... It is a different kind of investment than PPC, more speculative but also, perhaps, more rewarding.
Good points, positive thinking drives progress. Risk management stems losses. The bulk of the llll market could be cornered for Wall St peanuts, but it's unlikely. You nailed a major reason - low direct traffic that doesn't begin to pay for rising reg fees. High carrying cost is aggravated by slow inventory turn rates at retail 'end user' ask prices. Low single digit % annual turnover is common for big portfolios. More pitching and price drops can speed the turn but there goes the knock knock 'end user' price dream. This is a market that nobody wants to corner.
Real businesses consume LLLL names. Impressive sales happen. LLLLsales.com top 10 sales reported since 1/1/2009:
toys - developed
body - parked
wife - parked
kiev - parked
ipal - developed
saws - parked
bedo - under construction
cric - does not resolve
sikh - under construction
sued - minisite
Dev status shows the high end still in the clenches of domainers (or money launderers), not 'regular' businesses. Similar snapshots at lower price points may paint a different broad profile. 2009 top llll sales took a haircut from 2008 and if ppc erosion continues it'll take more wind from the sails of high end domainers, reducing top sales prices, muffling PR and giving other price points indigestion. This is how ppc can affect areas not regarded as ppc sensitive.
Another angle. Pick up a PennySaver or similar local ad rag. Look at the display ads. What kind of domain names, if any, are small businesses using? Here's what I see in my large city neighborhood 24-pager:
2keywords.com
3abbreviatedwords.org
2wordbrand.com
2keywords.com
no website
2keywords.org
surnamekeyword.com
surnametire.com
2keywords.net
no website
4words.com
brandinsurance.com
surnamecarpetcare.com
3keywords.com
collegename.com (no edu?!)
4words.org
4words.net
no website
2wordsplusthenumber4.org
I don't see any llll.coms. Is that good or bad? Plenty of untapped sales potential. Clearly a lot of businesses budget $X for their web name. Many could shorten their address with a llll acronym but I see no one on board in this tiny sample even without a hypothetical $$$$ entry point, but adoption rates driving the low single digit % turnover mentioned above are probably hard to notice.
The clearest picture of the llll market is probably the rear view mirror provided by the
chart at llllsales.com - kudos to the publisher for a great tool. Tepid price movement since March 2009 suggests weak or long lag correlation with equities. I sense more influence of the broad economy and the strong arm of ppc gatekeeper GOOG (operations, not stock price) on this 'non-ppc' niche. Good luck to all here, not knockin' it, just kicking the tires.