Stock market and domain industry

[cache]

The most recent stock market melt down is a good study case to see whether
it will affect the domain market. So far the decline of the market
does not seem to heat or cool down the domain industry. So are those two
thing related or un-related? What do you think?

 

[Smiler]

I think that if a product is hot and hyped up like iPhone, stock shares would go up in value and more visitors will flock to domains relating to iPhone services, merchandise, etc. This will increase the registration of damains related to hyped up products. But in terms of selling a domains when the stock market is bad it might affect the selling prices of certain domains but not affect other names IMO. Anyone can correct me on this.

 

[PowerUp]

It depends on whose point of view you are looking at from.

1. If you are talking about selling to resellers, these resellers shouldn't care much about the stock market downturn. Why? Because they are holding domains for the long term.

In the real estate market where people have to get credit and service their mortgage and so when there's a market downturn, their income is affected, and so their ability to finance the mortage is also affected. This forces some people to sell their real estate at a price lower than market value. And as more and more people do this, there's a general decline in the value of real estate.

However, in domaining, the maintenance is only $7 a year for a dot com. I believe serious domainers would have no problem renewing the domains for some years until the economy picks up again instead of selling their domains below market value like in the case of real estate.

2. If you are talking from the end user point of view, then generally when stock market crashes, businesses will suffer. And when this happens, businesses will be more careful in spending their money (ie buying domain for development). Perhaps the average transaction value will drop a little.

This stock market crash could also spur demand for domains. Here are some reasons.
a) Companies could be forced to find innovative ways to market their product / services. Some might choose to setup websites.
b) If the economy goes into depression, then some people will get retrenched. These people may choose to become internet entrepreneur. Why? Because setting up an online business requires minimum investment with unlimited upside potential.

Just my theory. It's not backed with any statistical data.

 

[moped]

Domains are still primarily a speculative market, the current stock market wobbles are largely driven by a fear that the sub prime mortgage melt down will soak up too much cash. Speculative markets like Domains are driven by excess cash, therefore these markets will be affected should any actual serious liquidity shortage result.

 

[accent]

This is not (yet, anyway) anything like a stock market meltdown. A meltdown would be something like -30%.

Perceived wealth is a factor in people's decisions. When the market falls they think they have less money, even though their number of shares and dividends remain the same. This effects their purchases of big ticket items and could effect the money they spend on domains.

Or it could help domains if they are seen as attractive alternative investments. I am not convinced we are there yet.

But I suspect that this is not going to be a deep fall, this time.

 

[DnPresident]

2. If you are talking from the end user point of view, then generally when stock market crashes, businesses will suffer. And when this happens, businesses will be more careful in spending their money (ie buying domain for development). Perhaps the average transaction value will drop a little.

I think your on track. If the stock market crashes it does effect almost all sales. People get scared to buy, spend, sell in many areas of business. This would effect domain sales.

 

[yandig]

Or it could help domains if they are seen as attractive alternative investments. I am not convinced we are there yet.

I think that we will see more people turn to alternative investments in the coming years. The stock market has been a fairly steady source of income for millions of people for years. Times change, however, and in times like this, where the market is down, people realize that much of a security's value is relative. The real estate market is largely suffering right now as well.

Domains provide an alternate place for people to put their money. With the relative ease of getting started in this industry, I see more and more people getting involved.

 

[cache]

I agree with you, more and more people are "investing" in domain.
You hear a lot of people lost money in stock market, but you don't
hear many people complaining losing money in domains.

I think that we will see more people turn to alternative investments in the coming years. The stock market has been a fairly steady source of income for millions of people for years. Times change, however, and in times like this, where the market is down, people realize that much of a security's value is relative. The real estate market is largely suffering right now as well.

Domains provide an alternate place for people to put their money. With the relative ease of getting started in this industry, I see more and more people getting involved.

 

[goodkarmaco]

Depends on what names you have.

My marketgoldprices.com may be perceived as higher value if the stock market goes down. One or two reasons why. Developers may see the potential to ride the wave of panic by building a web site on my name. The other reason, type in traffic may increase due to online search for metals investments.

 

[MindGenies]

I agree with you, more and more people are "investing" in domain.
You hear a lot of people lost money in stock market, but you don't
hear many people complaining losing money in domains.

Yes I agree, we dont see many people losing money in domains....
I just read somewhere that even domain tasters keep one out of 250 domains...which is a good figure and people are tasting in millions

In domain registration figures of most registrars - 98% are the money earning parked domains and some 2% are genuine ones

I agree with you, more and more people are "investing" in domain.
You hear a lot of people lost money in stock market, but you don't
hear many people complaining losing money in domains.

Yes I agree, we dont see many people losing money in domains....
I just read somewhere that even domain tasters keep one out of 250 domains...which is a good figure and people are tasting in millions

In domain registration figures of most registrars - 98% are the money earning parked domains and some 2% are genuine ones

 

[deb]

domains provide a better return % wise