Morning Folks!!
When you and I were born all the land was gone. Somebody owned every parcel every acre every nook and cranny. The Government owned the rest. Used or not it was owned.
I remember as a young boy of 5 or so standing on the corner near my house and wondering how I would be able to get something everyone already owned? To a kid, that was a scary thing.
Maybe you can relate? That feeling did not go away until I finally owned my first home when I was in my mid 30's. It was a struggle to get there. But was one of the most satisfying days of my life walking in that front door for the first time.
So, to me, domains are just real estate. Some domains are commercial real estate. Some are recreational real estate, some are income producing real estate, some are residential or even social real estate. A domain represents that piece of land but the access to that land is not from the immediate area, but the entire world. It has much greater value as I see things. The single domain name is the key to empires. Just think these companies worth hundreds of billions of dollars and approaching Trillion Dollar Valuations, mostly work out of ONE .com address.
The beauty of a great domain name is no matter how big you get, you can still use your original domain and be able to build something bigger and grander and taller than 100 Empire State Buildings! Than 1000 Empire State Buildings. THAT is the power of a domain name. A single domain name with a brilliant and profitable idea. There is no limit!
I'd venture to say that Amazon.com or Facebook.com or instagram.com are worth more than the Empire Stat building. Matter of fact dozens of Empire State Buildings. Maybe 1000's. Who woulda thunk it? So, in my mind and the way I think, domains have tremendous value yet to be discovered by Big business and those small businesses that want to be big. The door is open to all. The ONLY limit is our ideas.
When I was a kid I remember the hub-bub when the Empire State Building sold for a whopping and unbelievable $65 Million. But they bought the building. NOT THE LAND!
"1961: August 23, Lawrence A. Wien, Peter L. Malkin, and Harry B. Helmsley buy the building for $65 million. The price, which does not include the land, is the highest ever paid for a single building." http://www.esbnyc.c
No Land. The Domain is the land. How did that happen? Well you have to rewind to 1951 before we rewind again:
1951: The John J. Raskob estate sells the building for $34 million to a syndicate including Roger I. Stevens and the Chicago Crown family who immediately sell the building to Prudential Insurance Company of America for $17 million, which then enters into a long-term ground lease with the Stevens syndicate. http://www.esbnyc.c
Now the original parcel of land was bought for $2600 in 1799. But you can't look at how much value 200 years later. They are all dead 5x over. So I always took that into account with domain names and why they will outlive each and every one of us. The good news is the Internet has accelerated progress. However progress takes breaks every now and then. So you need to know the difference of a life cycle of something and something in hibernation and taking a break. Domains are still at the start of their life cycle. It's basically a teenager with little direction and lots of pent up energy. Maturity is coming and with maturity comes a deeper and better understanding. The Empire state building started as a farm.
If you are a domainer and you are not looking for real world comparisons, historical comparisons, then you might be lost in the woods. There are EXACT, PERFECTLY EXACT PARALLELS. Once you connect this parallels, you make a spark. Once you make a spark you have a source of energy. Once you have a source of energy, you have a way to make money
This is EXACTLY what I said in my previous post.
"When a person learns where East really is he/she can then figure out where West is. Where North is. Where South is. Where Northeast is. Where Southwest is and so on. From that ONE single answer, you get 100% of the info. Accurate info. It's a choice! You may not be able to control everything or be successful at everything but by understanding our own building blocks, we dramatically increase our chances."
Own a great domain name and you own a piece of Times Square AND the Empire State Building. And the single most incredible part. The revolving front door that you use to enter the Empire State building form 34th street, has a powerful new mechanism in that a domains revolving door enters from the entire universe.
Own something that means nothing to nobody and you have genuine legendary Florida Swamp Land. 80%+++ of the industry owns swampland by their own financial admissions! I have seen portfolios of 1000 parcels of pure swampland. It's the norm NOT the exception. Sad but true!.
What gives a gas station value is TRAFFIC. What gives the Empire State Building value was traffic. If no cars pass the station goes out of business. If that were not true, they would build gas stations and skyscrapers in the woods 1000 miles from civilization. What gives anything value is TRAFFIC. There is no traffic in the swamp nor is there the possibility of getting any.
You can't buy the Empire State Building for $2600 again. Or $65 Million, or even $1 Billion. Today the Empire State Building is a public stock that is traded and has a value in excess of $2 Billion. A GREAT address, a great property, a great location will always have rising values while swampland languishes at worthless now and forever. The raw land that a great domain name represents is always of value and capable of building a skyscraper! In the swamp. you can't even pitch a tent! When you KNOW the difference, you will have successfully calibrated your compass and see things in an entirely new light and a new "Pattern" will have emerged!
Have a GREAT Day!
Rick Schwartz
Mark Thorpe
Unfortunately there is still a disconnect between the value of .Com domains and the average person.
People still think they should not have to pay offline real estate prices, for online real estate.
GoDaddy and Huge Domains are not helping matters by selling .Com domains at discount prices.
GoDaddy’s unrealistic domain appraisal service is not helping either.
Also, domain names are still not on main street yet.
The average family is not sitting around the table talking about domains.
Most people still don’t know what a domain name is or that they can actually buy one! They only know websites, Social Media and Apps. Whatever is FREE!
I still think that the domain Industry needs a better marketing plan, to bring more awareness about domains.
GoDaddy helped, but it was not enough.
RaTHeaD
godaddy’s domain appraisal service is PERFECT. (for them) the center of their algorithm is around $1200. all domains are pulled toward that number. if the domain is worth $20 it will come up as $1149. if the domain is worth $5000 it will come up as $1949. it is a powerful force of gravity like the sun. therefore buyers are more likely to register crappy domains because they might be fooled into thinking they’ve found a beautiful undiscovered gem and sellers might lower their asking price or top notch domains because maybe they’re not as valuable as they thought. if godaddy would step up and offer to buy domains at 1% of their appraisal i could just sit here and handreg and make thousands of dollars a day. jmo/other opinions may differ.
Everdoll
Very true, but you can think of it as an opportunity. The AVERAGE person is not going to make millions. The fact that the AVERAGE user doesn’t see value means that domainers still have an opportunity to buy decent domains. Domainers still having a fighting chance because once the AVERAGE person sees value in a domain name, it’ll be TOO LATE. For example, by the time an AVERAGE person talks about a stock that’s booming, guess what, it’s already too late and too expensive to buy the stock and those that have cashed in on it have already dumped the stock.
If you have a good domain name, or a GREAT domain name, you wouldn’t even bother to sell it to the AVERAGE person because they wouldn’t be able to afford it anyway. The domain industry doesn’t need any marketing because it has already marketed itself. As Rick has mentioned, .com is the biggest franchise ever. It’s not that the domain industry has not marketed itself, it’s just that people haven’t paid close attention to it. A while ago, I told someone the name of a web project I was working on and she added a .com right after it. If that’s not marketing, I don’t know what it. At the end of the day, it’s about being ahead of the curve not in middle of it.
This post was well articulated common sense and Rick puts it in context and it’s great to have a giant in this industry who takes his time to give us his perspective. For FREE! The only cost to us is to have an open mind and be willing to listen. Thanks Rick!
Staff
When you KNOW the difference between Options and Opportunities :) Have a GREAT day too!
Lucas
“what I said in my previous post”
your previous post? I am still scratching my head to figure out what you tried to mean to be honest. I hate to admit… I guess I’ll keep reading over and over again until hopefully I will get it at some point. Anyway, great to see you posting again!! cheers
Tom S
Good to see you posting again Rick. I also scratch my head sometimes when I read a post you make like the one on East/West, but always enjoy hearing from you. You have a different approach to conveying an idea than most who post. Looking forward to more.
Rick Schwartz
I would study that example until it makes sense. My approach is different, my limited efforts are different and so are my results. My answers don’t come from domain names. They come from Business, sales, human nature and the history of business. Things repeat themselves in different forms at different times and for different periods. Everything we saw happened in another decade or century in another form or with a different group of products or industry. Make the connection and you reap the rewards in some fashion or another. If you figure out EAST on a compass can’t you figure out all other points on a compass? If you figure out something in business, you are sometimes able to do the same thing. Don’t you think that knowledge has value?
Like I told one of my stock brokers stuck in Corp America with Corp America thinking:
I told him: “You are looking at rooftops and objects not too distant in terms of distance or time or future. The markets are moving at 25% and more and they are stuck at 5% returns. I need an astronomer that can see the stars of the future.” Have not heard back from him since. My stocks doubled. His picks were the garden variety gains.
Sigma
“Just think these companies worth hundreds of billions of dollars and approaching Trillion Dollar Valuations, mostly work out of ONE .com address.” ~ Rick Schwartz
One day, Ivy-League Business Schools will archive/cite RicksBlog.com to explain how an army of individuals/domain speculators with no name recognition or corporate backing made millions on little digital assets called domain names; while Wall Street/Madison Avenue was focused elsewhere…
Anunt
Having a great domain name with traffic definitely helps but is not necessary. Today, you can hand register a swampland domain for $10 or so and have people visit your domain name from the entire universe thru social media marketing or any other advertising.
Instagram.com and Facebook.com are great examples of what once used to be swampland domain names and now worth billions.
Lots of swampland domains have become big multi-billion dollar brands.
It’s all about the idea, not necessarily the domain name!!!
Rick Schwartz
Absolutely about the idea. That goes without saying. Idea is key. But the name can make you or break you. Your location is important. Why would ANY domain investor minimize the importance of the name? Why would any businessman minimize the importance of any element of their business?
But the reason those names are not swampland is they have elements that are important to a domain name.
Ignorance
What are you talking about domain names are important for advertising. Try using a crappy domain name vs a good domain name and see how much more you would be paying for the same traffic with the crappy name.
Snoopy
Facebook.com isn’t swampland. Pretty sure they had to buy it on the aftermarket. It is the kind of name that would get a handful of bidders today if Facebook had used some other name.
I agree though most companies register a$10 name but for a domainer this is all about the 1% that will buy a name on the aftermarket because they want something better. Which names will businesses actually pay a high price for? It is unlikely to be new tlds or made up words (unless very short) because there is unlimited supply of this type of name.
Nobody
Rick, thanks for your insights! When I was first starting, I read everything you wrote. Your many contributions are appreciated! Thanks for being the voice and vision to those past, present and future.!
Emma
“Just think these companies worth hundreds of billions of dollars and approaching Trillion Dollar Valuations, mostly work out of ONE .com address”
I think these companies are ideas, not domain names. There is no single premium domainer approaching even 50 million Dollars, that is, if you can approach 100K, and you must have been there when domains started to own a premium domain and struggle to sell it today for a decent amount of money.
Ideas ideas ideas develop develop develop. There are millions of premium domains names and most are undeveloped because the owners have no business ideas for them, and they are producing nothing but bills. If you have a great idea you can launch it with a made up domain name.
Rick Schwartz
The domain name is Raw Land. As domain investors we own the raw land. Some domainers are contractors and developers and are capable of building some modest businesses. Most are not. I am not. I am looking for those with that talent but I am not interested in lemonade stands and a barn in the wilderness. I am interested in skyscrapers smack dab in the middle of town. My valuation therefore is much higher than others that see things differently.
emma
Some of the things you are saying make sense but one has to consider many things.
If you see Alibaba, Youtube, Amazon, Ebay, Apple, Craigslist, Linkedin, Google, Yahoo, Whatsapp, Snapchat, Facebook and many other internet based companies you will realize that the domains they built their business ideas on would not even fetch $3K at any domain auction, I mean all combined,except Apple, which could fetch $20K or so but which is not even dealing with apples as fruits.
But these are the companies whose valuation could range from 3 Billions to 600 billions, approaching a trillion Dollar valuation. This is a kind of money no domainer could get, not even in a dream, and why? Because these companies are almost 100% business ideas. The domain names where they sit on is the smallest and easiest part of the solution to the success of these companies, so is the technology used to build these companies.
When I go to Namebio and see the daily domain market report($100K or less) shared by millions of domainers I can see how people are wasting their time and lives being domainers. I have been there and since I started developing made up domain names my life changed. I made my first million Dollar 3 months ago; I would have been a terrible mistake if I did not decide to stop domaining and start developing domain names.
If you have a great business idea for today’s world then the domain name and technology to use to build a business on this great idea is not a problem, not a problem at all. The technology is there, IT people are there and the domains are there, you ca even make a domain name up.
I did what Rick Schwartz termed as “Changing patterns” but in a way opposed to Rick’s logic.
I hope people will understand my point
Snoopy
Something like Apple.com is more like $300k-$600k at auction if there was no computer company called Apple. You are talking things down greatly to suggest it would be a 20k name. The market is far stronger than that.
Ian McKay
Hi Emma
Are you saying that thre is no future in coming up with a unique domain name; that has the potential to serve a specific area of business, with the intention of selling it on for profit?
Green Jobs
GreenJobs.com is a domain we recently acquired and a good example of what you are saying here Rick. Premium land vs swampland. :)
Jose
Rick, you have made me change my mind with your previous post and today you just finished, and I’m staying with you to compete in sales very likely not to be like yours and many others, but I have thought with the pillow last night the good premium domains of one and two words I have, have given of weighing in a maturity plan of what I can ask and negotiate as far as I can get myself with the buyers domainer.
I am very clear that I do not expect to sell for 5 or 10 years, with one year to two years premiums can have a very good sale if I have good income and visitors traffic.
.
I also already have retirement 65 years of age and health to go well while this works is the best.
This Monday start sending offers by email of premium domains of a word by email, to the domainers that may be of interest, if I sell is a necessity to continue reinvesting in expired and new domains.
Those who do not sell tomorrow will be in multi-domain hosting with CPC ads from 1 to 3 USD per click, make a safer money every month and pay all for escrow.
Every day I get more than 100 new domains (.com) there is a lot and good yet `to register, and to have a portfolio of more than 2000 TLD domains 90% of them (.com) the best to keep to monetize and many of they look for a buyer domainer to reach an agreement so that after the 60 days with traffic of visitors reach a $ figure, agreed for sale ..
Finally let me know through a blog with WordPress.com and write new entries, domains, strategy, advertising, and write what I like more and I think also many of you.
Happy day.
Jose
MLi
Jose, you can barely type a few sentences that are grammatically correct. I wouldn’t trust your judgement with domains. I think you’re delusional.
Leonard Britt
Even though West Palm Beach is an old city, up until a few years ago there were still quite a few vacant lots. Now that Brightline has high-speed train service to downtown Fort Lauderdale and downtown Miami, one condo complex has already been completed (Alexander), two others adjacent to or across from the Brightline station are close to completion and another is being built by the bay. Another bayside property was also sold recently and will be built over the next couple years. Brightline brings visitors to the area and also makes it easier for someone living in downtown WPB to commute to a job in downtown Fort Lauderdale or potentially (though a longer commute) even downtown Miami. There are still a few additional vacant lots in the downtown area so we will see over the next couple years if they stay vacant or not.
Lucas
Well, type-in traffic has been falling overall in the last decade almost (together with PPC revenues). At what point exactly did the Empire State Building’s traffic/revenues go on a downward trend for years or decades or even half of it’s own history?!
Also, “a domain’s revolving door enters from the entire universe” yes, but so it happens to all other domains, including all of your competitors! in essence killing much of the real estate component of a domain. It costs the same time to get to AutoInsurance.com as to Insurance1234.com, so aside from type-in traffic and SEO benefits, the first one has not much advantage over the second really. Actually if a GREAT company sat on the second one, the value could grow and dwarf that of the first one…
Amazon.com or Facebook.com, instagram.com or google.com are not generic domains. They were all ‘swampland’ before their respective businesses used them! The first two I would not call generic because their business model has nothing or little to do with the literal meaning of the domains. Amazon does not sell Amazon wood, nor Facebook sells Facebooks. I guess they are known as brandable domains, right? Like your punchbowl.com sale! Generic domains are not real estate, and if they are, it is becoming a ghost town. Particularly product-domains where your main competitor, Amazon, has “a revolving door that enters from the entire universe”. So it puts you out of business before you even start…
what am I not seeing?
Thanks for sharing your thoughts in any case!
R P
You are absolutely clueless how internet marketing works, nor do you have any understanding of consumer behavior or branding.
Just giving you honest advice here. Study up on marketing a bit, and learn how the guts of internet advertising works.
Mehtab
Thanks for everything Rick. Learned a lot from you, mostly through the tweets. I already got what I was looking for and now trying to build slowly. Keep posting though, it helps a lot to complement my strengths and I often find your way quite entertaining. Will meet you someday, hopefully.
Gary Appleby
Alligators and suchlike found a use for swampland long before we started to build towns.
Stephen Cheatham
The vacant lot analogy is all I have used from day one, twenty years ago. And location, location, location.
Good to hear from you Rick.
Steve
picked
If domains are digital real estate, why is everyone so afraid to put a price on the “good” domains? You rarely see a valuable domain advertised with a BIN price. It’s always make an offer. I’ve never worked with a real estate agent who takes me to a property and shows me around and then says “sorry, I cannot tell you how much the owner wants for this property. Why don’t you make an offer and I’ll contact the property owner and see what he says.”
Lifa Nati
Great to see you writing again Rick.
It’s clear to see there’s not a lot of people with your way of thought, it’s the reason I am always interested in what you have to say.
Google says the first domain was registered in 1985, Symbolics.com. 33 years ago. A year after I was born. I am considered middle aged now. I have had a lot of experiences and failed so many times. I have matured.
My feeling is, domains have matured too. Yes, there’s still some who don’t understand the value and still figuring it but so many factors don’t make it more important to them to acquire a .com
There’s other options. In the crypto space, most startups prefer .io extensions. They can still get their traffic from social networking sites
Only a potential buyer who already has an idea for a particular domain will know it’s true value
Max Fein
@Lifa fun fact, .io domains not so nice…
https://en.wikipedia.org/wiki/British_Indian_Ocean_Territory#cite_note-chagos-10
The people who lived there were forcibly removed around 1970 and they are trying to reclaim their homeland.
Maybe don’t give money to .io – if only the hipsters knew ;)
Cheers, Max
elevator
Wow! Rick I am happy to see you writing again, I was very curious when you wrote your retirement note sometime two years ago.
but I now realized that once you are in domain name business you are entrapped to a highly addictive venture.
I also thought of what will you do to your domains portfolio or have you sold them all?
This your write up is very fascinating and highly educating though I looks at domains as a very big business and share your thought.
Thanks you so much for writing again.
Peter Nilsson
Hi Rick! i agreed with your post/article.
BUT ALL good domain names are actually still yet not gone!
As a “domaininnovator” iv found hundreds of top domains still
free to register – by diligent searching and researching.
Best, Peter Nilsson
http://www.domaininnovator.com/