With all of the uncertainty in financial markets, here are 5 reasons the bull market in domain names should continue.
Many financial markets are up and down, but domain name values continue to rise. Will this trend continue? Here are five reasons it should continue on its upward trajectory.
1. Supply and Demand. Companies are creating web sites in record numbers. This includes not just new web startups but also bricks-and-mortar companies that realize they need a web presence. Since the ideal domains for their businesses are already registered, they are sending offers to current registrants. Good domains are resulting in multiple offers and thus pushing up prices. I recently met someone who started a hosted web applicaton. He dropped $10,000 on a good two word domain without blinking an eye — he realized that no one would take him seriously without a decent domain name.
2. It’s easier for lay people to buy after market domains. The process for buying an already registered domain used to be very difficult. Now, thanks to services like Domain Distribution Network, many registrars allow customers to purchase already registered domains from within their shopping carts. It will only get easier in the next few years.
3. The weak U.S. dollar makes domain purchases cheaper (for people outside the U.S.) Europeans, Canadians, heck — just about anyone outside the U.S. — is able to spend more in U.S. dollars for domain names. Although this doesn’t necessarily push up the “real value” of domains worldwide, it is creating added competition amongst buyers.
4. There’s a flood of capital looking for investments. There’s a lot of capital that investment managers need to put to work. And debt is still relatively cheap. 5 years ago few investors would suggest domain names as a viable asset class. That has changed.
5. Big companies still don’t understand the value of a good domain name. When they figure it out, they’ll pay top dollar for good generic domains.
6. (Bonus) Ad dollars continue to shift to online advertising. Enough said.