Recession

[ddadc]

I have read the reports by the industry "elite" as most people call them claiming that the domain industry is not in a recession, I HIGHLY disagree.

Sure ultra premium domains are always going to sale high, and premium names will occasionally sell for very high retail market value, but for the most part domains are on the downslide.

I have seen many recent domains of very good to high quality get put up for sale and not bring any offers, or get sold for way to low. Just look at the sales threads on any market forum and you will see that sales are not what they used to be in the good>mid>lower level domain markets.

I for one think we are in a recession and the rich will get richer (buying nice domains cheaply) and the poor will get poorer (not being able to sale good>mid>lower level domains or letting them expire).

So anyone that says we are not in a recession, I say bull honky.

 

[JMJ]

Here's my take and the potential buyer's actual response. "I am interested and will get back to you when the economy begins to turnaround"

 

[Seabass]

Even RPC and CTR are STILL trending downward (even on the best generics out there) after months of free-fall.

It all adds up to a recession in my book.
.

 

[Pommy - The DN Doc]

Well low interest rates but a credit crunch - its diff to tell really.

 

[ecalc]

In general, blue chip earning power and prices peaked last year. 2008-2009 will be good years for generic traffic name bargain hunting.

Bad news will gradually be reported with more frequency in the domain press. The mainstream press will revert to reporting the occasional cybersquatter story in the absence of good news, attracting fewer new domainers to the business. The speculative bubble still exists but can't be supported without new entrants. Every day a new class of names is touted, its selling point being a contrived finite population. The next 2 renewal cycles will be interesting.

 

[Pred]

I say bull honky.

ROFL
Repped purely for that. Never heard that one b4 :sold: :sold: :sold:

 

[Michael]

I've noticed the market softening a bit, but nothing to make me panick.

 

[onewordonly]

I agree, I think people in the USA are spending less on nearly everything including domain names.

 

[Seabass]

ROFL
Repped purely for that. Never heard that one b4 :sold: :sold: :sold:

I think that was said more in the 1970's here in the States.

 

[peaches017]

I agree with the industry leaders (including Rick Schwartz) when I say the "recession" will not hurt the domain industry too badly.

It may, however, hurt reseller markets as the average buyer/seller has less money due to the overall downturn in the economy.

But as DomainRaider said, nothing to make me worry about the industry as a whole.

Peter

 

[DomainTalker]

Just a few personal thoughts on uncertain times (reposted from another thread).


The last real recession was 1991/92...Anyone in the Western economies, under, say, 35 today, has never really been in the working world during recessionary times.....they've probably only ever experienced rising asset prices, and relatively prosperous times, with occasional very minor pauses in the upward trend...

I remember the 'oil shock' price effects of the 1970's...the high inflation years of that period...the several recessions....the stagflation (rising inflation/falling prices)....the credit rationing....the business failures...the unemplyoment....the Oct 1987 sharemarket crash...the near paralysis of Japan's economy for some 11 years, until very recently (in 1987, before the sharemarket crash set off a chain of bad events, the Imperial Palace in Tokyo had been valued at more than the entire state of California!!)....It wasn't an easy 13 years, or so, globally, between, say, 1972/3, and about 1985/6.


We don't know what effects we'll see out of the current situation...


On the credit side, we have the China & India economies booming - and, with it very strong economies that supply them with the raw materials to feed the growth....We have central banks around the world that will work hard to keep financial liquidity in national economies to keep the world moving, as credit tightens....And, we have globally interconnected economies that can - to an extent - compensate each other.


On the debit side, we do know we have rising oil prices, falling property asset values, some upward inflation trends, uncertain financial markets, and tightening credit markets....We see likely recession in the US - and slowing economic activity in Europe....And, we've seen how the US sub prime mortgage crisis began as a local US issue last year - and suddenly exploded around the world through the international banking system within months.


In the past, at the early signs of instability, there was typically an early 'denial' phase....A business as usual mentality, for awhile. Its takes time for the effects to work through - sellers of assets typically ask high (good times) prices for quite awhile as demand, in fact, is falling away.....Then, the penny drops this ain't a 'glitch' - and, when it does, the effect can be fast...and down...Buyers largely disappear, assets become illiquid.


At this point, there was typically an initial flight of capital to perceived 'safety' (in 1988, after the 1987 sharemarket crash, it was to property)...and, to gold....to oil futures...to...to...anything perceived as safe.

If the tough times are short-lasting, then things stabilize fairly quickly....If they don't, then even the 'safe' investments fall in value - quickly....In tough recessions - almost every asset falls in value, in the end.

The best position to be in, in uncertain times, is to be cashed up, if possible.....'Cash is King' is very real, when cash is in short supply. Assets, while good to have, don't pay the food bill, the gas bill, and the mortgage....


So, what's the best way to go in today's situation?


(i) Recognise things are uncertain, in a real sense. Unpredictable.

(ii) Preserve cash in these times, as much as possible....Offload 'weaker' assets.

(iii) Reduce debt, as much as possible....Get leaner.

(iv) Watch for the signals that matter....Eg Availability of credit, rising/falling unemployment, corporate profit announcements (up or down, as trends) & any announcements of major downsizing, or bankruptcies etc...

Try to note what's happening in the small business sector - an excellent barometer of what's really happening at the sharp end.

(v) Note the level of real competitiveness for assets, or not (all assets, homes, shares, and, yes, domains) (which shows whether demand is rising, or falling)

(vi) Avoid being too influenced buy the occasional 'Big Win' announcement....Rather, see if it is one of a series of Big Wins, or just a one-off, for maybe special reasons...

(vii) Do your research well, if contemplating any investment....Know why you are investing - allowing for possibly very slow times ahead....Gut feel is always good - but, make sure its not based on 'wishful' thinking, in the face of reality.

(viii) Be prepared (and be able) to hold assets for a longer time, for a profit, if necessary.

(ix) Assets that were good in good times, may not be good in tough times...ie smarter investments may be in variations of what was good times good.

(x) Bargains are likely to be had. But be sure that bargain is true quality. Marginal quality is likely to cost you.

(xi) Be bold - if you're game to back your judgement. Boldness today, can be riches tomorrow - if you get it right.


And...


(xii) Always remember (if things do get bad) - everything goes in cycles. In good times, it always feels as if good times never end....They do....In bad times, its the same - we feel they'll never end.....They do.


Just a few thoughts.

.

 

[scoops22]

Very nice post there DomainTalker-Repped you for it.

....PS...The Bull Honky Comment Had Me LOL'ing Too -Nice1

 

[ddadc]

I agree with the industry leaders (including Rick Schwartz) when I say the "recession" will not hurt the domain industry too badly.

It may, however, hurt reseller markets as the average buyer/seller has less money due to the overall downturn in the economy.

But as DomainRaider said, nothing to make me worry about the industry as a whole.

Peter

The industry leaders, and anyone in a major asset holding position are never going to admit we are in a recession, if they did the value of their assets would fall. The entrie industry will hurt, with less wholesalers you have less endusers due to the fact they can pick up equally as good mid level domains for a much cheaper price. The "industry leaders" if you want to call them that, will never admit it, don't matter if its staring them in the face.

 

[cache]

I am holding a lot of LLLLs, so I have not seen domain recession yet.

 

[Michael]

The industry leaders, and anyone in a major asset holding position are never going to admit we are in a recession, if they did the value of their assets would fall. The entrie industry will hurt, with less wholesalers you have less endusers due to the fact they can pick up equally as good mid level domains for a much cheaper price. The "industry leaders" if you want to call them that, will never admit it, don't matter if its staring them in the face.

You've got to admit, however, that just as there would be a motive for the players to say everything is fine, there is just as big (if not bigger) of a motive for the average domainer to stir up a recession panic. I wouldn't use that as an argument for or against the theory that the domain industry is, to a certain extent, recession-proof.

 

[ddadc]

You've got to admit, however, that just as there would be a motive for the players to say everything is fine, there is just as big (if not bigger) of a motive for the average domainer to stir up a recession panic. I wouldn't use that as an argument for or against the theory that the domain industry is, to a certain extent, recession-proof.

Why would I want to stir up a panic recession? You don't know what kind of portfolio I hold. I have recently spend XX,XXX on domains, so recession is not going to help me, but I can see the obvious. We are in a recession. I will use my opportunity wisely and purchase domains underpriced for a while.

 

[Krossat]

It would be interesting to see what you perceive as a very good bargain of mid-low domains now days (leaving out low-mid LLLL coms, which i believe is undergoing a correction atm). All i see is Namejet and Snap names getting higher and higher bids.

 

[ddadc]

Personally I don't use NameJet or SnapNames, I believe they are both organizations that just hurt the Internet and hinder proper development, I hate them almost as much as I hate parking. All one has to do is simple open their eyes, and you will see that domains at any mid and lower level are selling very cheap, I have seen domains that in recent years would have gone instantly for X,XXX barely getting low XXX bids, I will not sit here and quote domains as that would just serve to embarass the sellers and draw attention to the buyers who got good deals.

 

[interestedenough]

You've got to admit, however, that just as there would be a motive for the players to say everything is fine, there is just as big (if not bigger) of a motive for the average domainer to stir up a recession panic. I wouldn't use that as an argument for or against the theory that the domain industry is, to a certain extent, recession-proof.

Besides just the expectancy of recession (or recession) in the US, there are a few changes going on that will probably change the domain industry:
1. The ICANN decision on restricting domain tasting.
2. The political eyes on domain name industry, including bills in congress.

I expect that as domain tasting is restricted, there will be a much larger amount of domains available at any time, also, the "buy it immediatly or lose it" domain name panic will calm down a little bit. These changes might negatively affect domain name price sales in the short run, but in the long term, I believe it will help.

Also, as less domains are held in a "temporary" way (domain kiting), then more ads (and CPC money) should be available for domains held by long term domain investors.

 

[Michael]

Why would I want to stir up a panic recession? You don't know what kind of portfolio I hold. I have recently spend XX,XXX on domains, so recession is not going to help me, but I can see the obvious. We are in a recession. I will use my opportunity wisely and purchase domains underpriced for a while.

I never said you are trying to start a panic.