Dominik Mueller knows his stuff:
I was meeting some friends on Saturday and somehow we got to talk about domain names. It was probably me who started the topic, as always, but anyway” The point is, my friends were not easy to convince that domain names were actually valuable assets and relatively safe investments (if you do the necessary research). When I told them the usual arguments like “Domains have gone up in value faster than any other commodity ever known to man”? (Thanks, Rick!), “Generic domains drive lots of type-in traffic to its owners’ web sites”?, “Direct navigation traffic converts better than search engine traffic”? etc., they said there was certainly truth in these arguments, but still they were not really convinced that domains were an investment as good as I claimed. So, I thought, how could I convince them? What would be the best way to explain to them that domains will continue to appreciate in value for many years to come? The arguments mentioned above are all true, but maybe they were just the wrong arguments for that audience. (I should note that most of my friends went to business school.)
I wrote this a little while ago:
…the knowledge and understanding of the general public about domain names as a legitimate asset class is unsatisfactory at best.
For outsiders looking into the domain business, it sounds too simple to be true. What is forgotten in this world though is business in general is a simple thing to do. It is when you try to complicate things, reinvent the wheel so to speak, that things become complicated. You can never go wrong with fundamentals.
continue reading here..
What I use when talking with webmasters (who generally don’t perceive the value of the domain name), is the returning customer.
Even if with the best SEO in the world, with a domain like r4ths3c.com, one cannot make the customers come back easily. they would have to type the keyword again in the search engine to reach that page. When having a premium domain, the customer memorizes more easily the domain, and will return back when needed.
The human mind remembers only a small amount of information, and a descriptive and short domain is a must.
On another note, I always like to make a comparison with phone numbers when talking with non-domainers. What phone number would you choose for your customer support? 7516839 or something like 777-8888. While this cannot be an argument for people who went to business school, or for big investors one tries to attract in the business, it is an analogy that worked well for me when contacting small business owners offering them a domain.
Regards,
Alex
It seems we still have our work cut out for us in educating the public on domain names. I do see the day however when TRAFFIC or Moniker will have a weekly (reality?) TV show with auctions. I can see analysts discussing the value and importance of each name and predicting the winning bids and names. Just like Football. A 30 min pregame show. With
Sahar, Rick, Frank and Monte being the analysts. I hope that day comes soon. That and maybe a couple of best selling books about making it big in this business. Maybe a movie (do I smell Acadamy Awards?) would really get the message out there. Everyone loves a “rags to riches” success movie. Somebody call Tom Cruize. I really do wish one of you guy’s would at least write that book. And I want to be one of the first guest’s on the TV show
Hi Sahar,
I’ve written up a fairly lengthy post about domain names and economics at:
http://www.domainbits.com/coase-theorem/
It’s not for everyone, but you seem to have a deep intellectual side so I thought it would interest you.
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Good read, thanks for that.
Sahar
That was a good article. I’m wondering how his business school-graduate friends responded to the presentation with the graphs and all. Are they convinced now?