Morning Folks!!
The reason domain prices are down is not because of value, it is because of domainers with circumstance and mortgages to pay as well as fees that may be eating them up. So assets are being sold cheap to bridge the gap. How long will this last? That depends on domainers not the market. The market is strong. Domains are selling. But Domainers or many of them are now financially weak compared to where they were.
The big squeeze is on. A great time to buy great domains for a fraction of their current and eventual value. The biggest shift of domains since PPC came to market is currently going on. The bad news for PPC companies is that domainers start with their most trafficked domains to start new projects. And that is underway at full speed.
Read what I wrote in 2008 and 2010. I don't have to get it all right. I just have to predict the general direction and understand WHY so that I can benefit from it not be hurt by it by staying ahead. I share what I see. Is there a single domainer reading this today that believe PPC is their future? It is a great tool, but maybe I would compare it to sitting on an active run way. Imagine how those attitudes have shifted when the VC guys flew through the Industry with their FLAWED formula.
On the other side of the coin the first week of May produced the most domain unsolicited inquiries of any week in our history. Serious offers. So I expect we are in a very “Sweet spot” as far as new, large, ground breaking projects. Arrived on schedule and will only heat up as we go through the most aggressive working summer Corporate America has seen in decades.
Just remember one thing. Your asset is unique. It can not be replaced. Value comes from many areas and to this day, I would trust less than 10 people in the industry to put a true value on a domain name. And even they would have to be in a room to discuss all the aspects of the value.
Even if you are not making money today you can always start in a different direction and change things. It is amazing how much success you can find and opportunities you can seize if you look in different directions and see the world the way I do.
Have a GREAT Day!
Rick Schwartz
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Domain Lords
One word to explain why the crush is on to dump domains, GOOGLE, they no longer tolerate crap development. So ‘domainers’ who had minor traffic sites that had old page one serps, are now all holding way too many low traffic domains with no position on SE’s, so, tons of quality low traffic domains are dropping like the birds were in the beginning of the year.
95% of our new domains now come from rereg’s or drop auctions, since whole geo portfolio of nice solid low traffic high cpc terms were dropped by ‘domainers’ that never did any proper development.
So the guys with thousands of domains and no deep pockets to pay for them without selling are now dropping a ton of stuff.
The few selling anything, are dumping cheap too, like you said to pay reg fees and cost of living bills.
So the whole game changed when google basically said with it’s ‘tweak’, you want traffic from high value cpc terms, ok, here’s 7 spots on page one FIRST VIEW now, top 3 are high rotation ppc, two on right side UNDER THE BIG ASS MAP is part of high rotation ppc and the only organic, is now two maps and they are now usually connected to ppc budgets.
So where can a ‘domainer’ now get traffic from high valued ppc terms?
NO WHERE
Google killed off ‘local seo’, so now there is ZERO revenue for a ton of great domains.
The only way to get revenue on those terms now, develop them, and find a local professional user to hand high rotation ppc on them.
Then they go right to the top of google.
Now since you don’t really deal with high valued cpc terms, you are not really in ‘the loop’ as to what the big shakeup did months ago.
So ‘domainers’ that had some organic first view terms on high valued assets, they lost it all, revenue DRIED UP almost 100%
Sure, a guy with high traffic keywords that NO ONE PAYS MONEY FOR can still eek out some adsense revenue, but guys that had a free ride on high valued terms, GOOGLE SHUT OFF THE FREE RIDE
Now it’s develop, and even if you do, the domain has ZERO SHOT at first view, and that’s all that matters for most domains, if it isn’t first view NO ONE SEES IT AND NO ONE CLICKS
So golden terms like geo high-value-cpc-term that used to get some traffic from organic seo, are now usually not even on page one, since google killed off all the low end ‘seo work’ that was never really SEO WORK to begin with
So now it’s understanding the whole SEM game, that puts any value on a domain
What will a business pay 20, 40 or 60 and even 100+ a click for
Obtain those domains in the top TLD’s and then you have something to develop, and it has to include high rotation ppc, or the domain has NO VALUE
Anyway, a lot of late to come to the party ‘domainers’ made nice change for years on such geo centered cpc terms
It wasn’t your game really
So that’s the ‘shift’ I see
Google is no longer letting big buck cpc terms get free traffic
They want their piece, and they crushed a ton of portfolio’s with their tweak
Kevin
Good analysis Domain Lords.
From my observations over the years, there’s a very very small universe of domain portfolios with high quality type-in domains that don’t need or depend on Google for traffic and revenue generation. 99% of the other domain portfolios are filled with worthless crap.
mark
this is really what i thought 3 yrs ago..crap names in millions ,not developed .whole industry is pack of cards ready to fall.
google are right.
Bill Roy
Unfortunately many still do NOT treat this as a ‘Business’.
Many still see CPC and Google, et al, and think that is what the whole business is about. Many think a mini-site is development, many still think that chucking up a directory on a geo-site is development, it isn’t. Geo-domains more than any other have to be developed to start harvesting their potential. But more important than development is having a ‘business plan’ that is both relevent to visitors AND achievable as a development plan. As I say many domainers don’t even build a business plan let alone develop.
Rick I agree about names becoming available due to owners income retraints, some are being dropped whilst others are being sold for far less than they would have been just a year ago. Those that can hold-on and perhaps tighten their belts a little bit extra to make cash flow available for investments are likely to pick up many bargains at the moment. This is the time that those with true entrepreneurial spirit can take advantage of.
petrogold
Nice Feedback! If that means to buy high cpc names is it available from the auctions drops? or to buy with very dear p.Your view pls.
petrogold
Dear Rick, we think Domain Lords words make sense. Your comment on this perception will make readers more comfortable. gratefully,
Uzoma
There’re no crap names; what we have is crap Google. Too much faith was put in Google’s business model, meanwhile they’ve been busy devising a way to take the entire pie.
And they have.
If there will be a domain industry, we have to start now finding a way to separate Google from our domains, and our business model. Left as it is, this industry is history. Not even Sex.com as a domain is safe. It doesn’t matter how valuable your domains are, if an industry is dependent on ONE major player, get ready for disappointment after disappointment. I remember when Microsoft was considered the villain, I used to feel sorry for Google, Nescape, Oracle, and so on…. Today, the student-like company known as Google, has grown up with shark teeth! They have tremendous technology, aimed at rendering domains useless.
Keldon
@ Domain Lords……great analysis, however mini-site developers were never domainers, so I think that is mislabeling them.
Most REAL domainers never fell for that trick. We knew today’s result back then and did not spend six months cranking out 300 mini-sites. Consequently, most of us that did not go the mini-site route did much better b/c we focused on other areas.
I agree that we are shifting into a period of domainer domain drops, and even developer domain drops, since Google has made it clear that traffic will be harder to get from now on. Developing is a bitch, and with the tighter requirements and Google eating up the page with maps, directories, and ads now, many developers will fail and the domains will go back to the drops.
Great time for domainers if they have the money to acquire. I’ve been doing well. Many of my domains have a turnaround time of six months or less and the end users just contact me….I do nothing to get in touch with them. Domain sales are firming up and big offers are starting to show.
Keldon
Well put Uzoma.
jrb
I am in that boat, selling off some domains here and there to cover reg fees. Adsense is down and affiliate income is down. The squeeze IS on. Also, domain sales and inquiries are way down for me, don’t think I’ve had a serious enquiry yet about a domain in 2011. But you still see domains selling every week for good prices, I still think they are in demand but to get the best sales you need great names, or someone who really wants the specific name you have. Domaining for me is part time so while I have done some development, I don’t have LOTS of time to develop as I really should. What it will come to is pairing down my portfolio to a few hundred names I really want to keep, and finding a way to do some relevant development on some domains. All you really need to make good income is one domain, a good idea, and a good website – then repeat. Domainers see so much potential in domains they end up collecting a mass of them and waiting for the buyers. The last few years you could get by because with a little work the income covered reg fees and left something over. Now, the income is down so the pressure is on to get your domains working harder. It is an ever changing game and though challenging, that’s why I love it!
Jack
Google is currently in the process of shutting small and medium size web publishers out of it’s search results. When large corporations know that domains are useless to the little guy they will decrease their offers accordingly.
Google ate the affiliate pie. They’re gradually decreasing PPC payouts while their own profits break records. Last month they devalued domain keyword weight and will likely turn the knob down even further in the future. Every month they tilt their search results further and further in favor of corporate content providers and million dollar brands.
The next 5 – 10 years online will be brutal for domain owners and web development entrepreneurs. The corporate shut out of the web is coming folks and Google is leading the charge.
Poor Uncle
Like I said….when a guy like me getting into the domain game is like the taxi cab driver giving stock tips. It’s time to buckle up — we are going for a nice ride down hills.
BullShitwebsites
Like I said many times over and over- this domain game is just a BS word game.
The internet will kill civilization, there are so much junk out there that nobody trusts what is legit.
Who is going to buy something from your crappy websites?
You can have the best designed website but if no one is buying, your website is worthless.
Holo King
I had tons of mini sites making good money and things changed
online and I don’t care because being a true entrepreneur you
always come back with a new system until you’re back at the top again.
Where there is a will, there is always a way!!
Please listen to this song and BE STRONG :)
http://www.youtube.com/watch?v=Ceqvi8fnZOk
jrb
A domain has value beyond whatever happens with Google. Even Google is subject to being overtaken or out-competed one day by some other company that might not even exist now.
Domains still sell every week and people with quality portfolios like Rick, Frank, etc still get enquiries on their names every month.
There are more UDRP claims over domains than ever before, so domains are as important as ever. When Charlie Sheen went rogue and wanted to start a website, he went after CharlieSheen.com and paid up, even though he probably could have got it through a challenge. He saw the importance of owning that name and not something else.
Your domain doesn’t have to be on the first page of Google for your website to make money. There are billions of webpages out there and more coming every day, most have to get by without top Google ranking.
David
To JRB: Very well said.
Eric Borgos
I agree, I just sold my portfolio of 4000 adult domains (average age of the domains was 10 years old) last week for a very low price (see details at http://www.impulsecorp.com/my-9000-domains-part-2 ) because they were parked and for the past 2-3 years have been making significantly less than the annual registration fees. I am not in the adult business, and did not have the desire, energy, resources, and knowledge to develop all of them.
ASK
I have dropped a few older domain names and bought some new ones I thought had bigger potential to develop. It is a learning process.
Greg
The opening up of domain extensions to whatever companies want will mean domains like http://www.coke http://www.nike will be the most desirable and branded domains rather than the current http://www.coke.com etc.
As soon as that extends out to http://www.whatevernicheterm it will render .com domains basically useless (worth equivalent to .info is now)
Combined with social etc it basically means the knees will be totally kicked out from under the current domain real estate assets
UFO
Greg, I don’t think you understand branding. What you have said doesn’t happen in the real world so its almost certainly not going to happen in the virtual world. The likes of Nike etc etc are never going to have commerce sites on subdomains etc etc.
You need to realise that .com is a brand. Its a generic brand that has a bunch of factors that make it desirable to own. .com has critical mass, inbuilt sunk cost inertia and it will just roll on.
.com will only die when there is a whole technology change that is game changer. Live by the technology die by the technology.
Domain Lords
Since some are asking for me to expound on a few things, I will.
A. yes BUYERS market big time and
B. yes drops are all over the place so multiple places to feed on now
C. googles dominance, face it, google is a VERB, and in the high cpc category, it’s now using ‘keywords’ in a handful of tld’s that google respects, to get into high rotation and save some dough, some high cpc terms have 200+ professions trying to buy into it, they can’t, they go to google and the response is, yeah get IN LINE, everyone in your trade wants this, that’s why google redid the whole local search game, and that’s the ‘growth’ for google and development
So my experience is way different from ricks, apples and oranges really.
DK is 12 years ago, you get traffic domains and you make money off parking, or hold until a ‘buyer’ wants it.
Ok, nice for a few years, what has it done for you lately
I can take on a new professional client with literally a REG FEE domain today and hit high rotation ppc and probaby the map, end result, very little work and 2500 to 25K a month for doing what a 1M team of seo/sem/content gurus would do for a company
So, development to compliment first view ppc is the ‘real game’ today and yeah, it involves a handful of tlds with geo and or root level professional terms
So, that’s my ‘expertise’
Develop only for end users what they are willing to pay 25 to 150 bucks a click for
I show a professional a few serps, and all he sees is #1 map and high rotation ppc
Then I say call the guy/girl
Ask their response ratios (most are close to 50%)
End result
HOW MUCH
HOW FAST
Now, I doubt many here could really ‘compete’ with us
But, I’m a buyer all day for keywords for high cpc terms
So you got any, send me lists
I BUY, it’s a buyers market
And my model throws off huge cash revenue to us
CHA CHING
The whole thing is, keep in mind what do BUSINESSES pay big bucks for
Those are the gems I chase
And they don’t have to be .com to make money with
John Howard
I can’t believe the doom-and-gloom crap that I’m reading. Instead of panicking over Google PPC, why don’t people get off your fat arses and dig out end users. The real money now is in selling to the right end user, and that means research and lots of leg work, not pussyfooting around with landing pages and parked pages builting on shifting sands.
:-)
Greg
UFO, I guess time will tell!
It won’t take long either.
As soon as the big brands all start flashing around and using their”.them” then it’s going to become apparent it’s the best practice way.
People stuck on old school .com will be just like those still on MySpace or Friendster now .. true there’s lots of branding behind it.. but things on the internet change fast