Yah’ll regular readers know that I’m pretty bullish about the value of premium generic domain names. In general, I believe the macroeconomics will drive the market up handsomely in the long term.
But after 6 months of budding domainer glamour, I’m beginning to see some signs of a minor slump. Signals: the really big domainers–the public companies–have sh*t the bed recently, with both Communicate.com and Marchex taking a small nosedive. Meanwhile, the results of the highly-hyped Domain Roundtable auction were somewhat underwhelming. A majority of the domains did not meet their reserve, which doesn’t bode well considering the staff tried aggressively to keep the reserves as low as possible.
So what’s up? Is all the domainer hype already beginning to fade? Have valuations leveled off? Why is the domaining industry in a minor slump?
Well, I can’t attribute it wholly to my SEO friend’s reasoning: “Domainers are cheesed*cks.”
I do however think the industry is going through a period of sh*t, the easy money’s over shock. When you buy a domain in 2001, park it, and its value rises 1000% over 5 years, you look pretty smart–really, the macroeconomic trend made you look smart.
We’re not going to get those growth rates in valuations any more though (maybe 20% a year, rather than 50-100% a year). And especially if you’re paying a retail price for a domain–or even a “fifth time wholesale/resale” price–you sure as hell better know how to SEO and make a quality, defensible, highly-monetized Web site… or good luck making your initial outlay back.
And there’s the rub. Domainers–in general–have no clue how to make a quality, defensible, highly-monetized Web site (at least, the Marchex’s and Communicate.com’s of the world don’t). They never needed to know how to before, so they never bothered to acquire that skill set.
Did you enjoy this article?
Don't forget to subscribe to the Tropical SEO feed!