Morning Folks,
We are getting deep into 2009 and how we built our business are going to be
judged. Many domainers, sponsors and others are falling out of the picture.
There is some serious stuff going on and depending on the model you built this
is when your report card becomes important. Will there be devastation in the
domain business? In a word....Yes. Flawed models are going to collapse. The weight of registrations combined with a lower payouts will be a crisis for some.
How many? I don't know. I don't know the financial condition or obligations of
each domainer. But some are gonna be in deep sh*t. They won't be making any announcements.
judged. Many domainers, sponsors and others are falling out of the picture.
There is some serious stuff going on and depending on the model you built this
is when your report card becomes important. Will there be devastation in the
domain business? In a word....Yes. Flawed models are going to collapse. The weight of registrations combined with a lower payouts will be a crisis for some.
How many? I don't know. I don't know the financial condition or obligations of
each domainer. But some are gonna be in deep sh*t. They won't be making any announcements.
You may notice the chatter is a little less than normal. This all is linked
as many are forced to spend time looking for new solutions. Overhead for many
is critical now and as we move down this
path.
as many are forced to spend time looking for new solutions. Overhead for many
is critical now and as we move down this
path.
One of the things I do in life is ask as many
people as I meet how things are out there with their business whatever that
business is. This is no test, business is bad out there and will most likely get
worse. A few months ago I was bold enough to suggest that 'Your favorite
restaurant will go out of business.' So it is several months since I said that.
So how are things in your community? Are things improving or still declining? I
would imagine decline is still in the air with unemployment continuing to rise
and likely hit 10% before the end of the year. Probably eclipse that mark.
Places like Detroit are already in excess of 20%. Many are concerned about the
summer. As temperatures rise so might the anger level.
people as I meet how things are out there with their business whatever that
business is. This is no test, business is bad out there and will most likely get
worse. A few months ago I was bold enough to suggest that 'Your favorite
restaurant will go out of business.' So it is several months since I said that.
So how are things in your community? Are things improving or still declining? I
would imagine decline is still in the air with unemployment continuing to rise
and likely hit 10% before the end of the year. Probably eclipse that mark.
Places like Detroit are already in excess of 20%. Many are concerned about the
summer. As temperatures rise so might the anger level.
Sure, you may see folks out and about but that
means nothing. I mean nothing. Here is proof. Just look at the behavior of folks
the days leading to any major hurricane. They act like all is well until their
lives and property are in direct peril.. So don't look to what people are doing
to believe one way or another. The NUMBERS paint the picture on this story and
those numbers are something that everyone should fear.
means nothing. I mean nothing. Here is proof. Just look at the behavior of folks
the days leading to any major hurricane. They act like all is well until their
lives and property are in direct peril.. So don't look to what people are doing
to believe one way or another. The NUMBERS paint the picture on this story and
those numbers are something that everyone should fear.
I would imagine most domainers now realize
they are not immune from this deep recession. As newspapers close down local
businesses still have to advertise to draw traffic. It will take them quite a
while to get their 'Sea Legs' and learn how to spend online effectively. But
that day will come as their choices diminish. Overall ad spending is falling off
a cliff.
they are not immune from this deep recession. As newspapers close down local
businesses still have to advertise to draw traffic. It will take them quite a
while to get their 'Sea Legs' and learn how to spend online effectively. But
that day will come as their choices diminish. Overall ad spending is falling off
a cliff.
But this ain't my first rodeo. This is the
third Internet collapse as far as payouts have gone and each time, not only did
it recover, it hit new highs. We are part of a 'Market.' That market is in
trouble. Just look at the TV ads. They are for soap and pitch men like Billy
Maze. They buy all unsold ad slots at a fraction of the going rate. Once those
slots begin to fill up and have demand again, prices will go up and payouts
along with it. So the next obvious question is when does that happen? Well,
unfortunately not until late summer and fall when the ad cycle really begins.
But even then is no guarantee. Look at all the folks that went out of business
like Circuit City that will not only never advertise again but puts Best Buy in
a position where they don't need to advertise as much. So there are going to be
some long term lingering effects of all this. Then add in others that have fallen
or will fall and you can see a scenario where it could be years to correct
itself.
third Internet collapse as far as payouts have gone and each time, not only did
it recover, it hit new highs. We are part of a 'Market.' That market is in
trouble. Just look at the TV ads. They are for soap and pitch men like Billy
Maze. They buy all unsold ad slots at a fraction of the going rate. Once those
slots begin to fill up and have demand again, prices will go up and payouts
along with it. So the next obvious question is when does that happen? Well,
unfortunately not until late summer and fall when the ad cycle really begins.
But even then is no guarantee. Look at all the folks that went out of business
like Circuit City that will not only never advertise again but puts Best Buy in
a position where they don't need to advertise as much. So there are going to be
some long term lingering effects of all this. Then add in others that have fallen
or will fall and you can see a scenario where it could be years to correct
itself.
We are going to go thru a happy period but I would warn you it will be
short lived. My gut says this fall could be dire once again. Many businesses are
about to go out of business. April 15th and then what could be a long hot summer
for some sectors could derail any recovery that could even happen.
short lived. My gut says this fall could be dire once again. Many businesses are
about to go out of business. April 15th and then what could be a long hot summer
for some sectors could derail any recovery that could even happen.
Speaking of recovery, don't count on it. The way this all plays out is we are going to see something that will take years to
manifest. But when it does, it will make this look like the good ole days! The numbers guarantee total economic collapse. Guaranteed! so the solution for this
is inflation. Wild inflation. WI would imagine we are 2 years away from that
event.
manifest. But when it does, it will make this look like the good ole days! The numbers guarantee total economic collapse. Guaranteed! so the solution for this
is inflation. Wild inflation. WI would imagine we are 2 years away from that
event.
First you have a glut of inventory and folks
cut prices. We are about out of that stage. Then we have supply but the prices
go up because inventory is low. Then we have a new wave of buying and the
wholesale prices will likely rise by 25%-50% as staffs are leaner. Raw material
becomes harder to get if at all. etc. etc. etc. So we are going to see a host of
bad things happen caused by one collapse or another.
Let me explain something about my series
of posts on the economy. I view it as walking the tightrope or
navigating a dangerous jungle. On one side is great peril. On the other
side is unbelievable opportunity. The delicate navigation thru these
times is essential. So I started writing about this meltdown when every
domainer believed they were immune from the overall economic conditions
we see. Now that does not mean you can't have a record year. Many are.
Many are also flirting with disaster and I suggest you brace yourself.
I also beleive we are going to see a colossal deal. The biggest in the
domain sector ever. I believe this will stun almost everyone reading
this. Earth shaking. What do I know? Nothing! Everything. I have
watched this play before. Characters are different but the story is the
same. So you can point to THIS post when this one hits. Not a domain
deal. A mega deal that could change the face of the entire industry.
cut prices. We are about out of that stage. Then we have supply but the prices
go up because inventory is low. Then we have a new wave of buying and the
wholesale prices will likely rise by 25%-50% as staffs are leaner. Raw material
becomes harder to get if at all. etc. etc. etc. So we are going to see a host of
bad things happen caused by one collapse or another.
Let me explain something about my series
of posts on the economy. I view it as walking the tightrope or
navigating a dangerous jungle. On one side is great peril. On the other
side is unbelievable opportunity. The delicate navigation thru these
times is essential. So I started writing about this meltdown when every
domainer believed they were immune from the overall economic conditions
we see. Now that does not mean you can't have a record year. Many are.
Many are also flirting with disaster and I suggest you brace yourself.
I also beleive we are going to see a colossal deal. The biggest in the
domain sector ever. I believe this will stun almost everyone reading
this. Earth shaking. What do I know? Nothing! Everything. I have
watched this play before. Characters are different but the story is the
same. So you can point to THIS post when this one hits. Not a domain
deal. A mega deal that could change the face of the entire industry.
This really is no test. 8.5 unemployment in March when they predicted no worse than 8.2% just 4 months ago and that was not to be until years' end. These accelerating
numbers are going to spell disaster. Don't be in denial.
Nobody is immune on this one. There is no certainty or safety in any sector. The only way to survive and thrive is to stay ahead of events. I started writing
about this over a year ago. Nobody believed it then. Nobody should doubt it
now.
numbers are going to spell disaster. Don't be in denial.
Nobody is immune on this one. There is no certainty or safety in any sector. The only way to survive and thrive is to stay ahead of events. I started writing
about this over a year ago. Nobody believed it then. Nobody should doubt it
now.
So if your earnings are going down this is the
time to be aggressive. There is great opportunity out there. Many folks are
timid. Others are scared to death. Others are one step ahead of total collapse.
All I can suggest is parlay what you know and get a fresh approach without
abandoning what is tried and true.
time to be aggressive. There is great opportunity out there. Many folks are
timid. Others are scared to death. Others are one step ahead of total collapse.
All I can suggest is parlay what you know and get a fresh approach without
abandoning what is tried and true.
Enjoy the up market. There are fortunes to be
made. But I doubt we have tested the lows. The psyche of folks has been changed
and a change like that does not change back overnight. There is just too much
more fallout yet to deal with to believe it is over. 8.5% unemployment is a
really big number. It is also accelerating. When we get to 10% later this year I
am not sure how that will translate into things getting better. In my pea brain
I believe we will just BEGIN entering the storm in the fall. But hey,I hope I am
wrong. But don't bet against me, most don't win even when the odds are high. Besides, the so-called experts always are 'Surprised' when their predictions are off. Sorry, but you can't be an 'Expert' and be surprised by anything to that degree. Experts are paid NOT to be surprised.
made. But I doubt we have tested the lows. The psyche of folks has been changed
and a change like that does not change back overnight. There is just too much
more fallout yet to deal with to believe it is over. 8.5% unemployment is a
really big number. It is also accelerating. When we get to 10% later this year I
am not sure how that will translate into things getting better. In my pea brain
I believe we will just BEGIN entering the storm in the fall. But hey,I hope I am
wrong. But don't bet against me, most don't win even when the odds are high. Besides, the so-called experts always are 'Surprised' when their predictions are off. Sorry, but you can't be an 'Expert' and be surprised by anything to that degree. Experts are paid NOT to be surprised.
Have a GREAT Day!
Rick Schwartz
Rob Sequin
Always a great read.
I live on Cape Cod in Massachusetts. There was a HUGE building boom here but it was mostly a second home market and many buyers paid with some or all cash. So, things of course have slowed down but I hear of many forclosures or dead subdivisions like you hear about in other parts of the country.
Restaurants seem full but the mall is noticeably empty with several stores closed. That is strange. I get the sense that people are frugal now but not desperate.
So, I’d say the economy is”soft” here on the Cape but not dire. They just started a huge renovation on the house next to us so that’s a good sign.
Regarding the domain business, I am having a great year on several levels… consulting, buyer brokering and sales of my domains.
I’ve taken on some domains for sellers but haven’t sold a single one. All quiet on the sales brokering front. That I notice is WAY off… for me anyway.
So, I guess it matters where you live and what you do.
However, I do have that disaster scenario in the back of my mind and I wonder if we are now entering our last bubble… the government funded bubble.
We had the VC funded tech bubble. Then we had the banker funded real estate bubble. Then we had the Wall Street funded credit bubble.
Now, with all this spending and stimulus money, I’m worried that we might be entering the Government bubble.
I guess I should call it the taxpayer funded bubble since we will be the ones paying the bills.
Rob Sequin
Sorry…
“but I hear of many forclosures”
should be”I DON’T hear of many forclosures”
Perchboy
Another great post, Rick.
I’m impressed that rather than take the ‘safe’ route and simply sit on the sidelines with your successes, you continue to call things as you see them. This gives many of us a wholly different take on events than what the masses usually get.
The fact that you’re willing to go on the record, even with the caveat that you may not always be 100% correct, is impressive. And whether you’re ultimately proven totally right or wrong is not even that important, as I believe Stephen Douglas may have once mentioned, for at least you generate a lot of great conversation and a different way to look at events.
Unless one is a prophet, the future is unknowable. However, as Santayana said, ‘Those who forget history are doomed to repeat it.’
Perchboy
Dr. Mindwrecker
Your the man Rick, thank you for taking the time to write in your blog. You help a lot of people big time with your thoughts.
Kevin
Despite a challenging economy, the worlds GDP will still be over $60 Trillion in 2009.
I think everyone gets too wrapped up about the doom and gloom and aren’t looking at the big picture.
If we can’t make money within a $60 TRILLION economy we all suck as Entrepreneurs, and I don’t think we do suck.
The solution is don’t limit your business strategies to just the US. Think of yourself as a businessman of the WORLD!
Go global and make money everywhere you can on the planet. The Internet enables that opportunity magnificently.
So everyone needs to quit focusing on the craziness and just keep diligent on your business, work as hard as you can to find GLOBAL opportunities and create lots of business ventures for yourself.
Altaf
Nice!!:)
Let’s hope and pray for the forecast Rick. Good Luck for the coming TRAFFIC.
The title of http://www.targetedtraffic.com needs some optimization.
What’s your forecast for the ccTLDs in local/intl market?
Regds,