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The Lowdown

March 17, 2009 Post

Here's the The Lowdown from DNJournal.com! Updated daily to fill you in on the latest buzz going around the domain name industry!

Compiled by Ron Jackson
(DN Journal Editor/Publisher)
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Like everyone else I was shocked when then President Bush announced last September that the nation's financial system might completely collapse without an immediate government bailout of various Wall Street firms and tottering banks. That was six months ago and though things are still extremely dicey, a funny thing happened on the way to the poorhouse. My domain sales business has been setting one monthly record after another and this month will almost certainly be the best ever with 11 decent sales (most in the low four-figure range) on the books barely halfway through the month. 

Today I exchanged notes with Pete Lamson, the Senior VP and General Manager of NameMedia's Domain Marketplace (including both the AfternicDLS and BuyDomains) and he told me they have also seen a noticeable uptick in sales since the middle of February. Lamson opined that some of the millions of people who have lost their jobs are taking the entrepreneurial route and buying domains to start businesses of their own (one of the few options people have with job prospects so weak in this recession). 

I told Pete I also believed the same force was at work and some of my buyers have confirmed that was their reason for purchasing a domain. Like NameMedia, my focus is almost entirely on the small to medium sized business (SMB) end user market, a segment of the domain aftermarket  that has held up better than any 

Peter Lamson, Senior VP and GM
of NameMedia's
Domain Marketplace

other. These newly minted entrepreneurs typically start out as a small enterprise with limited capital to work with so they naturally gravitate to the low to middle end of the domain market. 

This situation, fueled by a bad economy, has produced one wave that has broken in my favor after years of waiting. When I entered the business in 2002 I picked up a lot of good keyword domains and 3-letter acronyms in alternate extensions, primarily .us, .biz and .info. Over the next few years that portion of the portfolio eked out a profit but nothing compared to the returns owners of respectable .com domains were enjoying. 

I always thought the alt extensions had good potential because I felt they would  eventually start paying off as the diminishing pool of .com options forced SMB buyers to consider other extensions. I had gotten pretty tired of waiting for that day to come but in 2008 the alt TLDs really began picking up steam for me and the momentum is increasing here in 2009. 

This month I have sold names like Bulldozers.us, CheapInsurance.us and CreditCardDeals.info to small businesses, as well as a trio of 3-letter domains (a .us, a .biz and a .info) and a pair of domains to the State of Washington's Department of Transportation (GoodToGo.us and GoodToGo.info - names they have started redirecting to their existing .gov site that promotes Washington's electronic toll collection system). 

Part of a local Ford dealer's four-page 
newspaper spread  this morning - note 
their .biz web address at the bottom.

Most importantly, though it is a long way from being commonplace, I am seeing more alt extensions being advertised which helps build public recognition. This morning a large local Ford dealership had a four-page spread in the local community newspaper that prominently promoted the name HeritageFord.biz (another Ford dealer in California has HeritageFord.us). In many cases (including these two), the alt extension domain is used as a redirect to an existing .com site with a clunkier address, but the fact that the public is beginning to see more alt extensions in every day advertising should help them immensely as time goes on.

Now, make no mistake - .com is still king and all of the alt TLDs put together (excluding major country code domains) are still a minor force in the marketplace, but it has become enough of a force to make me happy I placed those bets several years ago. 

My experience over the past year is just one person's observation so it has to be considered anecdotal and not statistical evidence of any kind of major shift happening. Depending on the kind of keywords and phrases you hold in alt extensions, your results may be much better or much worse than mine. However, six months after it looked like the financial world was ending, what I am seeing leaves me feeling much better about the ability of domain names to continue providing a solid financial foundation in what are exceptionally scary times in the financial world at large.

One other note today, the folks at Bido.com rolled out a new option for domain sellers today. In the past they would only accept domains with no reserve for their auction platform. That severely limited the quality of domains submitted to them so they have adapted with a new program. If you want to list a name with a reserve you specify you can 

now do so, but a small cost will be involved if the domain does not sell. A name selected for auction will pay a listing fee of 3% of the Reserve Price, but you only pay if the name fails to sell. If it does sell Bido will take the 3% fee off the 8% commission they charge for selling a domain. I think it is a smart move that should lead to more exciting offerings on the Bido platform.
(Posted March 17, 2009)

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