Domainers’ views of industry are shaped by what’s going on close to home.
I’ve noticed a lot of domainers writing about how the world is ending. They think the economy is going to continue tanking and this will continue to hurt the domain industry to the point of a doomsday.
Could it happen? Sure. I worry about the U.S. government’s debt, the threat of inflation, etc. But I also think your view of the world is shaped by your local economy.
Here in Texas, if it weren’t for the national media we wouldn’t realize something was wrong. Unemployment is up and so are foreclosures, but it’s nothing more than a typical recession. A friend just entered into a bidding war to buy a home. While car shopping this week, I noticed that many of the dealers were almost out of many of the cars I wanted.
The cover of this week’s Economist shows a washed up surfer carrying a beat up surfboard in California. In the background is a muscular swimmer carrying a jet ski over his head in Texas.
Many of the domainers who think the world is ending live in Florida and California, two states hit very hard by the recession. This is mostly due to extreme excesses during the past ten years and poor government policy.
Of course, it also matters how you placed your bets this decade. If you bet on massive portfolios of long tail domain names and selling to other investors, you’re hurting more than the companies that have focused on end user sales.
What do you think? Does the local economy color your view of where the domain name market is headed?
Rob Sequin says
Hey, good question.
It does matter what’s happening in your area since most people work locally but domains are international. I can see how your local economy can carry over to your perception of your domains but what’s going on in your community and what’s going on in the domain world are probably not related unless you have your area + industry .com domains.
I’m here in Massachusetts (Cape Cod) and there are plenty of people here on vacation and in their second homes. Sure people say things are slower but I meet people that are doing fine (relatively speaking) too.
For me, the local economy seems okay but I wonder if there is another shoe to drop with regards to US commercial real estate.
Regarding domains, I’ve had several big deals this year (broker and sales) but sales are down.
I have been able to buy some good domains so I am in development mode for the summer.
That’s the way I see it looking over my keyboard and out the window.
Andrew Allemann says
“For me, the local economy seems okay but I wonder if there is another shoe to drop with regards to US commercial real estate. ”
Rob, don’t wonder. That is the next shoe to drop. How far, I’m not sure.
jblack says
Once again, it’s the states with the highest taxes and social welfare networks that are going bankrupt. NY and CA. Now their models are becoming the national model. Insanity.
Agree, commercial real estate is the next shoe to drop.
Generally, quality generic, traffic names should still continue to do well, in large part because their growth potential coupled with implied low overhead make them more attractive as efficient business foundations compared to typical brick and mortar businesses stuck with higher overhead, liabilities, rent, insurance costs, local only reach, etc., etc.
Invite readers to listen to the video clip of Tim Middleton (financial expert) and his take on the coming inflation. (Go to msn.com, query GLD in the stock symbol window to watch his video below.) He suggests a way people can weather that inevitable, coming inflation storm.
jp says
If cash becomes trash then I think domains will still remain fairly golden. Its not like the internet is going to be rendered useless by all this.
Also, I don’t know why everyone is so upset about the US being in debt. Maybe I’m mistaken but when was the last time the US wasn’t in outrageous debt? At a certain point the debt becomes meaningless, especially as long as the US remains on the top of the list of world superpowers.
I just think we are headed towards looking like Brazil or any of these other countries with no middle class. I’ve been to Brazil, still an awesome place. I’ve been a conservative doom & gloomer for years now, and I think that all this bad economy stuff is great news. I think that out of all this alot of the BS that has been pissing me off for years will be corrected (albeit probably replaced with new BS). There is definitely giong to be change, just maybe not the change that Obama was talking about. Reality is a tough thing to stop from happening.
Hayden says
Good point Andrew. Overall in Canada, we have been impacted by the Global Recession, but some places are worse off than others. Ontario has been hammered by the drop-off in manufacturing (Ontario is home to several automotive plants), but out here in BC, specifically Vancouver, housing sales are again flying high even in comparison to pre-recession numbers.
Kevin M. says
**Maybe I’m mistaken but when was the last time the US wasn’t in outrageous debt? At a certain point the debt becomes meaningless, especially as long as the US remains on the top of the list of world superpowers.**
So, so true! It’s funny how some are so concerned ‘all of a sudden’. (Eh, soon there’ll be another ‘OMG’ topic for all to be ‘concerned’ over.)
And that commercial realestate collapse, is already a happening reality here in LA. (the shoes keep dropping!!)
jblack says
“debt does not matter” Cheney must have been right then….
Everything seems to be working just great for California, New York, and the over leveraged consumer.
Jon says
I think that a really solid category generic .com will continue to hold and increase value relative to inflation (even runaway inflation) or currency fluctuations (even complete dollar or euro collapse). I can not think of anything else I would rather own for the next 10 years in fact.
M. Menius says
I think local economies differ considerably around the country. Miami was probably leader of the pack with outrageous high-end over construction. That being said, it’s a city of the future and will rebound remarkably. This “recession” is a blip on a grander timeline.
@jp “Its not like the internet is going to be rendered useless by all this.”
Exactly. To the contrary, I am 100% certain that the internet is becoming the nexus of the business world. When language translation software and instantaneous currency conversion become available, the entire world will become interconnected in ways that will revolutionize global commerce.
Related to this, country codes will become incredibly central to the internet.
[email protected] says
This is a full cycle effect, even you’re not affected at this time sooner or later you will some how.
I take it one day at a time. And thankful to all the blessing.
Cheers for now.
Emil
Johnny says
@jp……60 million Brazilians moved into the middle class in the last eight years. They overtook the U.S. in the production of beef, soybean, and many other agricultural products.
2 Real = 1 Dollar, give or take. That ought to tell you something about where the U.S. is at now. It did not use to be like this. It will cost you some nickels now to travel to Brazil.
There’s nothing but hard times coming for the U.S. To me, that is not doom and gloom, that is reality.