Morning Folks!!
The real estate market is based on a square foot price. Prices range from perhaps $50/foot or less in places like Detroit and rural areas to over $10,000/foot in places like Manhattan and even more in places like Hong Kong or Singapore.
But what's the square foot price for a domain name? I think you would need a MICROSCOPE to even see it!
Mattress Firm HAD 700 stores until this year when they started to close them all. Why? Online stores ate their lunch. Put them out of business. Outperformed and out delivered them.
How much did it cost to run 700 stores vs a $10/year renewal????
How about Sears? THOUSANDS of big box stores. How is that microscope. Can you measure it yet? Imagine if they closed all their losers 20 years ago and focused on Sears.com and/or generics and had an actual Internet strategy.
I look at the value of a domain name thru a different lens. I ask different questions. I make different comparisons. I see a different picture.
Who would think a microscope and domain name have anything in common?
Why is something that is OBVIOUS to me (and hopefully most of my readers) with the naked eye still invisible to the end user in ways that would transform their businesses?
If you could go back in time wouldn't you try and shake up Sears and the rest?? Would their destiny be the same if they took the path I have suggested vs the path they took and lost everything??
ToyRus, another example. How much per Square foot were they spending? Gone!
They all went extinct and so many more to follow because they spent MILLIONS and BILLIONS when less than a PENNY would do!
How much is a PENNY a square foot if you can cover the entire world?? But it's MUCH less!
May need a "Hubble Microscope" to crunch these TINY numbers!
The way I look at the universe, nothing is more powerful than a great domain name in full and universal use. Amazon vs Sears. Which side of the Telescope or Microscope should we look through??
It's a CHOICE! Just cuz the masses of CEO's have not figured it out yet and some schmucks literally ran 100 year old companies right into the ground, does not mean WE have to be dumb too. The demise of Sears should be a movie for all to learn from. Who would you blame? Let's start a list!
That said, I have called Sears leaders the "Ivory Tower Boys" since I was 21 and calling on them. They sat up in their tower in Chicago and had an attitude you could smell all the way to Miami. I am so glad it is Sears that went belly up. Sears and their arrogance, now DEAD! They sqaure footed themselves to death!
Rick Schwartz
MapleDots
First of all
I think this is one of your best posts yet, the way it portrays square feet retail to the internet is remarkably accurate.
I do need to correct one thing though. Sears itself did not go bankrupt, instead the people at the top got greedy and brought it into bankruptcy. Same goes for Toys R Us, it is the companies that buy struggling franchises and send them into bankruptcy that are to blame. Sears and Toy’s r us could have been saved but there was more money to be made in bankruptcy by screwing the suppliers and pensioners and putting the profits into the pockets of the shareholders of these immoral bankruptcy companies. Read up on them, they buy businesses, run them for a very short time, sell off all assets, keep the money and then send them into bankruptcy and get away with screwing the pensioners. Watch as more stores struggle, instead of going in and doing like you sau “focus on the internet” these companies get sold and the cycle of liquidation begins again.
Anon
“Putting the profits into the pockets of the shareholders…”
In a bankruptcy, shareholders lose and their shares fall to zero or close to it. It’s the bondholders who step in and take over during a liquidation or turnaround in bankruptcy. Bondholders take a haircut on the debt and interest owed to them and in exchange get equity in the new organization post-bankruptcy or they get the cash value of the assets sold off in the liquidation.
You should lump in shareholders with suppliers and pensioners who you say get screwed in a bankruptcy.
Andrew Hyde
Couldn’t agree more more with this post and the comment from MapleDots. It’s not only a lack of foresight in the changing markets with more and more being online and convenience of online shopping, that these know-it-all execs ignored the opportunities and they had the money to own the domain market as it emerged. The domain space to business is absolutely critical and better be ready for 70+ percent coming from mobile users.
Wolfgang Möcklin
On the internet, specifically regarding dotcoms, instead of calculating meters by meters, we calculate the combinatorial scarcity of letters by letters to determine value. There are different trajectories, as in real estate, and combinatorial scarcity is one of them. For example each thinkable two letter dotcom is valued at least $2 Million USD taking the Estibot market cap of $1.46 Billion divided by 676, the number of possible two letter combinations. And this should be seen as a very conservative figure. The real world numbers should blow you away, too!
gene
Great post, Rick.
Twenty years ago one of my relatives was an executive sec’y for Readers Digest. She’s smart, but because she was just an ‘admin’ none of the Ivy League idiots in management there would listen to her opinions.
One suggestion that she formally made to them was that they buy this tiny, emerging bookseller named Amazon.com. She told them that she had great experiences using their service, and that they’d be a perfect fit for Readers Digest.
They’re (very classic corporate) response was this: “Oh, we never buy smaller firms till they actually prove themselves.” Instead, they bought some stupid company called Gifts.com, which was an immediate disaster.
And as the company was descending into oblivion, a PE firm bought Readers Digest and promptly put a group of over-educated Manhattan women in charge of the turnaround. Obviously, they didn’t succeed – because, again, they ignored the importance of the Web, and stayed focused on their 19th century mail catalog to drive sales.
So 20 years later, all those execs are sitting on a beach somewhere with the shareholders’ money, added NEGATIVE value to that superb brand, and suffered no penalties for them whatsoever for destroying thousands of livelihoods.
Jay
It’s this simple … let a mofo lease out a department store at $120,000 a month then let him pump tons of A.C with the doors steady opening and closing then let him turn on the lights and leave them on 24/7 then pay some kids to help whatever customers I mean browsers he gets. Then pay for water and gas etc then inventory after all that let him try and turn a profit. Merry Christmas
Michael Anthony Castello
Sears is no longer the giant they once where for one main reason but it starts with – Prodigy. It was their big shot at the future. As a matter of fact they ruled the online dialup world much like Google in the 80s and early 90s. Pridigy was an intRAnet. It had all the things the internet has now except Sears owned it. They even had banner advertisements at the bottom of their pages. Everyone that was savvy was on it. It’s how I cut my teeth on the backbone in 1986. Prodigy ave you all of the benifits of the backbone with their own browser for WWW, FTP, Telnet, Email and Gopher for search. I remember being able to access a bulletin board to buy books from a startup called Amazon. Prodigy basically ruled the online. They were king. Then came “You’ve Got Mail” AOL who beat them at their own game. The killer to Sears was Bill Clinton who, in 1993 opened up commerce with the Informational Super Highway or the internet. What did AOL, Amazon and a host of other entrepreneurs use to dominate that new world? .Com
It was the internet and .com that slayed the brick-and-mortor giant that once was Sears.
michael
Loved reading this history, thank you.
John
Yes, that was very enjoyable and interesting history, Michael.
jeff Schneider
Hello Michael,
As usual, you being a Legacy Domainer, have come up with the real visionary truth. = ” It was the internet and .com that slayed the brick-and-mortor giant that once was Sears. ” JAS
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence, Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) http://www.UseBiz.com
Jeff Schneider
Hello Michael,
” It was the internet and .com that slayed the brick-and-mortor giant that once was Sears. ”
You being, a legacy Domainer expert , have the correct answer. JAS
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence, Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) http://www.UseBiz.com
John
“Why is something that is OBVIOUS to me (and hopefully most of my readers) with the naked eye still invisible to the end user in ways that would transform their businesses?”
I copied this to respond but you already covered it as I finished reading your post.
Because we are dealing with a lot of arrogant entitled narcissists and even nothing short of sociopaths in many cases. As I also just touched upon at Elliot’s re datarecovery.com.
Once again, glad I saved this blog for last in my daily circuit. ;)
John
P.S. Filed under “Domains – Value of.” :) Now if only more domainers could see this reality it too…
John
p.p.s. correction, that was at DNW, not Elliot’s.
Bobby
Jim Cramer’s Genius buddy Eddie Lampert (both Goldman Sachs alumni) had a chance to save Sears but even he was not smart enough to do so.
https://en.wikipedia.org/wiki/Eddie_Lampert
https://edition.cnn.com/2018/10/18/business/eddie-lampert-sears/index.html
Danny Pryor
Here’s how Sears could have made it: Close nearly all their stores, except the largest ones, which would become regional warehouses and pick-up centers. Then, sell the most notable items online, Craftsman, Kenmore, etc. They sold Craftsman, like idiots. Then, use big-box discounting of regular brands like Levi’s, Nike, etc., because they had the buying power long before Amazon took it away. And Amazon doesn’t usually sell most of the stuff, anyway … they’re just a channel, a digital ecosystem. So, how about making deals with suppliers to sell direct-to-consumer via Sears.com or TheMall.com! OMG!!! Image a TV commercial in 1999 that urged Sears shoppers (and everyone else) to just go to TheMall.com, and buy anything you need without ever leaving your home! You can even eat your own food from your fridge – no visit to the food court needed. Well, here we are 20 years later. Actually, Sears could still have pulled this off as late as 2009 or 2010, when it was cheap to make deals and scoop up hurting entities, and very profitable to close expensive stores. But, by then Amazon was already selling Prime memberships, and it was, without any kind of plan in place, only a matter of time before Sears could no longer patch the emerging cracks in the walls, both real and figurative. Amazon digitized what Sears did via catalogue (the old spelling) in the 1890’s. So, like the bankers a decade ago, I’m sure some executive will get a big bonus because, while running the company into the ground, the shareholders didn’t get burned as badly as they COULD have been, in someone’s wan view. Oh, and I bought my last mattress online, too, from Ghost Bed. ;-)
Jay
You really want to know how sears could have succeeded. Well here it is. They should have bought
Clothing.com
SportingGoods.com
Hardware.com
Shoes.com
Pants.com
Jackets.com
Suits.com
Socks.com
Appliances.com
and whatever else they were selling. Then forward those domains to SEARS.COM
Jose
I can only write that after reading the news from Amazon that he plans to create 3000 supermarkets to achieve the supremacy of the service caterers for the millions of people who eat at home.
In my humble opinion is a mistake by Amazon want more than what you do not have and harm other major brands and companies in this new market and also dethrone Walmart and win your market is a very dangerous chimera, for the economy and market from the USA to see as an advance to give more jobs I think that it will not be like that since it would not be profitable and everything will be robotic.
Happy Day. Jose
Jeff Schneider
Hello Rick,
Great post! Your visionary projections are becoming more focused. Now all we have to do is relax and buy some popcorn and wait for these visions to manifest. JAS
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence, Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) https://www.UseBiz.com
Johan
I like your analogy with domains vs. Real estate per square foot. Also liked that one you told with “a Kiosk in a local mall for $18,000.”
Jeff Schneider
Hello Rick,
” Why is something that is OBVIOUS to me (and hopefully most of my readers) with the naked eye still invisible to the end user in ways that would transform their businesses? ”
Our take is that End Users are swallowing the Google Admen Kool-aid that Domain names are not important. JAS
steve
Offline Retail is headed to pasture, except for highly specialized shops that provide unique offerings and amazing customer experiences – “a glass of wine or a cup of tea, sir, while we get a pair of shoes in your size?”
Sandra
I see many small retail-stores here in Europe closing down in the last few days. Even before Christmas-shopping season comes to an end. Something huge is going DOWN with retail. Your prediction that many stores will close at the end of this year is correct.
Jeff Schneider
Hello Rick,
It is hard to price financial instruments that have infinite potential compounding returns. Because of this, Prime (.COM Equimodtty Platform TAX SHELTERS)are and have always remained The Next Big Thing.
(.COM Equimoditty Platform Assets) are Strategically Superior (TAX SHELTERS), whose Internal Compounding Multiples actually compound internally Without Cash Infusions. They are the purest (TAX SHELTERS) to ever manifest. You are all probably wondering why you have never heard them in these definitional terms before ? ANSWER : There is fierce competition for these rare assets. The Really Smart Institutional Money circles do not want you to know about these Strategic Tax Sheltered Cash Cows. Institutional Non-Disclosure Sales of (.COM Equimoditty Platform Asset Tax Shelters)have been at the highest levels, We have ever experienced. Also : ” Business Investments in Intellectual Properties is rising at the fastest pace in 12 years ” Institutional Investors and corporations are investing Heavily in tomorrows Big Ideas. JAS
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence, Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) http://www.UseBiz.com
Ted R. Barvidere
Huh?
John
Jeff, when are you going to answer why you haven’t regged Equimoditty.com yet, and why it isn’t spelled as “Equimmodity” instead (combo of “commodity” and “equity” of course)?
Joe
If the physical retail model is bad, how it it that Walmart is still around and profitable?
UFO
Walmart is just end gaming the old hacks that haven’t migrated to the net yet. It’s the same with the gambling industry with respect to high street stores and people using cheques and so forth. There’s always the ‘laggards’ at the end of the tail that keep it alive until they die off.
Amazon though should get some retail frontage simply as ‘try before you buy’ flagships and CHARGE suppliers (like with concessions) to display their product there. (also as click and collect centres).
Amazon though is garbage for serious business procurement as you get a multitude of sales invoices from random suppliers, its just a fcking mess, I stopped the current company I am consulting to from using them in any meaningful way. Easier just to use and engage the suppliers that feed into them and cut our their 15% or whatever cut on the deal.
Jeff Schneider
Hello Rick,
There are Blockbuster (.COM Equimoditty Platform TAX SHELTER)Sales in the pipeline as We speak. These Sales will forever transform the image of (.COM Equimoditty Platform TAX SHELTERS)forever. JAS 12/9/18
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence, Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) http://www.UseBiz.com
John
Thank you Estibot, for all the harm you have done to the domain industry, as I have to experience this again today just a few moments ago because of you:
“And why is your ***.com worth anything over $*** that Estibot estimates? What’s worth $*** here?”
UFO
I know about the costs per sq foot in the desirable ‘private equity’ quarters of London. What a lot of people don’t realise is that a lease on a high end commercial space is VERY expensive. Lets say you get 500 Sq ft which is SMALL (20 x 25 ft) then at around say $150 ft + 50% for business rates and then all the Heat Light Power, sinking fund, 6 months bond ($40k on the nose) then you’re up around say 130k Pa. That’s a lot of straight out overhead.
Or, you can buy a good .com, get a virtual front office with access to pay as you go meeting/board rooms and look like you’re an industry heavyweight.
If you’re highly entrepreneurial and know the .com game then there’s millions for you out there.
Andrea
They square footed themselves to death…
https://www.zerohedge.com/news/2018-12-22/merry-christmas-eddie-lampert
Merry Christmas Eddie Lampert!