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.
I share most you your views on the positive outlook for the domain business a such, and would like to draw your attention to two main drivers of growth that actually drive each other and seem to be underrepresented in many debates on the future of the web – the combination of “social web” with the advent of mass market uptake of “mobile uses of the Internet”
IMHO this translates into three more items ad like to suggest as additions to your list:
7. The individuals that create personal content in or outside large social community service will seek to further customize and individualize their experience – with individualized domain names to become their “social beacon” and designated entry point. Many future domain names will be running small, specialty sites catering towards a very small community and sit in the famous “long tail”
8. We ain’t seen nothing yet: It is irrelevant that the “Generation Desktop Internet” is slow and/or unwilling to fully embrace mobile properties to the max. Today’s installed base of internet content will fundamentally be expand and enriched by droves of new users whose first, foremost and dominant user experience of the internet is via their mobile. These new users will become *the* driving force introducing a totally new paradigm in understanding, targeting and serving their mobile customers.
9. Approx. 1 billion new mobile handsets per year push a plethora of variation into the market, the vast majority of which do offer to use the Web via XHTML which allows displaying most fixed and mobile sites). Site owners who embrace mobile users must use a distinguished domain names to peek out of the sea of the “dotcom legacy with no mobile support/adaptation”. The new mobile crowd will not be shy to embrace something new, in opposite to “the still desktop focussed crowd”: They will simply pick clearly distinguishable other TLD to fill their needs – locally and globally.
All the best!