the two want to place ads in this location i don't see anything wrong. If I was a registrar and see you all fighting on I would have placed my company ads here for sure.

X and Y are fighting join Z,,, I am sure you guys won't mind that. Now, let's take an event like WorldCup, now this event is sponsored by XYZ company. So does that mean ABC company can not place ads or advertise it self in the event and if its a chance of doing it for Free. I dont think I will miss the opurtunity.

 

[Internet.Domains]

I could be wrong (I'm not an expert economist .. lol), but wouldn't giving domainers more capital in turn simply inflate wholesale pricing and end up hurting domainers more than anything else by decreasing margins?

Rising wholesale prices doesn't necessarily mean margins would decrease. Rising wholesale prices would increase liquidity and demand. Liquidity would congruently increase end user pricing. End users pay only once as domains are not a commodity in that respect.

 

[Ategy]

Yes it would increase liquidity and demand on the domainer/wholesale level (costing us more) .. but that doesn't automatically translate into increased end-user sales.

In theory end-users will continue to pay what they pay ... I don't see how the fact domains cost domainers more money equates to increased end user demand/pricing?

 

[Abdullah Abdullah]

edited , thanks @Samer for alerting me to this mistake. Too many windows open , posted in wrong thread lol

 

[Rob Monster]

Yes it would increase liquidity and demand on the domainer/wholesale level .. but that doesn't automatically translate into increased end-user sales.

In theory end-users will continue to pay what they pay ... I don't see how the fact domains cost domainers more money equates to increased end user demand?

@Ategy

Two scenarios to consider:

1. Shoot the moon but with a a safety net

Imagine you are a typical domainer: domain rich but cash poor, i..e you have a tremendous amount of your wealth in domains.

Now imagine you have some bills due and you get a good offer on one of those domains. You now have to decide whether to accept the offer or shoot the moon.

If you have no plan B, then you may be forced to take the weak offer. However, if there is an option for stand-by liquidity, the decision to shoot the moon does not have to be ruinous to the portfolio.


2. Lifeboat

Let's say you have a typical "pig in the python" portfolio where you have a bunch of domains that were registered on one day. Renewal day comes up and you have to make a decision to play lifeboat with your portfolio. The registrars that monetize their expiry stream will happily have you drop names. However, you might have reason to believe that many of those names are worth more than zero. So, you have a couple of options now: (1) you can liquidate the non-renew names and (2) you can borrow against the portfolio. If buyers know the registrant is in distress with a finite renewal window, the prices will be terrible. However, if the registrant can at least cover the renewal fees, they are negotiating from a position of relative strength.


So, yes, retail buyers might not pay any more than before, but wholesale sellers with access to lifeline capital should be a lot less vulnerable to being forced into a firesale. However, if there is an abundance of inventory that is held by weak hands who must sell, it adds downward pressure on pricing of all supply.

Bottom line:

The challenge is to extend the runway on worthy names long enough to get retail sales. As such, if registrars can help domainers to extend their runways with non-Draconian debt, that is a good thing.

 

[Ategy]

The math on domain loans is pretty simple. I will explain briefly.

Two scenarios to consider:

1) lol .. ok .. let's agree to disagree whether this "grows the pie" (which in my opinion would mean/require higher revenues to domainers via non-domainers/end-users).

2+++) I really don't want to discourage this in any way .. because the "pie" thing aside .. I think where we could all agree, is that a loan system could definitely be an amazing life changing opportunity for domainers with needs/emergencies/projects outside of domaining. And .. even within I guess if that "one big domain acquisition opportunity" comes up but you don't have liquidity that week/month.

Because as you know, while things have been getting better for me, about 2-3 years ago I had a perfect storm chain of events that turned my life was a total disaster. Something like this might have really helped me out significantly .. or .. it might not have .. lol. I had no choice but to return back at work after being off for a bit because of my knees (still an issue) .. but something like this could also be useful to help someone transition into a new life path. Again .. it really depends on the actual numbers .. it could be life-changing-amazing .. or totally useless ... ??? lol

I think what's holding people back from saying this is good or bad, is a lack of actual real numbers, terms and examples. I realise there's a privacy issue, but is there anyone who has gone through this process who would be open to sharing some of the domains and how much was loaned on them?

How many domains to people tend to submit? What's the average per domain loan? I know that says very little as so much depends on quality, but at least it would give us a starting point

If not then maybe some made up examples?

 

[tonyk2000]

As such, if registrars can help domainers to extend their runways with non-Draconian debt, that is a good thing

This raises 2 questions - 1) Shouldn't a successful entrepreneur be 100% debt-free, or, at least, have such a plan from the very beginning? It is possible with internet-based businesses, domaining in particular. 2) How good or bad debt is in general? One may or may not be religious, but at least consulting what the religions say makes sense. Two largest main world religions - Christianity and Islam - are of opinion that at least interest, calculated as a percentage of a loan, is a big NO. Non-Draconian debt is still a debt, this is the problem...

As for GoDaddy, they may well try if it would be good for shareholders. They will need to start a new company for this purpose, hire a lot of stuff to filter out garbage from the submissions received (as well as filter out potentially stolen domains), and, most importantly, they will have to shut their famous domain valuation tool down. Which is not going to happen imo.