Event cancellations, supply chain disruptions, and travel restrictions are hitting the economy. Will they hit domains?
The organizers of NamesCon hold a big cloud-industry event every March called Cloudfest. It attracts 7,000 people to Germany from around the cloud industry ecosystem.
This year’s event, which was slated for just a few weeks from now, has been canceled due to concerns over the Covid-19 coronavirus. It’s a big financial and personal blow to the team that spends all year planning for this event. It’s also a blow for the economy, especially where the event was to be held.
In the grand scheme of things, it’s a small event. Big for the industry but small for the world. But many other events have been canceled. Mobile World Congress was already canceled this year. It attracts over 100,000 people to Barcelona. Once the big companies pulled out, organizers had little choice but to cancel the event.
Think about the ripple effects on airlines, hotels, Airbnbs, and restaurants. It’s a major hit on the economy.
It’s proof that, whether or not Covid-19 is contained in a timely manner, the worldwide economy is being shocked. That’s why we’ve seen stock markets fall by 15% since February 12.
When markets falter, some people in the domain name business come under pressure. Their non-domain businesses might be impacted. Maybe they got a margin call on stocks.
Most importantly, people are uncertain. And uncertainty isn’t good for any market.
It will be interesting to see what sort of impact this has on the domain name industry. We might see a few distressed sellers. A few take a breather from expired domain auctions. A few people let off the gas.
What do you think?
Richard Lau says
Interesting indeed. A hard call to make, but also an easy one, and the correct one.
When you look at stocks you see “stay-in” stocks going up, like: Netflix, Peloton, Zoom
I think domain names fit into the stay-in category, so I see the value of domains being sheltered from the covid-19 corona virus economic impact.
Ever the optimist!!
Robert Monster - Epik.com says
100% agreed.
Lives are about to become more digital. I think you identified some logical stay-in categories:
– Personal fitness
– Home entertainment
– Digital communication
Probably not a great time to be an airline, MLB franchise owner or amusement park operator, for example.
The lines at the airports are about to get shorter, which means Clear probably becomes a lot less relevant, for example.
Remote officeworkers are about to have their comeuppance.
The implications for crypto is less clear but payments are about to become a lot more digital.
All that said, the fear mongering is really getting a bit out of hand, so may cooler heads prevail!
Digital Address says
IMHO, best site to receive constant updates is The Financial Times:
Simply google “coronavirus latest FT” and it will be right on top.
Disregard cookie nonsense and just scroll down.
Jothan says
After riding out a couple market dips, 2000 and 2008, I agree with Richard Lau that that domains are somewhat resilient.
Your mileage may vary, but money withdrawing from the stock market will look for places to retain value, and online doesn’t seem to be going away or shrinking any time soon.
While retail, travel/transport, and manufacturing sectors seem to be rippling outward, it seems that things that are related to subscription-like businesses and virtual participation (ie ICANN 67 and other meetings) and online activities will be resilient.
James says
What makes me nervous is that, unlike 2000 and 2008, this type of panic doesn’t respond to monetary intervention. It’s a collapse of demand that resists stimulation. Agree with the post above, tho, the smart money was on Zoom.
DomainBoss says
I mostly agree with the comments above.
Not all domains will see positive impact, but certain categories of domains. I can tell that direct inquiries as well as inquiries/offers via domain marketplaces have picked up significantly for few categories of domains as follows:
– Casino, Poker, Betting, Gambling, and Social Casino/Gaming type of domains
– Media, news, TV, Blog, Tube, general info kind of domains
– many other type of domains I see no change like insurance, finance, loans, etc…at least not yet.
Snoopy says
Suspect this is going to it a lot of downward pressure on domains if markets don’t have a sudden bounce back. Startup funding will fall and IPOs will get cancelled.
Most dangerous areas,
-Chinese related domains, LLL.com, numerics, expect more pressured selling.
-.io/.co The cycle is already turning here.
-One word .com, upgrade numbers will drop as companies go to conservative mode and funding gets harder.
Best thing people can do is get conservative and be super selective. Domain industry is often slow to realize the full effects.
Steve says
Due to unfounded hysteria about a pathogen materially less dangerous than the flu virus (which kills as many American’s/yr as die in car accidents — 40,000 +/-); hysteria juiced by the eyes and ears-hungry media; the western world (including the U.S.) will enter recession no later than the first quarter of 2021.
The effect on domain values?
For everything except true premium 1 – 2 word .coms (those today worth $50,000+ at retail, end-user pricing), expect price / value drops on the order of 25 – 50% until this unfounded hysteria blows over 18 – 24 months from now.
Jon Schultz says
Not less dangerous than the flu, Steve. Seasonal flu doesn’t make about 15-20% of people who get infected sick enough to warrant hospitalization. If this continues to unfold as a pandemic, somewhere between 10 and 90 percent of the world’s population may get infected. See the tweets of Harvard epidemiologist Dr. Eric Feigl-Ding, the Recombinomics dot co website of virologist Henry Niman and the discussion at Flutrackers dotcom.
Steve says
Hi Jon. this from MD Mag:
The fact remains that this strain of coronavirus is not highly contagious; it behaves very similarly to other infectious viruses by targeting mainly the weak and/or immunocompromised portions of the population. For most of us, contracting coronavirus infection will lead to a flu-like syndrome, and the majority of patients will most likely survive—very similar to the majority of people who get flu.
There is a certain unspoken factor adding complexity to this outbreak: The fact that it originated in China. There is a good deal of anti-Chinese sentiment in the United States and around the world. Airlines refuse to travel to China and refuse Chines passengers, Chinese tourists are barred from entering certain countries, Western businesses have closed, and ex-pats have returned home. Some of this reflects a certain attitude of fear that the Chinese government hasn’t been honest or upfront about reporting details about the outbreak. Chinese citizens have been prohibited from traveling to some countries. I have even heard cases of Americans avoiding Asian people unless they are wearing masks out of fear that they will contract coronavirus.
All of this is, of course, absurd and, frankly, xenophobic at best—and racist at worst. The fact is, a Chinese visitor visiting the United States at this time is 10,000 times more likely to die from influenza than an American visiting China is of dying from coronavirus.
The 15 – 20% figure is 15 – 20% of those who have been identified as having this infection. Yet, because 80% +/- of folks who get the infection have few if any symptoms, many times the number of reported infected folks have actually already had — and easily recovered from without hospitalization — this virus.
This is all much ado about virtually nothing.
Jon Schultz says
https://www.youtube.com/watch?v=iDelUkpFm60
Digital Address says
And closer to home, The New York Times provides constant updates here:
https://www.nytimes.com/news-event/coronavirus