Will the accepted industry drop in PPC cause a domain sales slowdown?

[netfleet]

It is pretty much accepted that PPC and other income from parking is down over the last year or so across all parking providers (please indicate if you believe this is not the case)

Does this mean that domain owners, both large (read thread on Fabulous) & small may look to offload many of their properties due to the gap between income and renewals/holding costs becoming larger? Just as in physical Real Estate, a slowdown in rental yields can cause investors to flood the market with properties for sale.

Additionally, will this softening in domain revenue this mean that domains sold on the basis of revenue multiples will be sold for less than previously.

Do you think that these two factors will contibute to a slowing of growth on domain values or even a decline in prices obtained?

 

[Spade]

Domains cannot be compared to real estate in this sense. Supply and Demand can affect the domain market, but only for niche classes of domain names and that is only for reseller prices. Lets say that your companies name is Internet Fake Business. You have a few possible options (In terms of .com)

InternetFakeBusiness.com
IFB.com

ect....

Now what happens when both are taken? Do you change the name of your company so that you can try to get an available domain name? Its hard and silly to develop a business around a poor quality domain name for quite a few reasons, but when looking for houses, they can be similar and even interchanged.

If I wanted to go buy a home right now in Phoenix, AZ (where I am now) All I have to do is drive down the street and there are 100 adequate homes for my needs, just gotta pick the one I like the best... Domains dont have the same luxury, regardless of supply and demand.

Justin

 

[netfleet]

Thanks Justin,

That makes sense.

However what about generic domain names. Eg an online florist looking for a domain name. Previously he/she might have hopped on Sedo & seen

iflorist.com
flowersonline.com
flowersrus.com
flora.com

Now if more domains were available to sell, they might see

iflorist.com
flowersonline.com
flowersrus.com
flora.com
efloral.com
webflowers.com
bloominbrilliant.com
flowerpower.com

If all those sellers really want to sell (and they do because PPC aint doing it for them anymore), they might be forced to drop their prices to compete.

What about domainers - they do have the flexibility to pick & choose over 100's of different topics so for sellers targetting domainers, surely they would have to drop prices to compete (in a 'flooded' market)

 

[Spade]

I understand your point, but that list of domain names, simply aren't the same or even closely comparable.

Flora.com compared to BloominBrilliant are two very very very different domains and pricing in our market isn't determined primarily by supply and demand because an owner can choose to sell a domain at any price hes willing, the only important factor is will the buyer purchase at that price...

 

[webquest]

It is pretty much accepted that PPC and other income from parking is down over the last year or so across all parking providers (please indicate if you believe this is not the case)

I can't speak on how Google is doing but as far as PPC with Yahoo everything is fine.

I have not seen any less revenue with Yahoo anytime yet.

I think the problems are with those who use the middleman companies.

PPC is booming.

 

[netfleet]

PPC is booming.

Is it? I'm not so sure with Yahoo but it doesn't feel like it with Google (and parking co's that use Google feeds)

I understand your point, but that list of domain names, simply aren't the same or even closely comparable.

Flora.com compared to BloominBrilliant are two very very very different domains and pricing in our market isn't determined primarily by supply and demand because an owner can choose to sell a domain at any price hes willing, the only important factor is will the buyer purchase at that price...

Yes you are right again in that the domains are very different. However supply & demand does and will have an impact esp if the effective cost of holding the domains goes up (which it will if PPC goes down). That will motivate people to sell. More motivation = lower asking prices. Lower asking prices = lower sales prices. Lower sales prices (combined with less potential for PPC income) could drag the whole market down. Would Fund.com have sold for $10m if sales of comparable domains were all in 6 figures for example?

 

[domainman101]

Insurance, banks, credit card companies, have left bricks and mortar advertising methods, there is no doubt online advertising is king. As the delivery of advertising systems gets tweaked, and is easier to follow conversions etc... you will see prices continue to go up for PPC. So if we have people fleeing ppc, less advertising mediums, won't credit card marketers lose business etc... I think there just needs a better way to get rid of click fraud etc... will make advertisers more willing to spend.

 

[mmbullseye]

Flora.com compared to BloominBrilliant are two very very very different domains and pricing in our market isn't determined primarily by supply and demand because an owner can choose to sell a domain at any price hes willing, the only important factor is will the buyer purchase at that price...

Everything is priced based on supply and demand. If I have a house to sell I can choose to sell at any price I want also. It might never sell but the same is true for people trying to sell mediocre domains for 50k.

 

[Seabass]

I can't speak on how Google is doing but as far as PPC with Yahoo everything is fine.

I have not seen any less revenue with Yahoo anytime yet.

I think the problems are with those who use the middleman companies.

PPC is booming.

Boy...... I sure don't see this at Yahoo. I'm down. Others I know are down. We are not Arbers, don't own expired traffic domains, but pure-play, high quality generics. Some generics I know about with 2,000 + natural, type-in uniques are seeing drops of 50% or more in RPC. These are mid 90's domainers with some of the best domains a person can own.
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