A good thread on DomainState talking about 08 trends in the domain industry. some worth mentioning:
Snoopy writes”: 3 letter .com to hit 10k minimum value by the end of 2008.
-Agree
DomainEngineer writes: Middleman development companies will emerge to help domainers transition from pure ppc to either ppc/minisite hybrid model or full development model. Hopefully this will make Bid happy
- 100% in agreement. Recall Media Group, Internet Real Estate, Washington VC, Reinvent, Startup Capital, BPHG Media, are already in the space. It is just the beginning.
jmcc writes: People begin to develop .mobi sites instead of just parking them.
- Disagree. Domainers are mainly property owners, not developers. Owning does not make one a developer.
Shaun writes: Verisgn will raise fees 7% .. every year from now on.
- Agree. They could be a little more original (and make more), but why use their heads?
Bidawinner writes: Cowboys.com investors become irritable and in fighting emerges as they begin to realize they own 1/19th of … of a parked page that will lose more than half it’s traffic in less than a year and fast falling revenues as rankings and revenues start to take a dive after the initial increase in CTR and Revs after the initial transition. (parked from developed)
- As a participant in this venture I disagree. First, there are only 16 investors now. Second, there’s strong demand for shares in and out of the group regardless of usage, revenues. Many just want to be part of the group, participate, learn together. It is the cheapest “domain university” in town.
Few more predictions from me:
1. Top prices will drop: As the top of the domain market is driven by a handful of buyers (Frank Schilling, Kevin Ham and Co., Anything.com), I see those coming to the conclusion they either have enough to develop or have better returns elsewhere, therefore stop paying top dollars.
2. In terms of listing domains in live auctions, due to new auction offerings (Domain Roundtable/DomainTools, DomainFest/SnapNames, others) and competitive listing rates , the orange ball will move from current leader (moniker.com) and other competitors to the hands of domain owners.
3. More new designs in PPC land such as what we’ve seen at Domainer.com lately, blurring the lines between PPC and developed sites for end users, making CTR and conversions better.
4. Top portfolio owners to collaborate more with marketers outside the domain space (such as Scott Day/Seth Godin The “ever” project), SEO folks.
5. Top portfolio owners to diversify away from domains, investing in other technologies (Search technoligies, others), services ( arbitrage, others).
6. IDN to gain more momentum. There’s a huge need for people to communicate in their own language and while I will most likely stay out of it, I think those who invest in IDN, the smart investors, will do well over the next few years.
7. Domainers to take notice of commodity trading. I’m somewhat going to be responsible for it as I’m working on a multi million dollar trade deal as I write this. There are more commodities that domainers and other investors may be interested in than domains and money. What else can you trade your domains for? Gold, Gemstones, gold coins, stocks, diamonds, real estate, cars, art? It will take a couple of substantial deals for others to realize the enormous potential here, and it is enormous.
What are your predictions? Where are the big gains, big losses, big surprises?
Awesome post. 2008 will be an interesting year for domainers. More demands are being made, and people are coming up with their own programs out of frustration hoping to make things better (Bodis.com).
Hi Sahar,
Thanks for adding your insights about 2008. I’m wondering what effects you think that the problems in the subprime mortgage lending market and housing market will have on the domain industry.
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I don’t follow daily news (hack, make it “yearly news”) to tell you that but from what I feel, economy is getting weaker, many will run for the exits in all industries. The one who holds the
dollarEuro in hands will have great opportunities to pick up amazing deals.Its not 3 Letter but 1 Letter domains that are going to be making headlines this year. But everything up to 3 Letters are going to be heading North this year.
This year is the year for which dot Mobi will be seen for what it is, but lets not turn this into another dot Mobi thread.
Verisign is not even keeping up with dollar depreciation. These guys are in a global market and so are you.
I am sure Cowboy.com is a fun club to be in. There is bound to be some mutual learning going on. Whether or not that will reflect on ROI of the individual domain is difficult to say.
1. Wrong, but there will be a fall away at 2nd Tier and possibly a collapse at the bottom end which is really being driven by the aspiration to be FS.
2. Right
3. Yes, and hopefully more development away from purely English.
4. If combining top SEO with top Domains actually produces results, this will revolutionise not just domaining but the Internet. I have yet to be convinced, but we should all be hopeful.
5. Revenues in top portfolios are still rising but opportunities are getting scarcer. Diversification is a no-brainer.
6. Yes, this is the year when many big players finally get it. Congratulations at being in the Van Guard, but I am baffled at why you don’t see this as a commercial opportunity. Perhaps, you feel that the barriers to entry are too high, or the potential rewards not adequate. If so, I am sure you are wrong on both counts and would be happy to help you understand why.
Excellent post Sahar, but I’d have to disagree with your first prediction.
If the highest prices of domains were dictated by the current top portfolio owners, I would agree. However, they’re not. One may argue that they are the most consistent buyers in the moderate-upper price range, but they are not responsible for the majority of highest tier domain purchases.
Corporate America and Madison Avenue are still behind the curve and only now starting to take notice of the synergistic marketing power of mega-generic domains (Mastercard’s use of Priceless.com for example). When they do, we will see domain sales prices higher than we ever dreamed.
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I don’t doubt we will see prices higher than ever in some instances however, from liquidity standpoint, corporate America are not your buyers, top portfolio owners are. If those drop from the cycle, who will liquidate your domains when you need to sell? Try calling a fortune 500 telling them you just put a domain for sale and it’s a perfect fit from them even though they have no specific need for it.. not gonna happen, not anytime soon, if ever. Try to do the same with top portfolio owner and by end of day tomorrow, if you are pricing the domain right, you have money in your account before the bank opens.
My Dear Sir Sahar hi greeting ThANKing ,
could ye please tell us
why you not interrested in IDN ??
??
your even not interrested in
IDN of Hebrew-which-is-your-ancestor’s-tongue ??
??
cheers ThANKye 2w
Fascinating post.
I disagree with #7 though. Why would there be a move towards barter in the domain space?
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I know of many instances where that already has happened, the difference is it was not yet publicized to a level that domainers are familiar and open for the concept. That will change in next few months.
Sahar
I really like your statement:
Domainers are mainly property owners, not developers. Owning does not make one a developer.
Good predictions here all around. It’s always fun doing this and later reflecting back to see who was right =).
-I agree with domain liquidations for generics topping out for 2008 at domainer auctions. Been saying this for a while. Same people are driving up the prices consistently at every domainer auction. Where’s the end user at at these auctions? Once their bellies are full, evolution continues for the next big thing in domaining. Development…then sell offs as full businesses..etc..
-2008 will see an explosive growth in the Geo/local domains niche. We will see these domains rise in value faster than ever before and sell to END USERS. Additionally, we will see these once undervalued and much ignored domains turn into revenue generating machines as old school media moves online. While generics are nice to control a whole segment of a market, they do not meet the needs of consumers who demand essential information without having to go through several of levels to get to what they need. All consumers want is the easiest way to get their information
As an example, Homes.com is a great name to control a market, but poor for the person(s) looking for a home in Austin, Tx. The easiest way to get what they want without having to search through all the levels and annoying advertisements will be AustinHomes.com. Consumers want and need local content.
-Consumer navigation will evolve in 2008 as new technolgy makes it easier to meet their needs. Bottomline, Consumers are lazy, software will follow to make them lazier. Type-in traffic will start to level out as many have seen this year with many of their top domains(There are exceptions of course). Consumers are fed up with PPC pages and I forsee software being developed that tells them if a site is developed or just another parked paged with multiple ads before going to it. Consumers want content, and they will find alternative ways to get to it other than navigating to a page they have been to already with PPC.
-Yahoo and Google will develop new technologies to keep more advertising dollars in house than being shared with domainers thru PPC. Something potentially hazardous to domainers making a living off of PPC, Is if they create subdomains with homes.yahoo.com, austinhomes.yahoo.com, etc with revelant content directing and branding consumers to search their way. THis will hit a domainers wallet hard as some may see upto a 50% decrease in revenue. These 2 entities simply own most of the internet.
-I forsee registrars starting to venture into domain insurance to prevent names from being deleted and stolen for a premium. Credit cards expire and addresses change preventing charges from occuring. Additionally, I forsee some type of insurance being developed for law suits and legal fees to protect qualified domainers.
-In 2008 the evolution of affordable domain conferences will emerge. 90% of domainers are domaining part time and supplementing thier current income. The current conference schedules are simply to expensive for the 90% to attend preventing the industry from reaching its maximum potential. Focus has only been applied at the top end of the 10% full domainer niche. This is why there has been a very small growth rate in conference attendance each year. Domain business entitys do not have to conduct conferences at the most expensive locations in the United States to grow the industry. That 90% has alot to bring to the table, and it will show as the conferences emerge.
Godspeed,
Steve Morales
Great Post Sahar.
None of us have a crystal ball that is perfectly clear but yours seems to be pretty bright and clean these days. I predict you will continue to be one of the brightest stars in the Domain Space for 2008 and maybe even break out ahead of the crowd once again as you did in 2007 with all your creative and inovative new ideas.
Best of luck in 2008.
Chris
Hi Sahar,
Great commentary and just wanted to add a few other predictions:
1. I think we will see an uptick in valuations of two word generic names like babypictures.com. The overall market should at least slow down from the huge increases it has seen in the last 18 months. I still expect to see growth, just not at the same level we have seen.
2. I think late 2008, more domain owners will be looking at developing there domain names into fully functioning businesses that require a lot more involvement. I think a good example is funeralhomes.com
3. As a proud participant in the cheapest domain university (cowboys.com), I think the cowboys.com purchase will lay the foundation for more fractional shares ownership groups. As prices of high quality names get out of reach for the average investor, this will become more fundamental and widespread. I would love to work with a team of developers that could get domainunits.com off the ground quicker.
4. Typos will become even more risky and prices will continue to decline.
5. IDN’s will gain continued momentum in select markets and bring down the long term value of .com names pertinant in those specific geo regions.
6. SPECULATION in LLL.com will start to slow as investors start allocating their domain money to domain investments not driven by continued speculation.
7. We will see increased lawsuits from companies trying to steal names (WIPO) because they were asleep at the wheel the past 10 years.
8. Most importantly, I hope everyone will make more money, stay healthy, and have fun doing it.
Happy Holidays!
Speaking of Domain State, Take a look at how they handle the thought of what I propose in this Domain State thread.
http://www.domainstate.com/showthread.php3?s=&threadid=85194
I’ll let the readers here respond to what they think.
2008 will be the year every domain seller and seller platform/auction venue will call all of their domains “premium”…oops! Sorry, looks like that’s already happened.
Interesting predictions Sahar,
When I posted on the domainstate thread I mentioned that people, rather than just domainers, would begin to develop .mobi sites rather than just parking them. As a TLD, .mobi has yet to reach its landrush anniversary and a lot of speculative domains will be dumped then. The development will become somewhat clearer but as a TLD, I think .mobi is going to be a niche extension for a while yet.
Your third prediction is definitely one to think about. Many of the search engines seem to just drop PPC and parked domains or at least put them way down in the results. This pattern of blurring the lines between a PPC landing page and an actively developed website should change things for CTR but will it also force the search engines to reconsider how they treat PPC and parking?