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For his 2006
forecast, Sheridan said "More good
times, and more lawyers I’m afraid. Congressional action on
domain related TradeMark/IP issues is also a dark cloud on the
horizon. Looking into my crystal ball I predict:
-
Marc Ofstrosky
will try to buy the whole f$#k)&% industry,
again!
-
Monte Cahn will parlay his
Webmaster Radio show celebrity into a wildly successful Vegas Lounge act
-
The DomainSponsor party at
T.R.A.F.F.I.C. West in Vegas will be sooo off the hook!
-
The Yahoo! guys
WILL pick up the check the next time they “entertain” with
Frank Schilling!"
|
Marc Ostrofsky
InternetREIT.com
|
For newcomers who are not yet
familiar with the major players, Marc Ostrofsky, along
with Bob Martin and Stuart Rabin, is
one of the three partners in InternetREIT.com,
a very active investment group that acquired a number of
top generic domain names in the past year. While his group
obviously believes in the future of domains, Ostrofsky
told us everyone should remember one old axiom; pigs get
fat, hogs get slaughtered. "Don't be a hog!,"
Ostrofsky said. "The one item I strongly suggest to folks
is to not hold everything. Buy and sell along the way. Major players all buy and sell.
Whether it is one name or part of a portfolio or an entire portfolio....sell...then buy. Don't hold everything -
ever. It's not smart investing. Smart investing means buy and
sell...sell and buy. Pigs get fat...hogs get
slaughtered!" |
In his reference
to Frank Schilling, Ron Sheridan was recalling an event immortalized in Paul Sloan's Business 2.0 article on the domain business. Schilling,
the most successful individual domainer in the world (and the
source of a huge chunk of Yahoo!'s traffic), was at a night spot
with a large contingent from Yahoo! one evening at the
T.R.A.F.F.I.C. East conference in Delray Beach last
October. When presented with the $1,000 cost for an item
that might not have passed muster on the Yahoo! crew's expense
account, Schilling picked up the tab for the whole group.
Even
though he started 2006 down a grand, Schilling's
NameAdministration.com portfolio assures he will be at the head of
the pack again this year. As for his own forecast, Schilling told
us, "I
see a significant (positive) shift in the perception of
owning generic domain names as a strategy, among online
businesses, media companies and investors in 2006."
"Imagine
for a moment that you owned a small 500 name portfolio of "Automotive"
related domain names generating 5,000 unique visits each day. These
type-in visitors are effectively 'searching' in their
browser's address bar. It is difficult for even large
content sites to generate 500 (let alone 5,000) targeted,
automotive searches in a day. In 2006 as media
companies, investors and established online businesses begin
to fathom that generic domains with type-in traffic contain fully
monetizeable searches for the subject matter within the
domain name, and as better monetization strategies
develop, the value of generic defensible domain names will
continue to increase," Schilling said.
|
Howard
Neu
T.R.A.F.F.I.C. Co-Founder |
Like Sheridan, Schilling viewed the last
T.R.A.F.F.I.C. East
conference as the year's most important event. "Never before
had analysts, investors, media and industry players turned out in
such numbers and all at the same time. The ripple
effect of that single show continues to reverberate,"
Schilling said.
Attorney
Howard Neu and domain pioneer Rick Schwartz
co-founded and continue to run the T.R.A.F.F.I.C. conferences. Neu
told us, "I may be overly optimistic, but I see a continuing
uptrend and recognition of the industry that will solidify Domain
Investment as a reasonable risk and good investment for the
financial and business community. T.R.A.F.F.I.C. Silicon Valley
will be held in Santa Clara, California, from January
30th to February 1st for just that reason. The
better educated the financial world is to the dynamics of domains
and their potential for enormous Returns on Investment, the
greater the opportunity is to spur the industry to loftier
heights than ever before." |
After
a successful debut last May, the Domain Roundtable Conference,
staged by Name Intelligence, Inc. will also return April
19-21 for a show in Bellevue, Washington. The Vice President
of Business Development for Name Intelligence, Jothan Frakes,
told us 2005 also brought good things to the company's core
businesses. "Name Intelligence doubled
from 100,000 users in 2004 to over 212,000 users during 2005, and
we released some amazing new tools targeted at domains and our
great industry."
| " Many new companies have appeared to join in the
domain business and adjunct products and services (appraisal,
escrow, drop catching, aftermarket, SEO/PPC, etc). The industry is
still gaining maturity, which means that the opportunity is there
for folks still interested in participating. Whether you are
the type that likes to pan for the gold, or the type that like to
sell the shovels and picks, there is still "some gold in them thar
hills!" for those that seek it with some wisdom,"
Frakes said. |
Frakes
moderating seminar
at 2005 Domain Roundtable |
Using
an automotive industry example above, Frank Schilling noted how
powerful a small portfolio of domains devoted to a single sector
can be. Frakes said others are coming to that realization too. "It is something that I call "FORK" - Fleet
of Registration Keywords - where companies register bundles of
.com domains containing three or four words comprising a string
crafted towards Overture and Adsense competition and direct
navigation success."
"Many large companies are getting sophisticated and realizing
that it is extremely valuable to craft a strategy around domain
registrations, and what the upside can be for a fraction of their
typical marketing budget for online advertisement. The negative
perceptions of domain names in corporations being tied to their
reactive brand protection are now melting away, and the course is
shifting into proactive efforts within marketing to drive sales
and revenue growth," Frakes said.
Looking
forward, Frakes added, "Watch for a few more 9 digit portfolio
acquisitions and some 7 (and 8!) digit .com sales to happen in
2006. There are still more of these that are ahead of
us.
Central Listing Service for .com/.net is going to change things
up in the dropping name market. This is pending contractual
agreements, but once the ink dries, watch for this to pick up
momentum quickly."
Frakes expects new TLDs to have an impact as well. "We've had
the opportunity to see a submission round for .travel, .jobs,
.mobi, .cat and other "Sponsored" TLDs (extensions that must must meet
specific requirements for eligibility), now watch for a round of
unsponsored TLD proposals. .Com will continue to be the
beachfront property, yet there will be some good opportunities for
those that know how to find it in these other namespaces."
"Google, Yahoo! and Microsoft all have new and exciting services to
show us in 2006 surrounding domain names, email, RSS, blogging,
podcasting, IM and search, some of which they might consider
category killers. 2006 will be a big year of innovation, and
of course, a big year for domain names. There is a lot of
attraction to domain names by those who are not yet involved, and
lots of incentive to stay passionate about our industry!"
Frakes concluded.
|
Rick
Schwartz has been passionate about domains for a decade now.
As one of the first to see what the future held, Schwartz has
earned a reputation as an industry visionary and he is the natural
choice to turn to for the last words on what might lie ahead, as
well as a savvy analysis of where we have been.
"For
the first time in a decade of taking a back seat to everyone,
domains and domainers were finally recognized as being an
important part of the net and have gotten credit for the vision
they had years ago," Schwartz said. "2005
began to substantiate what we all believed with numbers. The
domain channel is now recognized for providing search engines like
Google and Yahoo! with an estimated 15% of their entire
traffic base and when it comes to buying power we know it is
substantially more. Imagine how that will change the face of
things when buyers of traffic and others understand that!"
|
Rick
Schwartz |
"People like
Dan Warner
of Fabulous.com Research began to back up what we believe with
hard numbers. They published their findings for all to share. How
many large domain owners there are, how much money is being spent
on traffic via the domain channel and much more. Armed with
stunning numbers like this gives us all a leg up and other
industries are taking notice of what domain names represent."
"Possibly
the most significant 2005 event was that week after week 6
figure domain sales led the way and there are so many private sales that I think
7 figure deals may have them outnumbered. Plus, companies with money to spend are coming into the
space and driving prices up by buying less than stellar domains
for big money which drives up the prices of the really good
domains."
"The secret is out.
Domains are the single hottest commodity on the market today. They
have been for many years but that is what 2005 will be known for.
It just took a decade for it to be recognized. We keep getting
confirmation and as time goes on more and more folks will see what
we see."
"The net is here to stay
and domains are the real estate of the new century. Gold has been
around for thousands of years and it is going for $8,000 a pound.
Go buy a prime keyword domain for $8,000! It is just one more
piece of evidence that domains will go up faster in value than any
other commodity ever know to mankind. Something I have based my
entire business on and maybe now business will finally wake up and
grasp what that means as they have seen it unfold in front of
their eyes. No stock, no land, no diamond has ever gone up faster
in value and that trend will continue for 2006 and many years
beyond," Schwartz predicted.
"I have never been one
short on predictions of future events. But as time goes on events
become harder to predict. Of course that won’t stop me from
doing it for 2006! On the upside domains
will jump in price like never seen before. There are too many
industries that now recognize the value of a great domain name and
one easy to remember, spell and advertise. Every corner of
every industry have all their eyes and energy focused on the net.
That makes domains front and center. I would not be surprised to
see Google enter into the domain market in a big way thru either
acquisition of some portfolios or buying entire companies and
Yahoo! may not be far behind. The only surprise is that it has not
happened already."
| "Another promising event
is the significant and continuing jump in online sales compared to
sales at physical stores which are either flat, up by small single
digits or down. This will be the thing that fuels the growth of
the net more than any other single factor in my opinion. That
trend may continue for years to come and that will get more
businesses to invest more and more of their resources into the
net. We are just at the tip of this iceberg and this is the
granddaddy of all icebergs. That money that would normally be
funneled to traditional advertising and development mediums will
shift and we are in the direct path of that event. They can no
longer ignore 25% increases year after year and new players eating
into their sales." |
|
"The losers are Main Street, malls, TV, Radio and
print advertising. There is a huge amount of money coming to the
net and we are just in the beginning years of what may be the
biggest shift of those type expenditures in any of our lifetimes."
"On the downside, the
increasing value of domains will bring out the sharks that will
try to get domains in ways that won’t include buying them from the
owner. If they can take your home to use the land better and raise
more taxes, nobody should be surprised when your most prized
domain is the target of someone with ill intentions. One has to
just look at history to know this is coming. Will it be in 2006?
Perhaps not, but it won’t be that far into the future,"
Schwartz said.
"To see what is coming
you have to look at the real estate market 100 years ago and the
transformation it has gone thru over the years. When the best land
could not longer be built horizontally, they went vertical. That
will happen with domains in time. Matter of fact the domain market
will mirror the real estate market for as long as most of us are
alive. Study real estate and you will have your answer to where
domains are heading. It has been that way since day one and every
indication is that it will continue to parallel that industry.
There will be one exception. The value of domains will rise much
faster than real estate ever had a chance to because a domain
represents so much more than a piece of land since any domain can
be reached by every corner of the planet with a click of the
mouse."
"The other parallel is
with TV and the enormous growth it has had during the past 50
years. It is stunning when you combine these two elements and the
reason I have always been so bullish about domain names. I try to
envision how things will look when the net is fully developed. “WOW”
is the word that keeps coming to mind. The net is becoming the
center of the universe for the average person. He gets so many
things now from the net. From music, to news to DVD’s to online
banking and of course every businessperson has to check their
email several times a day. Compare that to 10 years ago. Few
believed that would be a reality. Today it is. 2006 will just
solidify it as will 2007 and beyond."
"If you have a good
portfolio of domains there is just one thing you need to obtain
your dreams. It has not changed in 10 years. That is patience. When we look back at the first 10 years and how
far we have come and look forward to the next 10 years and how far
we will go, none of us can truly imagine where we will be in those
10 years. It is beyond my imagination and beyond the imagination
of all who I know. Just get ready for the ride of your life
because the ride begins in 2006 because all the people important
to the domain world are now looking seriously at the events of the
last few years and finally looking at it through a serious view. The
net will not be going the way of CB radios. The net will outlast
all other mediums and make some of them obsolete. That alone is
great news for domain owners," Schwartz said.
 |
"Payouts will continue to
rise in 2006 and quality traffic will become harder and harder to
get as domains change hands and domainers develop the prime
properties they own. The dynamics will continue to change and
those changes all point to more valuable domains and traffic. The
competition for that traffic will become fierce. And if Microsoft
enters into the equation as long promised, we can only imagine
what will be the outcome and what things might look like after the
dust settles."
Schwartz concluded, "As domainers we are in the
right place at the right
time and you had to see it years ago to get your proper place.
There is only one way to get in the game now and that requires
lots of money. Luckily there is a lot of money out there and it is
coming our way. The longer they delay, the more they will pay. So
that is why I continually refer back to being patient. Doing
nothing is making folks fortunes whether they know it or not!"
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*****
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