the King weather challenges to its throne?
Tariq Ghafoor Archived 11-19-03
In the past decade we have witnessed an unprecedented euphoric
optimism about anything internet-related, resulting in one of the
wildest speculative frenzies mankind has ever seen. This speculation
was concentrated on “.com” ventures, including the sale of
Unfortunately, most got burnt badly, including
the vast majority of the .com domain speculators. However, its quite
interesting to see that there are still quite a few out there who
continue to hope for rich gains in the .com market. The hard cold
fact is that the domain market, just like internet business in
general, has changed dramatically over the last couple of years.
The days when any “exciting idea” would get
quickly funded are long gone. Now scarce venture capital funds flow
very cautiously and only towards those ventures that are based on
practical realities and not “exciting” ideas and dreams.
Despite that fact, many domainers still have a
mindset much like lottery players with dreams of winning the jackpot
(making that one/few “BIG” sale(s) out of their portfolio of
dozens/hundreds or even thousands of domains).
Even in the heydays of 1999/2000, I don’t recall there
being too many examples of “decent” but mediocre domains selling
for hefty profits. Yes Business.com sold for $7.5 million and
Loans.com fetched $3 million, but how about millions of the domain
investments, at $10 to $35 each, that went on to the road to expiry
without ever realizing their dream of resale?
So, what have we learned from all that has gone
on in the “.com”-related ventures in general and the domain
market in particular? I am afraid that many of us domainers are far
behind on the learning curve as compared to general “.com”
ventures. Whereas there are clear signs that the latter have
drastically altered their approach towards doing business on the
web, unfortunately there has not been a whole lot of change in
domain buyers’ attitudes, behaviors and strategies. They continue
to chase and gleefully display their caught “drops” which for
the most part are so mediocre they make one actually feel sad.
Domainers also continue with these tendencies in registering
names whether it be in the old or the new TLDs.
So, what, if any practical changes are needed
to help make domain speculation more methodical with
real profits for those who continue to find it exciting
enough to carry on in it? My
own experience and observations would suggest that probably the most
crucial factor is to develop ones ability for critical and objective
analysis of not just current trends but also likely future
scenarios. The most practical example being to objectively assess
the realistic potential for new TLD’s in the context of existing
DNS status and likely relevant future events, such as the
probability and timing of the release of additional TLD’s.
It seems quite clear that some additional
TLD’s (sponsored Top Level Domains) will be released over the next
12-18 months, but indirectly it also means that the future release
of any new gTLDs is at least 3-4
years away if not in doubt altogether. This, in my opinion, does
lend a crucial time advantage for new TLD’s to establish
themselves and gain acceptance with the public and businesses.
What are some of the likely factors in favor of
this happening and vice versa? There’s no point even arguing that
.com has entrenched itself deep in the minds of web users and has
made itself synonymous with the internet itself. So, the
million-dollar question is: Is it going to stay this way?
The answer can be found throughout history. Has
any status quo lasted for ever? So if change is inevitable, what are
the most likely possibilities given what we know today? Some of the
key facts are as follows:
keyword of any appreciable value to businesses, individuals or
other entities has been left un-registered in any major TLD
(some ccTlds excluded).
large numbers of recent expirations, there’s an overwhelming
degree of over-registration in older TLD’s, especially .com.
Even most conceivable misspellings of every keyword/good
word-combo are registered along with loads of defensive
registrations like CompanyNameSucks.com, etc.
majority of small & medium sized businesses and other
entities already online have less than desirable domain names
– names that are long, convoluted, hyphenated, or mixed with
number of new businesses and entities wanting to get online is
expanding literally by the hour and this phenomenon has
continued despite the unprecedented downturn in other technology
and internet areas.
So, even a cursory examination of the above
facts would seem to portray quite a promising picture for domain
holders. With most of the good domains in every TLD in their hands,
additional gTLD’s relatively far away, and an unprecedented growth
in new entries to the Web, what more can one ask for in view of the
well-established economic principle
of “supply and demand”?
Although the scenario is indeed promising, in
my opinion, it does have a big “BUT” in it. And, that “BUT”
has to do with the uniqueness and rarity and hence value of the
domain name you have to offer. Figuring this out is not that
complicated either as it has less to do with feelings and subjective
appreciation of the domain and much more with cold, hard, objective
For instance, there’s one only & only one
word called “cars”. Unarguably, as a domain the most valuable is
Cars.com, but after that comes what may be the real art/science of
domain speculation. Will Cars.net be more valuable than Cars.info or
Cars.biz? Will UsedCars.com be more valuable than Cars.info or
Cars.biz? How about Florida.info vs. MyFlorida.com?
I’d argue that after single keywords, pure functional
word-combos that are already part of established vocabulary will
command more value than any “add-ons”; example would be “Used
Cars” vs. “My Florida” with “My” in the latter being a
I’d venture further in predicting that in due
time this valuation model will hold true for comparative values of
.coms versus new TLD’s. For example, I’d argue that
UsedCars.info/.biz will command more value than BestCars.com. In
short, I feel that there’s still reason for optimism in the domain
aftermarket but in order to profit there’s a crucial need to alter
one’s perception and strategy just like our brethren have been
forced to do in other web-based businesses.
Some final personal (non-professional) pointers
(as of this writing with 2002 drawing to a close):
highly selective in picking up “dropped” (.com) names since
in reality getting a real good name in these drops is almost
like winning a lottery.
from, or be very selective based upon your personal
research/knowledge of a specific area, when registering names in
new TLD’s. Even here all the names with better than 50% chance
of selling at/above low four figures are long gone. The .US may
be exception in this regard (but only temporarily as names
continue to be taken by the hundreds daily).
away from “vanity” names unless you’ve a specific/personal
reason for picking one. In the long run, pure, functional
word-combos (Used Cars; Vacation Rentals; Alternative Medicine,
etc) in new TLD’s are likely to do better than vanity names
(Go Shop; Top Buys; Hot Deals, etc) in .com.
putting some work in the domains even it’s a holding page with
some general info about the subject matter related to domain,
some relevant links and contact info. This is much more likely
to be done if you yourself are convinced of the value of your
domain. If you realize deep down that the domain is not worth
putting any effort in, how would others find it worthy enough to
doing some homework, consider getting some good solid names in
new TLD’s in the aftermarket. It’s much better to get a good
quality name for a couple of hundred bucks than registering 20
with no real potential. I continue to see many high-quality (new
TLD) names being offered at what I’d call bargain prices. This
will not last in my opinion.
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