Have domain prices really dropped that much! There’s certainly opportunity, but where?
As I skim through the forums I see quite a lot of threads from people new to this business titled: I have $10,000 to spend on domains – what should I invest in now?
Of course there is lots of advice thrown around (quite a lot of it is very good), “LLL.com’s are cheap now, only invest in one word premiums, .Net is the way to go.”
But if I’m going to be honest I’d say now isn’t the time to load up on names. Whilst the economic barbarians are at the gates I’d spend the next two months learning everything I could about this industry. Read the forums, read Namecake.com, and look at the blogs of people who have actually made a success in this business. Then once you have a good understanding of the different categories and pitfalls to make your strike.
Still, these troubling times have unearthed quite a few gems, and if one of these does come your way then certainly snap it up. It may be a good idea to think of yourself as a sniper, who picks off select prey. Sure it may take a lot longer to build up your portfolio, but at the end of the day you will have a much stronger group of names and the potential for greater profit.
I do think there will be better buying opportunities around June next year, but if you have to start buying there are some areas I think safer than others:
Hand Registrations – Avoid. If you have to do this, do a maximum of twenty in upcoming industries, trends, new technology, TV shows (these are your long term punts – don’t expect them to come off, but you never know!)
But DO NOT go and register hundreds of names, as this will bleed you dry and it’s unlikely it will make you a penny.
Generic dot coms (one, two, three word) – at the present time these names still are pretty expensive. I’ve been looking for bargains, but the few I’ve seen have been snapped up by more hawk eyed individuals than me. Still if you can find something then this is a good place to start.
LLLL.com’s – I’ve got mixed views here. Letters that are brandable or have meaning: Tine.com, Wodo.com, Joof.com, in my eyes are good solid investments. But at the other end of the scale you have the speculative combinations that were registered during the landrush: hjdy, jsrf, xwqs, etc…. I can’t see names like these being worth anything at any time so avoid anything but quality.
LLL.com’s – I think the saying, “never try and catch a falling knife” applies here.
Values have been falling through the floor and although I think we’re nearing a bottom I wouldn’t like to start buying just yet.
Hyphenateds – Well I’ve always been a fan of hyphenated names. They’re cheap in comparison to their non hyphenated brethren, but if you are to buy only buy quality: Solar-Energy.com, Teddy-Bears.com, etc…
Geographicals – I would avoid. I really think these are going to run into some trouble. I don’t mean the Premiums like: NewYork.com, London.com, ParisVacations.com, etc… But one of lesser quality focusing on a certain niche in a region, such as: ChicagoPlumbersDirectory.com, DenverAttorney.com, etc…
.Net, .Org, .Info, .Biz – Premium names here will still continue to pay. Most domainers are obsessed with the dot coms, but I’ve made some very good money in these areas and I think there will be a lot of opportunity in this area during the flight to quality (.com). So this is where I’m going to have my eyes peeled.
Anyway, I realise there are quite a few other categories, but I think this pretty much covers where I stand on the opportunities out there.
Remember, before you buy anything, make sure you do ample research. How much research would you do before buying a stock? You look at the industry, sector and regional fundamentals. Then you look at the companies balance sheet, their management and a host of other factors before making your decision. Buying a domain should also involve the same level of due diligence.
If you disagree with anything I’ve said or have any other views I’d very much like to hear them.
James
Hi James,
Nice post, some differing opinions tho:
-Any LLL.com will be worth a minimum of $5k in 2009. If you can buy one for less, do it.
-Believe it or not, .ORG’s will be second in command of the TLDs in 2009. Forget .NET unless you’re using it to host your nameservers. If you want to know WHY .orgs will be the Queen to the .COM King (I don’t mean Rick S), email me.
-any LLLL.com or LLLLL.com that can be pronounced (as in spoken out loud and understood for its spelling), regardless if it makes sense [non-dictionary], will be worth minimum $5k - $100k in 2009).
Hope this helps! Thanks for your great interview on Craig Rowe of WhyPark.com, one of the greatest minds in the domain industry today. If he wasn’t, I wouldn’t be working for him!
Stephen Douglas
http://www.successclick.com
I kind of disagree on the first one;
take for instance Rick Latona, I read somewhere that he says 75%+ of his portfolio are hand registrations.
and assuming your hand reg. domains are relatively good, it’s much easier to make a profit if you plan on selling.
It also depends on what you intend to do with the names. If you develop all your aquired names I woud go for the generic ones, if pure domain investment LLL and quality LLLL would be better in my oppionion. By the way, you are actually the first I have seen advising against geo domains.. I don’t know much about it, but it seems most domainers do praise geo domains.
Lawrence,
Rick Latona can ‘do’ hand registrations because he has the money, and knows EXACTLY what he is doing. 99% of people do not. I am a seasoned domainer, and I couldnt make any reasonable amount of money on hand regs.
good writeup on current opportunities but what about ccTLDs?
Do you think there is any opportunities there?
thanks
oyster.
Hand reg names are only good for people who know what they are doing.
I think strong geo names are a good investment but big names like newyork.com dont come cheap.
Im brokering five country.com names just now that are well priced for the current market but apart from that you dont see many cheap country / city.com domains.
There are opportunities still to pick up good names cheap you just need to do your homework.
Dont jump into or you will get burned.
Regards,
Robbie
Like it was said by Lawrence, i believe that hand reg is still an excellent way of getting good names, the point is always you knowing what you’re doing, but that being said i also see a lot of crap being sold in the aftermarket for huge amounts of money. I know that the value of a domain is a very relative thing, it all depends on the buyer, always on the buyer, but truth be said there’s junk everywhere, and good domains can still be found unregistered.
I don’t find most LLLL’s of any worth, they’re not generic, they’re not brandable (most of them), some domainers think their valuable because of shortness, but that’s also a misconception in my opinion, i believe that a business owner will always value more the right keywords, even if it’s a longer domain (not too long) than a bunch of non sense letters.
About the rest i agree, good generic domains will always sell in any extension.
I’m also a big believer in ccTLD’s, there are thousands of millions of businesses all over the world, the big majority of them are local, and by local i’m talking about a town or a small district, most of them aren’t even national, only a small percentage is global, so it will make more sense to these businesses to own ccTLD’s instead of COM’s or any other global extension.
Thanks everyone for your comments.
Stephen, you could be right about the LLL.coms – but I personally want to sit on the sidelines. The general economy has a lot of pain to soak up and I expect most segments to fall further. I hope you’re right about the LLLL.coms as I’ve got a few.
I’ll send you an e-mail later about .org and .net
As to ccTLDs – I really know very little about that segment of the market, but there have been some very nice sales of late. I may buy a few .co.uk’s if I see prices coming down from here, but we’ll have to wait and see.
Now don’t get me wrong about reg fee names – I still do a few myself every now and again, but as a % of your portfolio how many do you really sell. For me it’s not many. I prefer to invest in something I’ve got a pretty good estimate of it’s worth and be able to raise cash quickly if need be.
Thanks,
James
Handreg?? Guys, perhaps 15 years ago… but now… nahp
You are forgetting something here, admin. With the opening of generic TLD’s by ICANN soon, some good .com domains may loose value. Yes, .com would reign supreme for years to come, but it will be foolhardy not to snap up a brandable gTLD in favor of a .com domain name. Believe it or not, the fall of .com would be a big burst indeed.
Domain prices have dropped right across the board.
and thats great news to me. The exchange rate actually makes the price higher than i bought them for. go the stock market crash,,
I think i purchased and resold a bit over 1000 domains this year so im pretty up to speed with it. A lot of people are holding onto there cash at the moment. However, there are some amazing bargains to be had if your a mad collector. .
Geographical, domains ROCK too. one i just reged, by hand no less, has amounted to a 1000% ROI (return on investment) this week,,, and still going up.
have a great day
Phillip
Hi Everybody,
I am a new domainer - active since only a year in this field, but watching since long. All of my domains (50+ at the moment) are hand-reg and most are generic .COMs. Here’s a few:
GISri.com
eResize.com
Access97.com
LinkCite.com
NameIssue.com
AccessMdb.com
BlogEasily.com
EntryCredit.com
AccessPersonal.com
TimeshareConsumers.com
What’s your take on these, dear veterans?
Sri.
Regarding the handreg issue, Rick L has been doing this for years and knows where he is going. Where as someone who is very new to domaining (I’m fairly new) will get thereself in trouble if they dont know where they are going and get caught up as james says regging hundreds of rubbish. Then realising they have to pay for the renewals.
Be specific be selective and do your research. Think there is still some good to be picked up in New tech etc, but it a long term investment. Will let you know if I’m right in 3-4 years time….
“Geographicals – I would avoid. I really think these are going to run into some trouble.”
Legal trouble, or just lose value?
My most profitable domain is hand-regged, four word, hyphenated dot net so sometimes the rules just gotta be broken. Then again the rest of my portfolio sucks so being the best doesnt really mean much
You have nailed it with the 3 letter coms - they are definitely in a massive downtown, but the impact as it turns out is still not as bad as the dow. I think that for years to come 3 letter coms will retain and surpass value. If you consider that half of all available are never going to be for sale (app, oil, rat, etc), and there’s only so many left - the rush will come soon enough.
Opinions are like ***holes, everybody has one, so here’s mine. Unless you develop your domains, it will ultimately be the end-user that determines whats next for domain names. Trends of the past imo mean nothing. If end-users start thinking “Hey the price of this .com is 100X or 1000X the price of the same name in .info or .me, why not develop a .me”, then the .me is going to be the next tld to buy.
Growth rates in online sales have dropped to their lowest point in history, just 5% growth in September. When companies see their online revenue flatten, they will not spend big money for a .com over another extension for a 100X or 1000X premium. For now SEO and marketing can overcome a lesser known extension. Also, other countries dont view .com the way we do. These markets will jump on a good cctld over a .com any day especially if they are a non-global company.
Just my 2 cents.
I agree with Stephen’s first post. Pronounceable LLLL.com domain names will sky rocket. I have had more sales… more frequency of offers on CVCV.com and vcvc.com’s then I ever did on LLL.com domains. My biggest sale this year, even in today’s economy, was a pronounceable LLLL.com. the other thing I wanted to add and disagree with you James is that hand registration will never die. I am all about hand regges since 2002. I do agree though that you have to be particular keen on your choices. I hand reg about 2-5 domain names per week and that’s usually after hours of research.One example of success in this area was MoreFinancialAid.com, out of curiosity I posted it for appraisal on the larger forums and most said reg fee because it was 3 words… well, the largest private lender contacted and it became a big sale. In any event… great site and a very good and thought out informative post!
James Jean
p.s
You are dead on the money with .org domains. I love them better then .net.
Domain Marvelous – I’m still unsure of the effect the vanity extensions will have on the market. I’m sure they will slightly dilute prices, but I’m very doubtful they will gain traction. Still we’ll know a lot more in a few years time.
Simon, you make a great point on hand regs, “be specific and selective” – I think this is the only way to succeed as my earlier hand regging efforts didn’t bring in much coin and there were a few good ones there (in my opinion.)
Bob – ha ha, nice opening – and you make some very good points.
James – don’t get me wrong about LLLL.com names – I like the pronouncable and good quality CVCV.com names, what I would avoid is the lower end of the market.
Stephen Douglas - I would be very interested to hear your reasons for claiming .org will trump .net in 2009 - esp. given that .org has but a small fraction of the global internet traffic that .net currently commands. Would email you but there is no contact link on your site.
I kinda disagree. .Com domains are always worth as long as they are short and pronouncable. Next comes .net followed by .org. .org mostly has the impression that it is Not for Profit.