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The State of the Industry 2016: A Rising Tide from China Lifted All Boats Last Year - Now 13 Experts Predict What Will Happen Next 

By Ron Jackson

Welcome to DNJournal.com's 12th annual State of the Industry Cover Story! As we do at the start of each new year, we called upon leading experts from across the various sectors of the domain industry to see what they viewed as the most important developments in the past year, as well what they expect to see happen in the new year ahead. 

When we convened last year's panel, the consensus was that, even though the industry was coming off a major advance in 2014, things would get even better in 2015. The experts turned out to be right - perhaps even more right than they expected - as a sudden influx of Chinese buyers, especially in the second half of year, lit a huge fire under domain sales - both in the aftermarket and for many existing and new TLD registry operators.

Heading into 2016 many are wondering if that phenomenal surge  can continue. There are also ongoing questions about the long term prospects for hundreds of new gTLDs (and conversely - what their continued deployment may mean for the legacy extensions like .com, .net and .org). To get some answers to those and other pressing questions we brought 

2015-2016 image from Bigstock

together 13 industry experts who were willing to weigh in on what happened in 2015 and what they envision ahead. These are all names that domain veterans will know well but with the latest domain boom drawing new people into the business every day, we will start be formally introducing them - while also thanking them for taking taking time out of their busy schedules to share their thoughts with our readers.


Our 2016 Panel of Experts

Row 1: (L to R): George Hong (Guta.com), Tessa Holcomb (Igloo.com), Alan Dunn (NameCorp.com), Tracy Fogarty (eNaming.com).

Row 2: (L to R): Tobias Flaitz (Sedo.com), Paul Nicks (GoDaddy.com), Mike Mann (DomainMarket.com), Michael Castello (CCIN.com). 

Row 3: (L to R): Paul Stahura (Donuts Inc.), Lori Anne Wardi (Neustar), David Warmuz (Trellian/Above.com), Ash Rahimi (RookMedia).

Row 4: Deepak Daftari (eSiksha.com).

Domain Investors

Since China came up over and over again in our conversations we will start with commentary from several experts whose primary business is aftermarket domain sales - a sector that was turned upside down - in a good way - by Chinese buyers. We talked some of the leading  buyers, sellers and  brokers in the business to help make sense of it all. We'll start with comments from Philadelphia based broker George Hong, a native of China, whose familiarity with key players on both sides of the Pacific have put him right in the middle of this extraordinary boom. George's business grew so much in 2015 that he just  opened a new office in Xiamen, China to complement his Stateside operations. 

George Hong
President & CEO, Guta.com

George Hong
President & CEO, Guta.com

In general, 2015 was a terrific year that was filled with action for the domain industry and Guta. Due to strong demands from Chinese buyers, the value of short domains, such as 2-4 letter, 2-5 number .com, .cn, .cc and a few other extensions, went up sharply. Some name types doubled or tripled in value, while others went up at least 10 times in value in 2015.  

Here are some of the reasons why the demand for domain names were higher than ever before:

1.  The Chinese government encouraged people to start up companies

2.  On July 4th, China unveiled its “Internet Plusaction plan, aiming to integrate the Internet with traditional industries, and fuel economic growth. Internet Plus startups need domain names.

3.  It is easier than ever before to invest in certain types of domain names, which helps attract new investors.

4.  There are a lot of domain financing companies empowering domain investors to buy more names than they could afford if full cash payment was required up front.

In 2015, Guta brokered five 7-figure USD transactions (4 of the 5 were  multi-million dollar sales). The prices of our top four individual domain sales are confidential, but if they were publicly reported, they would rank as the 3rd, 4th, 5th and 6th highest domain name sales of 2015, according to the the final 2015 Top 100 Domain Sales Chart published by DNJournal. As we all know that Beijing is the capital city of China and I was extremely proud to broker the sale of Beijing.com between Godaddy and a Chinese buyer. Another transaction that meant a lot to me was the sale of 989.com for $818,181.81 - a sale we handled as the seller’s broker for Rick Schwartz.

Trading in premium domains was not the only way investors made money in 2015.  My friend and client, Mr. Xie Yipeng made a nice profit by buying and flipping PPP.com but he made way more money bulk registering and selling 6-number .com domains. In the 2 day span of September 12-13, 2015, he registered 33,000 6-number .com domains. On November 1st, Mr Xie claimed that he sold most of his 6 number.com and made a profit of CNY 17 Million (more than $2.5 million USD) in the process. Inspired by his success, a lot of domain investors started bulk registering new domains in all extensions. 

In 2015, for many investors, Domain Investment turned from a part time hobby to a hot and trendy occupation. The domain business became a viable, serious and noble business.  The image of domain investors positively improved. The red-hot domain market has drawn the attention of both newcomers and legendary investors (some of  whom had retired or semi retired for a few years before the current boom brought them back).

Looking ahead to 2016, there are several things to consider:

  • The devaluation of China’s Yuan could have a major impact on the secondary market. If the USD/CNY exchange rate keeps growing, it will increase the difficulty of Chinese buyers to buy domains from overseas.  

George Hong in his new Xiamen, China office.

  • The Chinese economic situation & Regulations from China’s State Administration of Foreign Exchange could impact how much USD Chinese buyers can send overseas.

  • There will be massive dropping of domain names especially in the last quarter of 2016. Some investors will lose money that they were not prepared to lose while registries will try to find ways to keep their renewal rate high.

  • There will be more collaboration among domain companies. In 2015, Guta worked closely with multiple brokers to sell several domain names (two of these names were sold for multiple millions each). We hope we can co-broker more domains with other brokers. If you are a broker and have good names for the Chinese market, please talk to us.

  • Despite the challenges above, more and more new Chinese Investors and Capital will be drawn to domain markets. Short and premium .com domains will continue to rise in value. The demand for good domains from the Chinese market will reach a historic high

  • The Chinese market will become an important market for many more domain companies. Guta’s focus in 2016 is still to help western country domain owners/brokers sell domains to Chinese buyers. To be closer to our buyers and to prepare for the stronger demands from the Chinese market, we set up an office in Xiamen in December 2015 and have begun expanding our team to better serve our clients. In 2015, I took four trips to China and spent more than 80 days there. In 2016, I plan to stay there longer than I did in 2015.

Tessa Holcomb 
Co-Founder & CEO, Igloo.com

Tessa Holcomb, who was profiled in our June 2015 Cover Story, is another accomplished, veteran domain broker who is no stranger to seven-figure transactions. As one of the smartest and hardest working people in the space we always value her insight into current industry trends.

Tessa Holcomb
Co-Founder & CEO, Igloo.com

It would be impossible to talk about trends in the Domaining world in 2015 without addressing the staggering growth in China. Servicing this market, successfully, can be challenging but the Igloo team rose the occasion trading traditional email for QQ and WeChat and adopting the CST (China Standard Time) time zone! It was great to be part of the first DOMAINfest Asia, feel the buzz first hand and even transact one of our biggest sales of the year while there!  

While the industry was in a frenzy over the Chinese market and their acquisition of specific non-generic domains, what became apparent to me was the number of opportunities being left on the table within the startup and small business communities. As an industry we took a step back in 2015 from educating these markets. Looking ahead to 2016, we need to re-invest more time and resources in these areas for sustainable growth.  

While it’s difficult to predict how much longer the Chinese Market will prevail, we do recognize that it will level off in time. With this in mind, we are looking to 2016 as the time to grow and educate more end users. We will be making our presence known in new venues both locally and globally. 

Working with startups and top-rated business schools will be a more pointed focus, as we need to concentrate not on the whims of singular markets, but on expanding our core market. Over the past year we have spoken at several startup events where the majority of the founders either didn’t know there was a secondary market for the domains they wanted, or weren’t aware they could work with a broker to help them acquire a domain name that is already owned and/or being used. 

Igloo has continued to see more clients from the startup sector coming back for their exact match .com domain as they benefit from additional rounds of funding. We have also seen a rise in the acquisition of additional intellectual property assets including trademarks, patents and social media handles and expect this trend to both continue and grow.   

With GoDaddy’s acquisitions of Marchex's Archeo and Berkens’ Worldwide Media domain portfolios, to Freelancer.com acquiring Escrow.com and Flippa acquiring Domain Holdings, consolidations, acquisitions and selling off of major portfolios were a trend in 2015 that I don’t see slowing down anytime soon. New companies, brokerages and marketplaces (including our own) were launched giving investors more options to trade in the secondary market across all price points. We’re seeing a renewed interest in top tier generic domain names and January is already off to a great start. If you’ve been holding on for the right time to sell yours, I’d highly consider 2016 as your year

Alan Dunn 
Managing Director, NameCorp.com

Alan Dunn's many years of successful experience as a domain investor, broker, consultant, researcher and writer has made him one of the most respected figures in the industry. In 2015 he began writing articles for TechCrunch on the Chinese market boom that carried the news far beyond the domain world.

Alan Dunn
Managing Director, NameCorp.com

There is no doubt in my mind that China was the biggest story of 2015 and will continue to be in 2016. The amount of activity to a single group of buyers is unprecedented in this industry and, in many ways, resemble the mid-nineties for domain name acquisitions. The second most important story was GoDaddy's acquisition of the Marchex and MostWantedDomains portfolios. Both of these events (China and GoDaddy) have accelerated domain name investing into mainstream media which was a huge step for the industry overall.

2016 will be a fun year. I believe we will ultimately see new highs from Chinese investors (with a couple ups and downs along the way) and more large acquisitions in the domain portfolio space. I also think we are due for one or two companies to disrupt the space. Some will be innovative (like Uniregistry is doing this with the marketplace) and others will be financially driven which may result in higher costs for domainers (consolidation of drop auctions for example). The industry is maturing now with corporate money arriving so change is inevitable at some point. Overall, I believe 2016 will be an incredible year for the industry as a whole - and especially for owners of high-quality short domain names.

Tracy Fogarty 
CEO & Founder, eNaming.com

Tracy Fogarty
CEO & Founder, eNaming.com

After a very successful stint with DomainHoldings.com, broker Tracy Fogarty opened her own shop at eNaming.com and quickly began posting high dollar sales that turned up often on our weekly domain sales charts. With respect to the most dominant factor in the domain market last year, she made it unanimous.

The most significant event of 2015 was of course China. We've seen an unprecedented demand for short .com domains as well as numeric domain names. While there are a few theories why it happened I've yet to see one I'm fully comfortable with.

Looking ahead, eNaming focuses on domain names as utility. While traders will trade, we're driven by fulfilling the demand of business owners first. Our main challenge is to continue to educate the domain buyers. We believe that for business owners, the correct valuation of domain names must integrate their business objectives, budgets, vision, and a plan. Domain names are direct marketing tools and in the hand of talented marketers can create and be the catalyst of change, growth, and profits.

Tobias Flaitz
CEO, Sedo.com

Domain Investors
Domain Investors
Domain Investors

While China dominated the domain buyer, seller, broker landscape, there was more to see industry wide in 2015 and few were in a better seat to witness the high altitude view than Sedo CEO Tobias Flaitz. In addition to having a leading global domain marketplace (that obviously benefited from China), Sedo is a long time power in domain monetization and has also taken a major role in supporting new gTLDs.

Sedo CEO Tobias Flaitz

There are four visibly significant trends over the course of the last year:

(1) The growth of .com domain names has proven that this is still the most sought after type of domain with average sales values peaking in the past 12 months and other data backing its position as the solid king of TLDs. Established markets as well as growing markets such as China, India and other Asian markets have demonstrated a continued upward demand for .com further supporting .com’s reign and success among other names.

(2) China‘s successful market surge was an anticipated event but it still stunned many in regards to how quickly it became the number one country globally for domains purchased by Chinese buyers.

(3) In general Registries, Registrars as well as marketplaces like Sedo benefited from a growing demand in domain names after a challenging interim development in 2014. There is a clear trend towards a potential renaissance period for domain names which are again being sought after in conjunction with effective online marketing.

(4) New gTLDs finally started to gain traction in 2015 and are not only seeing demand from the domain industry but there has also been a significant uptake in awareness outside the domain industry. This has led to overall interest expanding along with diversifying of the audience base all guided by marketing activities and initiatives of new gTLD registries (i.e. in collaboration with Sedo).

New gTLDs continue to make an impact even with .com’s steady lead within the domain name market. 2015 was significant for investors as well as for end users in utilizing even more new names that came onto the market. Sedo’s registry partners like .Club and others such as .Ski are positive examples of how marketing is essential to create awareness for the new names. Bigger players like Donuts, StartingDot as well as those focused on one TLD alike have benefited from our mutually beneficial partnerships. Back in 2014, Sedo started a program to support the registries with and in 2015 we greatly expanded our efforts by scaling larger and collaborating at even more events. The Sedo gTLD-topped frozen yogurt concept captivated the attention of visitors at events such as SXSW and dmexco where larger groups of end user and multipliers representing big brands, startups and marketing and advertising agencies could be addressed. Continued and additional promotional efforts like this are crucial in the sustainability of the new gTLDs.  

The Sedo team, led by CEO Tobias Flaitz (standing at center), along with some of their registry partners, celebrate a successful 2015 dmexco show last September in Cologne, Germany

A reflection on the past year would not be complete without the mention of China and their surge in the purchasing of domain names especially in the latter part of 2015. This made a dramatic impact on the domain industry and secondary market sales. Sedo saw a spike of around 43% of transactions involving buyers and sellers in China. Demand is being driven because Chinese investors are looking for investment alternatives such as domains after downtrends of both the stock and real estate markets. Numeric and shorter domain names are especially appealing to these investors and Sedo had many sales pull in upwards of five and even six figures: Give.com ($500,000), PAX.com ($200,000), 1905.com ($57,000), etc. It should be noted that these are a sampling of high grossing sales of short character names and are not all-encompassing of top sales in this category. This nevertheless was a strong area for new sales and one we’ll maintain and grow upon during 2016.  

Many industry news outlets consistently covered the increase over the past year of BuyNow sales and the trend toward fixed-price domain names. This pricing method creates an easy and accessible path to purchase, potentially converting interest in particular names to sales quicker than negotiations drawn out over a longer period. This doesn’t overshadow negotiable or Make Offer sales as a perfectly viable method for domain sales. While we’re discussing the accessibility of domains and service, it bears mentioning the gravitation of customers towards apps or social networks to access information. Even with the increase of the use and presence of these channels very rampant in today’s world, it is our belief that businesses will not use these as their primary delivery method for goods and services.  

Sedo’s core business has a long history of success among our domain parking services and this year was no different. 2015 saw monetization as a continued valuable revenue source for domain owners and the link of parking and trading activities supported domain sales across the board.

Paul Nicks
Senior Director, Aftermarket, GoDaddy.com

In addition to being the world's leading domain registrar GoDaddy operates a booming domain marketplace. Paul Nicks, their Senior Director, Aftermarket, never fails to cover every base so it's not surprising that he is looking at - but also beyond - China's current fixation on short acronym and numeric domains. 

Paul Nicks
Sr. Director, Aftermarket, GoDaddy.com

2015 in domains was all about the Chinese market. We saw a huge uptick in domain investment in the region, which is something we hadn’t seen before. Chinese investment in numeric domain names as well as domains with just a few significant letters skyrocketed last year, and this looks set to continue. There’s an overall increase in domain brokering between America and China and the question on my mind as we head into 2016 is whether or not Chinese domainers will continue to see domains as a more stable investment vehicle, and diversify their investments accordingly (possibly expanding into keyword-rich English-language words and phrases), given the current state of the Chinese economy. 

This year at GoDaddy, and across the domain industry more broadly, we’re really interested in everything mobile. Given that the domain aftermarket is very time sensitive and competitive, 

it’s essential that investors are able to participate in auctions from anywhere at any time, so I think we’ll continue to see domain investment go increasingly mobile. Last week we announced The Domain Investor app, our first mobile app dedicated specifically to investors, and other domain aftermarkets are putting out their own mobile apps as well. Overall, I think domaining will grow in mobile this year, whether through apps or a responsive, integrated, consolidated mobile experience to help get domainers off their desktops. 

Mike Mann
Domain Investor, Entrepreneur (MikeMann.com), Founder at DomainMarket.com

We've heard from leading brokers and executives at top aftermarket platforms but what do individual domain investors have to say? We contacted a couple of the best, one who has a foot two camps. Mike Mann founded and later sold BuyDomains.com (still one of the top aftermarket platforms) and now runs DomainMarket.com. He has also been one of the most successful individual domain investors of all time, resulting in him being the subject of two DNJournal Cover Stories - the first in our first year of operation back in 2003 and the second in 2007. Mann has never been bashful about saying what he thinks and he again makes it clear what he thinks about investing in .com vs. the rest of the field.

Mike Mann

In 2015 Chinese investors went in heavy for short .Com domain names that met their specific criteria. In general, super premium .Com domains held their long term value all around. Those who have invested in alternative gTLDs (i.e., not .Com), other than the best of the best, have taken undue risk, given the virtually limitless expanding gTLD space which continues to dilute its predominantly valueless assets over and over, while .Com valuations rise.

For example, DomainMarket.com has 250,000 of the world’s best quality and best priced, contextual .Com domains for immediate sale and transfer, as a long term safe alternative to the alternatives.

On one hand folks may believe new domains devalue .Com to some degree, but in fact that is only true for the ones of questionable value in the first place. The best .Coms increase in true value over time, regardless of their sale prices in this confusing, illiquid market space. .Com will keep rising due to scarcity, more internet users worldwide, smarter branding, marketing and domaining experts; and because the gTLD alternatives can’t distinguish themselves; 

they drive additional awareness, traffic and value to the corresponding .Com domains. (Especially if anyone ever uses the alternatives in commerce, as opposed to just rampant speculation currently. Right now only a miniscule percentage of global web sites use the new style domains.)

On average, the smartest marketing people in the US were hired by the biggest companies in the US. And every single Fortune 500 company uses a .Com domain, likely many .Com domains. None are foolish enough to use alternatives that could confuse their customers, or drive value and traffic to the corresponding .Com. 

Presumably Chinese knowledge, and worldwide knowledge of branding and investing experts will expand in 2016, and possibly cause additional .Com niches to spike in sales volume and pricing. (likely two word category killers, which have largely been overlooked so far).

Moreover, I believe the current global stock market crisis may drive fresh investors to try alternative assets like .Com domains; but we also find the overall drain in wealth to be a negative. Therefore, we believe the “market crash” is a net neutral to the domain investing environment.

Mike Mann speaking at the 2011 T.R.A.F.F.I.C. East conference in Florida.

There is no, and never will be any, reason for consumers to risk the cost or bad branding of alternative domains, except if they can get one of the very best at a very low cost as a means of testing only, something like “golf.club” or “abc.xyz” (which they may still find confuse people and drive value to GolfClub.com and AbcXyz.com.) So any way you slice it expect no long term profits for end user investors and branders in alternative domains except in rare circumstances. Possibly some of the registries and registrars themselves may have a hit with short term launches of the better gTLDs, like pending ones .web, .blog or .commerce.

But again, since they all constantly dilute each other but drive more value to .Com, they will overwhelmingly fail to make long term profits. Fewer and fewer alternatives will get registered on average over time, and the majority of those which are unused in commerce, that were purchased for speculative purposes, will ultimately not be renewed and will be deleted over the next few years. Also fewer new gTLDs will be launched overall as some of the others become documented failures.

.Com is, was, and will always be king. Remember this before you lose your ass. Also only invest in the very best .Com at the very lowest prices. Every other strategy is too risky for all but a handful of people in the world who happen to have a very special trading edge and skill set, plus a lot of investment capital and tolerance for risk.

Michael Castello, 
Co-Founder, President & CEO, Castello Cities Internet Network

Michael Castello, who, along with his brother David, was profiled in a 2006 DNJournal.com Cover Story and the remarkable story behind his $3.1 million sale of Whisky.com in 2014 was told in our February 2014 Cover Story. He is one of the world's most successful domain investor/developers whose development successes include PalmSprings.com and Nashville.com. Michael's knack for spotting future trends years before they happen could qualify him as a futurist as well (his comments on Virtual Reality and Artificial Intelligence being a couple of current examples).

Michael Castello

Without a doubt, one of the most significant events of 2015, for the domain name industry, was the Chinese market investing in domain names including the new extensions. Whether as a hedge on their markets or strategy to find loopholes around government sanctions, the Asian market saw greater value then previous years. I am skeptical on the long term viability of their investments but a large market could redefine what has added value within their own culture. In the end it comes down to people making a profit and if it continues into 2016, many portfolios will continue to grow in earnest in size and worth.  

NamesCon was an even greater success than the previous year. That shows a robust interest in all extensions. But it is still a market within a market which has had little impact on a national and global scale. Social trends and mannerisms in technology will eventually cause a greater need for people’s livelihood to include and immerse into domain names and what they offer for future security, business and advancement.  

We have yet to see a dynamic shift from the 

public wanting domain names to “needing” them. It’s a process, but the whole domain space will benefit when that occurs.    

I see 2016 as being a tremulous period. There will be many changes and those that adapt to those changes could reap millions if not billions. The new registries could find their coffers swell depending on the social changes that may occur. People would like to be spending more time at home. Issues like security, being home with family, spending less on commuting and just being in the comfort of one’s home will be paramount to our lives in the future. This equates to people finding a channel to make it work. Those channels are domain names which are already in everyone’s home through the Internet.  

Those that own premium and hyper domain names could see future investors viewing their portfolios as treasure. If investors spend millions on a Picasso or Rembrandt as an investment why not a portfolio of highly desirable domain names?  

Michael Castello speaking at the 2008 GeoDomain Expo in Chicago.

Virtual reality will play an ever growing part of society. Words that have meaning and are conceptual will be more in demand. I cannot emphasis enough how important VR will be in our future. I believe we are at the precipice of some very dynamic changes in society.   

AI will make for an interesting play in the next five years. We will see more movement into word commands for our devices and droids. Single word brands will have greater uses for these new technologies. Those who control them, will have greater ability to define them and how they are used. They are Power Words.  

On a note of caution regarding artificial intelligence, I would suggest that those connected to the Internet, use some disinformation to counter this intelligence from analyzing and matching our thought patterns. Computers and data can be a great service when we are in control, but will be used more to direct and move us. Don’t be a cog in the wheel. 

Paul Stahura
Co-Founder & CEO, Donuts Inc.

Domain Investors
Domain Investors
Domain Investors

Paul Stahura
Co-Founder & CEO, Donuts Inc.

Like Michael Castello above, Paul Stahura, the Co-Founder and CEO of the largest new gTLD registry operator, Donuts Inc., also thinks he has a good idea of what the future holds. Paul sees an extremely bright future for new domain extensions - so much so that he has bet a good chunk of his personal fortune on it (as detailed in our compelling July 2015 Cover Story profiling the prolific industry veteran). 

The most significant trend in 2015 was the industry's effort to ramp up awareness of new gTLDs.  Even as registrations in new gTLDs approached and then surpassed the 10 million mark, a significant milestone, it remained clear that end-user awareness could use improvement.  Donuts, and other companies, invested heavily in consumer marketing, which has markedly improved in 2015.

Donuts is very pleased with growth in the new gTLD space going into 2016.  I see consolidation in the industry as a trend in 2016 as companies seek to solidify their holdings and the industry finds its way to a healthy equilibrium.  I also see an increased effort on the part of industry leaders to self-regulate and disinvite regulation that would be considered invasive.

Lori Anne Wardi
VP, Registry Services, Neustar

Domain Investors
Domain Investors
Domain Investors

Industry veteran Lori Anne Wardi is well-known for helping lead the widely hailed marketing campaign that successfully rebranded .CO as a globally oriented Top Level Domain. The .CO registry was later acquired by Neustar who inherited some great talent, like Lori Anne, along with a profitable TLD. Like Paul Stahura above, Lori Anne is a firm believer in a bright future for new TLDs.  

Lori Anne Wardi
VP, Registry Services, Neustar

In 2015 we saw new Top-Level Domains truly establish themselves as a legitimate and growing industry force. The results of the recent auction at NamesCon are a testament to this fact.   

My prediction is that 2016 will be the year of the .brands. Our team is seeing major .brand applicants mobilizing their resources in preparation to launch their TLD assets in alignment with their broader digital marketing strategies.  

While 2015 was dominated by new generic names, 2016 will be characterized by the launch of major .brand players. I predict we’ll see them start to leverage their new TLDs as a point of differentiation across their consumer channels and this will result in a rise in new TLD awareness, as consumers start interacting with these companies through .brand messaging in marketing and other customer focused communications.

The .brand digital pioneers that launched in 2015 – like Abbott, Sony and BNP Paribas – have made the business case and shown us that customers will embrace innovation and that they do indeed perform well in search. 

Given this, 2016 will be about the mainstream emergence of digital superbrands for those that seek to harness the power of this revolutionary digital asset. Take a look at www.nic.fox for just a taste of things to come.

David Warmuz
President, Trellian.com, parent company of Above.com

With so much talk about the impact of China of domain sales, developments in another key sector of the industry, domain monetization, have escaped a lot of people's notice. So we connected with a couple of the key players in the space for comments on a service that large portfolio owners still rely on for a steady revenue stream. David Warmuz is the President at Trellian.com, the parent company of popular domain monetization service Above.com

David Warmuz
President, Trellian.com (Above.com)

I’d like to spend a moment talking about the ongoing trend involving the consolidation of parking companies and registrars. As these mergers and consolidations continue, domain portfolio owners are left with fewer service provider options. The ultimate question is whether the larger, consolidated companies can provide the level of service and innovation normally associated with smaller companies.

For the parking companies, registrars and brokerages in the domain industry, the challenge is to find a way to differentiate themselves from one another in order to attract and retain clients. As our industry matures and as consolidations continue in 2016 and beyond, domain investors are likely to look at these services as commodities, with price acting as the primary differentiator. From the service provider’s perspective, competing on price is not a good long-term business model. So their challenge is to innovate in order to differentiate.

For domain investors, the heavy focus in 2016 will continue to be on selling and flipping. So their challenge is finding ways to reduce the 

amount of time spent managing other tasks such as the monetization and renewal decision-making processes for their domains. The trick is to reduce the time and effort on these tasks, but not at the expense of lost revenue or higher costs.

This domain investor challenge represents a big opportunity for us at Above.com. Our free monetization, registrar and marketplace tools and services not only help domain investors save time managing a wide range of tasks, but they also deliver increases in revenue and a variety of ways to save on costs. As a result, we’re in the perfect position to enable domain investors to focus more and more on buying and selling, without needing to worry about lost revenue and increasing costs. We’re the complete, simplified, high-performance solution for their monetization, registrar and marketplace needs.

Ash Rahimi
CEO, RookMedia

RookMedia CEO Ash Rahimi is a major player in the domain monetization space. After tenures at Sedo and NameDrive, Ash has helped grow RookMedia into a top tier name in this sector. Rook's acquisitions include DomainSponsor, a company that was a key pioneer in the domain monetization business.

Ash Rahimi
CEO, RookMedia.net

In the parking world, the most significant trend in 2015 continued to be the rise of mobile. If I think back to even 3 years ago, both advertisers and ad networks did not know how to treat mobile. Are phones and tablets simply a smaller sized desktop screen that should get the same type of ads we’re all used to seeing? Or is it better to invest in creating a unique experience on these new devices? You’d routinely click on a Google ad on your phone and be led to a horribly misshapen and formatted website. That, of course, led to big conversion issues for advertisers.

As 2015 progressed, we saw great efforts both on the advertiser and ad network sides to create unique, useful and well-converting experiences for users. That in turn led to more advertisers raising their bids in the mobile space and ultimately to higher CPCs. We still have a ways to go before we see desktop and mobile CPC parity, but we’re getting closer every quarter. 

From an industry perspective, we saw an increased focus on domain sales as a pretty dominant theme in 2015. At Rook, we’re still more in “buy" mode, as we continue believe 

that (especially mobile) traffic is still undervalued, and that better days are on the horizon for domain monetization. With all the great platforms out there, it’s never been easier to sell at scale, and I think we’ll see bigger sales in 2016. 

Mobile will continue to be a focus in 2016 for both domain parking and also the online advertising space in general. While the share of mobile vs. desktop continues to shift steadily in mobile’s favor in more developed countries, we see that developing countries that are rapidly expanding their online usage rate already tilt heavily towards mobile from the beginning.

The onus will really be on advertisers to ensure that they deliver an engaging mobile experience that leverages the unique properties of phones. Google has done a great job with investing in advertiser education, and these days most ads we see are mobile responsive. On the monetization side we’ll be seeing new and interesting ad formats that will increase user engagement. Especially when looking at how traditional search has struggled to figure out mobile these past couple of years, I feel very confident in the domain channel’s readiness to handle the mobile shift well. The flexibility we have in delivering what is essentially a full page online advertisement allows us to work with any advertiser or ad network. Domains have always been kind of a Swiss Army Knife when it comes to online advertising, and that will continue to our benefit in 2016.

Deepak Daftari

China has had such an enormous impact on the domain industry this year that we wondered if some other "sleeping giant" might soon awake and create another huge updraft for domain owners. The most likely candidate would appear to be India and we got a first hand look at the rapid growth happening there when we went to Bangalore last August to cover the 2nd annual DomainX conference. Many in India regard eSiksha.com CEO Deepak Daftari as the "father" of the country's domain investment industry so, with an eye on the future, we couldn't think of anyone better to close this year's State of the Industry report. He gave us his take on China, then a forecast for the domain business in his country.

Deepak Daftari
CEO, eSiksha.com


The single biggest trend that affected almost everyone in the domaining industry would be the rise of the Chinese domain Investor and the rise in prices of domains with the least preferred characters. Overnight domains considered a liability and burden on the domain portfolio, by the western investment philosophy, were investor’s gold. The theory of least wanted and most wanted characters was turned on its head and domainers went scouring theirs and others portfolios for these kinds of names. 

Chinese Premium Names (also known as chips), other short domain names like 2N / 3N / 4N / 5N.com’s, LL / LLL / LLLL.com’s, One word Generic .com’s, LL / LLL / LLLL.net’s, .CC names, .Top names, .Wang names and many other TLDs and categories of domains went up in prices and out of the reach of a new domainer staring today.

Some domainers who had not anticipated such a meteoric rise in prices of such domains, sold them early on and too cheap while those who had the foresight to hold on to them were well rewarded. But it was not a one way ride, with its ups and downs and some investors even lost money trying to ride the wave without knowing when to get off.

Following the dizzy heights reached by certain categories of names, domainers are now speculating whether the ride will continue in the Chinese Market or if a blood bath in the secondary market is imminent. There has been so much speculation in the market in such a short period of time that domainers have been coming up with multiple theories for the times to come. In my personal opinion the ride is going to continue for some more time before we see any major downside on some of the domain asset classes. 

Among the other side of domaining I expect to see a lot of consolidation happening by way of some of the bigger players buying out smaller portfolios, consolidation in the new gTLD space, parking income remaining static or go down a bit more for the average domainer, more consolidation in the brokerage space and rise of the Chinese and Indian domaining industry.  

In my opinion, the Indian domain industry will see one of its biggest rises in the next 2-3 years and people who will have missed the boat will be caught surprised. The rise in the spending power of the middle class means more money in the hands of the common man and more avenues to invest and park this money. Its just a matter of time that the common man and the bigger industry players start realizing the value of the good domain name and start paying market prices for such domains. Just as it happened in the case of Chinese domain names, those companies and gTLD operators neglecting this rising category of spenders will be surprised in a few years time and sorry for the missed opportunity.

With more and more conference happening in Europe and Asia like DomainX, DomainFest Hong Kong, Domaining Europe etc, the

India image from Bigstock

awareness of domaining as a viable and sustainable revenue stream is gaining ground and attracting more young talent to explore and try to gain a foothold.  

Players like GoDaddy and Verisign who noticed this trend early on and started focusing on these markets are already reaping the rewards and others are watching very closely before deciding on their entry strategy for these two markets.


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