Featured in the Wall Street Journal · Forbes · Newsweek · USA Today · New York Times · CNN/Money

March 25, 2014

Domain Sales

News Headlines


Dear Domey



YTD Sales Charts

The Lowdown

Legal Matters

Letters to Editor

Classified Ads

About Us



The State of the Industry January 2009: 15 Leading Experts Break Down What Went Wrong in 2008 and Predict What Will Happen in 2009
Page 2

By Ron Jackson 

Dr. Kevin Ham 
(Reinvent Technology)

Dr. Kevin Ham has been one of the most successful domain investors of all time. Having acquired a portfolio of stellar generic domain names his company, Reinvent Technology, has set about the task of developing some of their gems, including the geodomain that represents Dr. Ham's Canadian hometown, Vancouver.com. He told us, "The Global Financial Tsunami rippling through all markets and most industries has forced everyone to focus on the basic fundamentals of life and business.  It is vital that you have the right people working on the right projects for both the short term and long term vision of your company.  The most important thing is not to run out of cash, because the companies who have traditionally supplied the cash are not in a position to do so in 2009."  

"Google's continual dominance of search and paid advertising forced Microsoft to make a  

Dr. Kevin Ham
Founder, Reinvent Technology

bold move to acquire Yahoo, to give it a chance to perhaps slow Google's momentum. Yahoo played hard to get and was left at the altar and will really need to reinvent itself and innovate. While it is still too early to declare a judgment, with a revolving door at top management at Yahoo, a copycat strategy of following Google's moves in advertising and the domain channel with no clear competitive advantage, this may cause problems for the domain channel as a duopoly slowly turns into a monopoly. Planning for diversification of business models, revenue streams and community becomes vital for the long term sustainability of companies in the domain channel" Dr. Ham said. 

"I believe that 2008 was the tip of the iceberg and we will see in 2009 more of that iceberg, as the Christmas retail season gives way to a challenging 2009. Cash liquidity problems, cut back on spending by both consumers and businesses, poorly backed assets and securities nationally and globally, political unrest globally, with continued and unforeseen repercussions globally and cross industry will give rise to new powers."  

Kevin Ham on the cover of 
Business 2.0 magazine - June 2007

"The consolidation of the stronger enterprises, the rise of new innovators to take advantage of opportunities that are created as the masses pull back, and the resetting of expectations of skilled people will see the strong innovators arise in the same way Google emerged from the 2000 dot com crash."  

"Focus on leveraging all that you have built over the past many years, (domains, traffic, cash flow, technology, relationships) and marrying new innovative, simple concepts to provide value to select customer segments in context, will enable many traditional domain companies to reinvent themselves into global media companies in 2009 and beyond.  It will also be an opportunity to acquire assets, talent and intellectual property for a fraction of what it cost in previous years," Dr. Ham said, adding "Then again, all of this is work and sitting tight and waiting until you have a vision of what you wish to do and have a passion for realizing that vision may be the best path for many."  

He concluded "Here's to the waves of opportunities in 2009 and may many of us see and fill those opportunities to give true value and a sustainable basis for people, communities and businesses all around the world. It is still the early 1900's in terms of the Internet and technology. Let's Reinvent!"

Tim Schumacher (Sedo.com)

Sedo.com has long been one of the principal powers in the domain industry. Their popular domain sales platform is utilized by buyers and sellers around the world and they are also a leader in the PPC business. In looking back at what happened in 2008, Sedo co-founder and CEO Tim Schumacher told us "I guess we all – including, but not limited, to us in the domain industry – were surprised by the sharp economic downturn. As much as we all enjoyed the ride up to and including 2007, everyone, from Registries to Registrars to domain investors and domain companies like us, felt the industry turn south after Q1 / 2008."

"With the negative trends accelerating towards the end of the year, Registries like VeriSign posted lower domain registration numbers, Registrars saw much higher churn and even a net decline in registrations for speculative purposes, and domain investors as well as domain companies saw their advertising revenues and their domain sales decrease. Or in other words, the ripple-effects were felt through the entire value chain of Domaining."

"We also saw the first wave of – mostly smaller – providers to close down or get acquired. In regards to Sedo, we weren’t immune either, and we closed 2008 with slightly lower revenues than 2007. Fortunately for our customers and staff, we run a very tight ship and were able to maintain staffing levels and even pay out – both in domain sales and parking revenues – even more than last year’s $100 million. But we still aren’t happy, given that our goal is and continues to be to increase revenues for us and our clients year-in and year-out," Schumacher said.

Sedo CEO Tim Schumacher

Looking ahead to this year Schumacher predicted "2009 will be a challenging year. I agree with the statement that the web, and web advertising specifically, will be one of the better places to be, but it’ll probably be simply a less abysmal place than the rest. So my hunch is that 2009 will not be better than 2008, just reversed in terms of the quarters: Q1+Q2 will be bad, and the remainder of the year a little better." 

"While  we at Sedo truly believe in the value of domain names, advertising revenues will continue to be weaker than expected, unless the advertising providers will give the domain channel the dedication, transparency and freedom to innovate it deserves – and thereby, I don’t mean ‘going direct’ for the sake of squeezing out domain name owners in the long run. Instead, advertising providers should create an environment where innovative companies can utilize their advertiser base and technical solutions to compete fairly against each other in finding the best value-added solution for their clients, the domain name owners. I hope they do so. If they don’t, 2009 will be the year of direct monetization, as domain owners and their monetization companies will need to step things up to provide their valuable traffic directly to advertisers at fair rates.

"Also, 2009 will be the year of domain selling: with advertising revenues weak, domain selling will continue to grow in importance. And it makes total sense! The theory that ‘domain names will always grow in value’ is a myth, Schumacher said. "Instead, smart buying and smart selling always was and always will be the choice of the successful ones. It’s pretty simple: if someone offers you a 100x (yearly!) multiple on a domain name, because he likes or needs the name, and doesn’t care about the traffic, go for it. A few smart companies have already made this a revenue stream, and more will follow. Sedo.com will help by launching a major product during 2009 to facilitate that."

"Consolidation will also continue. There’s simply no reason to have dozens of parking companies around… just like there’s no reason to have dozens of Registrars around. Sedo/United Internet will continue to be open for acquisitions, as will our larger peers in the industry. We do expect the number of providers to go down in 2009, and the competition to increase among the fewer remaining providers – all to the benefit of domain owners. "

"If ultimately successful, we do not expect new TLDs approved under ICANN’s plans to create a major shift. Yes, some will create a nice niche, like .INFO, for example, which has earned it’s fair share of the market, but most others will be also-rans, just like most of the ones introduced in 2001 (hey, who can still remember all 7 of them?)."

Schumacher concluded by noting "New developments from ICANN may not have the impact some predict, but we do expect new legislation in the United States concerning domain names and Sedo remains committed to the Internet Commerce Association as the industry’s best vehicle for building consensus positions on industry self regulation, protection of third party rights, and educating law makers on the value of protecting domain properties."

Phil Corwin (Internet Commerce Association)

Phil Corwin is the Legal Counsel for the Internet Commerce Association (ICA) and also serves at the Washington D.C. lobbysist for the domain industry trade group. Corwin told us "As Counsel for the ICA handling legal and public policy issues in Washington and within ICANN, I believe that the most significant trend of 2008 was the broad domain name industry achieving visibility, credibility, and, most importantly, real influence in these key decision-making forums. The full scope of ICA’s 2008 activities is covered in the Annual Report recently posted on our website – but, to cite just a few examples, with the help and support of our members we:  
  • Stopped the Snowe bill dead in its tracks and thereby prevented the establishment of broader and more punitive infringement rules for domains.

  • Became an International member of ICANN’s Business Constituency and thereby gained the ability to influence its policy development process from the inside, and to show the rest of the business community that we are responsible entrepreneurs and not cybersquatters.

















   Phil Corwin
   Internet Commerce Association

  • Pushed ICANN toward adoption of a substantially strengthened Registrar Accreditation Agreement to help prevent a recurrence of the Registerfly collapse.

  • Filed a friend of the court brief in the Kentucky domain seizure case that was favorably cited in subsequent judicial hearings.

  • Moved toward the establishment of a sister organization in the EU.  

These are substantial achievements for an industry that had no consistent and organized public policy apparatus until late 2006. Domainers and the companies that serve them fared far better on these and other important matters because the ICA was there to keep an eye out and speak up for them. So, while the economic trends may have been downward in 2008, the policy influence trend was definitely on an upward trajectory. "

Looking forward Corwin said, "The great challenge in 2009 for the ICA will be to build upon our progress in the past year and increase the benefits we deliver to members across a broad range of issues. Our success in that area will be tied to the challenge of maintaining and expanding support from the broad domain name investment and development industry. There certainly will be no shortage of threats and opportunities, including:

  • Continuing to provide input to ICANN on its new gTLD program to assure that any rollout is carefully managed under rules that are not adverse to industry interests.

  • Responding defensively to any attempt by trademark interests to amend the Anticybersquatting Consumer Protection Act so as to stack the deck against domainers, while simultaneously seeking safe harbors and clear standards in any rewrite to benefit our members.

  • Working with public interest groups, online gambling associations, and other parties to develop preemptive legislation to establish clear jurisdictional and due process safeguards to prevent a recurrence of the Kentucky domain seizures.

  • Weighing in as the U.S. government considers whether to extend or terminate its oversight of ICANN when the present agreement expires in September.  


I am highly confident that we can serve the industry well on all of these important matters, as well as the unanticipated challenges that inevitably arise without advance warning, so long as we retain the continued support and participation of a growing roster of ICA members."

Michael Mann (Washington VC)

Michael Mann founded BuyDomains.com and, after selling that company to NameMedia, founded his current company, WashingtonVC. Mann has been the subject of two DN Journal Cover stories (one of our earliest ones in August 2003 and another in September 2007). Mann said  "The most significant event for the domain industry in '08 is Google changing its relationships with bulk domain parkers so they earn less due to blacklisting, advertiser opt out checkboxes, and lower rev shares all around; secondly the crash of the economy overall has been limiting domainer portfolio valuations and corresponding liquidity options."

Even so Mann sees a lot of opportunities in 2009 for those bold enough to seize them. "The sky is the limit: premium domains can be purchased at half the price as a year ago, technologies are ever more efficient, effective and inexpensive, employees will work harder for less, investors need new legit sources of high returns, etc. Despite global economic weakness more people will continue to do more things online perpetually, leaving extensive opportunities for those who are building and branding viable components for the next generation of Internet.

Michael Mann
WashingtonVC Founder

Dr. Chris Hartnett 

Dr. Chris Hartnett has been called the father of Internet Telephony after creating companies that reached a valuation close to $3 billion. Since leaving that field he has spent much of his time in the domain industry building his own domain portfolio and speaking at industry events (Dr. Hartnett also serves on the board of directors of Kevin Ham's Reinvent Technology). Dr. Hartnett told us "2008 was definitely “The Year of Change” "All that talk about transparency, open source and mass collaboration now seems to be the rule rather than an option or choice. We can walk the path alone to some degree but if we don’t learn to work together, our future isn’t very bright and 2008 taught us that every economy and every country is intimately connected and practically speaking, interdependent upon the other."

Dr. Chris Hartnett making an early VOIP 
call (long distance call over the Internet).

"Business, like everything else in life, needs to be sustainable, but there is only one guarantee: “Change is inevitable and things NEVER stay the same.” The wise tell us that there are 5 key elements for dealing with Change and that the “unchanging” fundamentals for fiscal and social progress are: Stability, Adaptability, Purification, Integration and Growth. If any one of these five essential elements for progress is missing from our corporate business models or from our personal lives, it is inevitable that success will be derailed and will come to a screeching halt."

"During 2008, the domain world found our Stability was truly shaken, not stirred, at its core; we were forced to be Adaptable just to survive; Purification seemed to be the most dominant player of the times… from natural disasters such as fires, earthquakes and hurricanes, to the major destruction and decay in our industry’s basic core sustenance, PPC revenues. Not to mention the global purification and the rise and fall of oil prices, the collapse of banks and credit markets, implosion of the insurance companies, the day of reckoning for the auto industry,  the airline industry, the

housing industry and the newspaper and magazine industries. The list of significant changes go on and on. Integration of these powerful lessons of Change is a must and our personal Growth no doubt will be the only guaranteed winner and will later be termed as experience and wisdom, with all bets off when it comes to guaranteed solvency for anyone, corporate or otherwise, as even the super wealthy in Palm Beach now have to attest," Dr. Hartnett noted.  

"Leading up to 2008, there was much talk on the ever growing multitude of blogs and conferences discussing such topics as how long could the good times last and how high could prices go before a bust could occur and would the PPC revenue model actually be sustainable over time like its analogous counterpart in the brick and mort ar world (income producing real estate.) The pundits in our industry and the wise were talking about diversification, alternatives, development and putting away something for a rainy day and were strongly cautioning about keeping the egos out of the great domain name “higher and higher price chase” and were cautioned to watch out for the cyclical waves of Change that would inevitably wash up on the Domainer’s shores."

"Sure enough, right on schedule, 2008 saw the highly feared drop in PPC revenues to the tune of over 40%. We saw Google “going direct” and competing with parking companies as the self- proclaimed doers of no evil took questionable steps to secretly self-police and control an entire industry in order to possibly selfishly gain a much stronger hand in the lucrative internet advertising world. Meanwhile, the deposed king Yahoo, vacationed in the long anticipated but very disappointing virtual Panama and fought to stay afloat and keep their jobs while fending off takeover advances by the ever late to the party Microsoft, who needs domains and the internet advertising world more than their blinding arrogance will allow them to see."

"In 2008, the Yahoos watched their stock value drop by 75% in the process of sticking to old paradigms and gloating over past accomplishments while idiotically leaving a major 40 plus billion dollar golden goose on the table unattended because of their hardened arrogance and distant past success that overshadowed basic common sense. The kids from “cloudydale” proved beyond any reasonable doubt that past performance most certainly is no guaranteed measure of future performance and when presented with the precious gift of a giant golden exit opportunity, learn to get your ego out of the way and ring the cash register while you can."

"Although not hit as hard as many industries, Domainers, if nothing else, learned in 2008 that all markets go up and also go down and the world of domain names is no exception even though many of us believed in our own press and hype to the point of thinking because we owned domains we were granted some mystical cosmic pass from the cyclical natural laws of

Dr. Chris Hartnett and Dr. Kevin Ham
at Harvard Business School Advanced 
Management Program
graduation ceremony 
October 24, 2008 in Cambridge, Mass.

creation, maintenance and destruction. Change although seemingly disruptive at times, is actually good, healthy, and evolutionary and plays a most essential part in the bigger picture of life. It may very well be that Change gives us a much needed opportunity to Reinvent ourselves, and Reinvent the way we cherish and perceive that which is most important and truly essential to our very existence, far beyond the illusions of business, money, power and fame. It may be that Change allows and at times, forces us to fully appreciate all that we have, the precious gifts of family, friends and all that is simple, pure and good.

"The major cycles of Change that arrived in 2008 leave Domainers with tremendous opportunities for 2009 and beyond. Amongst its other virtues, Change forces innovation. Innovation is the life blood for long term sustainability for any company or industry. Innovation breaks the tight grip of old habits and helps to dissolve mistakes hardened by ignorance and arrogance, usually the two unfortunate byproducts of past successes."  

"The unfortunate drop or possibly planned or even manipulated orchestration of the decline in PPC revenues can either be a final death blow to some Domainers, Parking Companies and Domain Name Investors or alternatively, the situation can become a catalyst for lucrative innovation and Reinvention for others. The choice, as always, is ours."  

"We will endure and progress in 2009 if we remain stable within ourselves; adapt to the changes we are presented with; accept the purification around us as healthy and constructive; integrate the changes that arrive into our plans and strategy without resistance, and finally, if we find a way to enjoy our growth, even if it seems painful at first.  May you all find:  Peace, Joy, Good Luck, Those that Love you and Those you Love, and Prosperity in the coming new and exciting year.  Finally the two axioms I will be living by during 2009 to embrace the changes
within myself and the myriad of inevitable changes within our Domain Name world. “The Lord helps those who help themselves” and “Trust in God but tie up your camel.”
Coming Up On Page 3 -
2009 Forecasts from:
  • Australia's Michael Gilmour

  • Real Estate Domain Giant Rob Grant

  • India's Rising Business Star 
    Divyank Turakhia

  • T.R.A.F.F.I.C. Co-Founder, Attorney and Domain Investor Howard Neu


Find out why Rob Grant will still 
be fishing for domains in 2009!

Direct Links to All Pages Featuring our Panel of Experts:

Page 1 featuring: Monte Cahn, Ari Goldberger, Andrew Miller, The Castello Brothers.

Page 2 featuring: Dr. Kevin Ham, Tim Schumacher, Phil Corwin, Michael Mann and Dr. Chris Hartnett.

Page 3 featuring: Michael Gilmour, Rob Grant, Divyank Turakhia and Howard Neu.

Page 4 featuring "cleanup hitter" Rick Schwartz.

Return to DN Journal Home Page

 Home  Domain Sales  YTD Sales Charts   Latest News  The Lowdown  Articles  
Legal Matters
  Dear Domey  Letters to Editor  Resources  Classified Ads  Archive  About Us

Hit Counter



Copyright 2009 DNJournal.com - an Internet Edge, Inc. company. 
No material may be copied from this site without expressed written consent.