Is it just me or does the whole “domaining” industry – if i can call it that – nowadays just sounds like one giant infomercial.
Couple that with the new crop of domaining observers and journos (whilst struggling to keep up with all the excitement) labelling every event or piece of news with headlines such as “You will remember this day”, “Its a landmark day in the life of domaining”, “Never has there been bigger news than this”, “Stand up and take notice of this news, you will thank me in 5 years, just like I said 5 years ago” yadda yadda – when all they have to say is simply a repeat of last weeks news at best and when they only have something akin to the boy who cried wolf. The only difference being that, nowadays in domaining, the wolf never actually shows up.
I think David Carter’s piece (Ooer Missus) about lease/lease purchasing of a particular domain name is well written and is something Ive also been thinking about myself for some time. Our company was recently offered a really nice prime generic .com name by another large UK Media company and they wanted to lease this particular name to us for ~£20k/mnth (numbers slightly changed to protect the guilty). Although irrelevant in some respects, they know that we know that they only paid £20k for the name in the 1st place. And yet here they were wanting £20k per month to simply lease the name from them. And whilst the merits of which are probably a separate discussion in themselves, it does make you wonder where these valuations are coming from and why people think that something they bought 2 years ago has subsequent made an appreciative value that hasnt been seen since Frank Logan bought up a small plot at Dukes Creek simply because he liked the waterfall. Perhaps domaining too once had this charm. I know myself that many a nice exotic holiday has been paid for by something that originally cost me just six bucks – but like anything, over the past at least 2 years or so, I appreciate now that this is no more.
The traffic on the domain we were offered was negligible and so what begged the question to me was, why? As in, why is owning a super generic single word dot com of any use to anyone anymore at those prices – unless there is tangible type-in traffic that can be quantified against the revenue or traffic it generates? The problem is is that domain names no longer have the mystique that they once generated to those not in the know. As such, I think the fabulous prices domains once commanded are now a thing of the past. Simply because, where specifically does the value lie? Less people type in a domain name directly into an address bar, PPC rates for those that do are terrible at best (unless its a nice typosquat, ehem) and yet, in the domain channel, the value of generic domain names attempts to remain unsustainably high. I think that in a few years time, those guys who have been basing their retirement on the fact that they own a handful of domains that they value at in excess of millions of dollars each will begin to wonder when that magical offer is going to come in.
There is a slight silver lining to all my gloom (as many a shrewd domain investor knows), the only saving grace for domain names seems to be in the way Google hold websites with domains that are an exact match of a search term in such high regard. Provided of course there is an actual website behind it – “dag nammit” says ye common or garden domainer.
David talks about golfclubs.com and how this name is available at $35k a month, lease or lease purchase (I wasnt so sure which). Despite all the tabloid style journalism that seems to surround domaining, I dont think anyone will be leasing this name anyday soon and certainly not for this sort of money. In fact, how many raw domains are there actually out there that would command such a fee? I personally dont think there are that many. Perhaps whats more relevant, is that £20k/mnth is probably the wages of 4 or 5 members of staff.
The knock on effect is also yet to be felt. As in, if the best of the best are losing value, what happens to the millions of names out there, the plurals when the name should be singular, the hyphens, the exotic extensions and the names that make no sense whatsoever. Is it really worth investing in domain names at all anymore?
Havent blogged for a while but I thought this newsworthy enough to come out of my self imposed exile.