The Domain Industry, Lunch Trucks and Sunday Morning Ramblings….

Morning Folks!!

Go to any construction site and you will see the "Lunch Truck" come by several times a day to sell food.

So imagine that the internet is the construction site, the address is of course the domain name and the lunch truck is the domain industry. Now imagine there is a HUGE construction zone and multiple structures are all being built at the same time. Now you have many dozens of those Lunch Trucks serving those workers.

What happens when the construction is over? There are no longer 4000 projects but only a few here and there? What happens? You know what happens! Those trucks go bye bye. They go out of business or they have to move to another place that is developing. But if things are pretty well developed, not many lunch trucks will survive. The numbers will shrink dramatically.

Well, that is where the Internet is. It's built up. It's matured. The Lunch Trucks are gone! Yes, some may choose opening a restaurant, but the cost difference between the two is no small matter. Most can't make that leap.

Point is things are always evolving and you need to see that evolution on a daily, weekly, monthly, quarterly, annual, 3 years, 5 years, 10 years, 20 years basis. It takes time and effort to develop this skill and part of it may be just a gift or is natural or whatever. But it's always about practice. Predictions are not a whim if you hone this skill. They are based on facts and elements and conditions and a host of other things like life long experience and history.

Point is the demand for domains is down. Way down. We went from almost 100% end user need and customers to nearly 100% domain speculators with very few end users. The Internet is built! In 1993-1995 the building started. The Internet has passed Critical Mass. It is now mature. No longer an infant. All grown up. The game has changed. It will continue to change.

The most promising sector today are those businesses upgrading to better domain names. The .Net guys acquiring the .Com. The extra word at the beginning of a domain that gets eliminated. MyThis.com or VisitThat.com or OurProduct.com etc.

Then you have the startups. Most of them come and go very fast. Usually they make a mistake with the domain name and that becomes their biggest hurdle and they don't even know it.

The high end domain investor class is all but gone. Simply put, the risk is too great and liquidity is no longer there. It's no longer a safe and good investment.

The last quarter of the year that starts on Monday is important. Important to domaining and business in general. Big business is done and big decisions are made. October/November/December are HUGE month in domaining. And I like February and March as well with new budgets and fresh cash. Domain Buying Season is HERE!

Is the big money in domaining over? Probably not. 2018 sales seems inline with 2017 sales so far. But it may take a multi-year break at some point and that will change the landscape of what the domain sector looks like and who participates in it.

Supply and demand folks. Supply is overflowing and demand is going down like Sears customers. The Need, Want, Desire, Project levels out there are not what they once were. Not even close. And, it never will be ever again. Sorry to burst your bubble. But the #1 part of business is dealing with reality and that reality is in constant change.

If it were not for the China Frenzy, the entire domain industry would have already been unrecognizable today. Frenzy's come and go. The best you can do is put yourself in a good position for the next frenzy. What's the next one? Who knows? That's why you need to pay attention and evolve with the times. Times are a changin'!

I made my fortune by buying domains from domainers. Those same domainers lost fortunes by selling to me. Sell your domains and dreams to dreamers. Don't sell to domainers. But soon, many may have no choice as the walls begin to close in.

My income was mostly PPC and rose to about $4.5MM/year until the crash. In 2009 it went down to $750,000. The first year since 1998 that PPC did not earn at least $1.5MM-$3.0MM or more. Today, not even $100k from PPC. But still enough to pay all the renewals. My goal since 1995 was to make at least $1 Million/year online.

PPC was a bonus. I never depended on it because I knew it could go away overnight. But that crash is directly related to the value of domains and the marketplace of buying domains. The equation changed drastically. I could no longer justify buying a $100k domain from another domainer because I could no longer calculate a return. Before then, I had a decent idea of how many years or months I would have to hold to break even. That would make my domain purchases free. They were all free.

The $42,000 mortgage for Porno.com was paid in the first 6 weeks. The $12,500 mortgage on Ass.com was paid in 125 days. Some were paid off even faster. The slower ones still were paid off. Every prime adult domain I bought was FREE! Paid for themselves in spades and then still had the domain itself.

Then I took those profits and bought mainstream domain names before there was even a mainstream. There was no way to get a return for those names back then. They could not be monetized. But I kept ploughing that money back into them regardless as I knew that was the future and that basket was huge compared to adult. Eventually my mainstream domains dwarfed the adult ones in size and scope.

There was a sense of urgency to BUY. That sense of urgency is GONE! The "Unique moment in History" has all but passed. It lasted 20+ years, but that window is about closed for the first stage. The second stage has to come with very big money to seize YESTERDAY!

In 1999-2000 I wrote many times about the collapse of the Internet. Brick and Mortar stores tried to kill it off. Said it was unsafe etc. etc. But I had a saying: "From the ashes will rise the REAL Internet". And it did. The collapse left ashes but those ashes rose to where we are today.

Business is about 2 things. History and the future. You can't see or predict the future without a keen understanding of the past. Direction comes from history and your future comes from the destination you decide on.

So it may be a great idea to be in the Lunch Truck business but part of being in business is to see the future trends and not being blind to them. Change is coming. It comes every moment of every day. Your mind has to be as fluid as the things around you. Time to move that lunch truck to a new city. A new project. A new destination or the food will rot and you will go broke!

Rick Schwartz



22 thoughts on “The Domain Industry, Lunch Trucks and Sunday Morning Ramblings….

  1. Michael D.

    An amazing writeup, reminds me of those posts in 1999 – 2000.

    What’s the next sector you’ve identified and have your eyes on? Just curious.

    Crypto looks interesting, not because the meteoric rise but because the collapse that followed. Could it be the same, that from the ashes of the first bubble will rise the real crypto internet?

    What else is on the radar where someone today could start and strive?

    Reply
  2. Joseph C.

    In terms of the next sector that Michael D. is inquiring about, all indications point to AI and Robotics. Machines that learn and acquire human-like thinking abilities.

    IBM calls it the ‘Cognitive Era’. Microsoft is developing a vast suite of tools that it has named ‘Cognitive Services’. Smart tools are responding to voice commands and coming up with solutions in milliseconds by combing through vast amounts of data. Alexa and Siri are early harbingers of things to come. Fusing physical power with cognitive computing is where the future seems heading.

    ‘Internet of Things’ and ‘Cloud Computing’ are reaching critical mass as intuitive devices move us further ahead in the cognitive era. When ‘cognitive devices’ start replacing massive amounts of workers and large layoffs start, the benefits of the new era need to be well articulated, together with acquisition of new skills. Also, efforts need to be made to cushion the harder aspects of the shift from those least likely to adapt to it. ‘Cognitive Era’ will be felt and talked about a lot in the years to come. I think that is the next big sector.

    I would love to hear Rick’s thoughts on this and what is on his radar screen. I know he looks fondly on the .app domains and I can see there might be a correlation between them and cognitive computing as an app could be a direct gateway to a cognitive service on a mobile device.

    Reply
  3. Jeff Schneider

    Hello Rick,
    The biggest Demand for (.COM Equimoditty Platform Asset TAX SHELTERS) is yet to come!
    We (Contact Group) are recommending, Selling your listed stock investments and replacing with (.COM Equimoditty Platform Assets) ,which are Strategically Superior asset plays. Especially when we see an extreme ramp up in demand for quality (.COM Equimoditty Platform Assets) due to the introduction of a Web Business Configurater or Web Business Incubator, that is collectively being formulated by more than one Entity as we speak. In the near future there will be a Cloud Based, Turnkey Business Configurater, designed to take Online Business Expansion to the next Level. There will be resistance from certain factions, who may try to block this needed Evolutionary Disruption. Those who are early adopters to this coming Platform, will be the futures new Internet Powerhouses. Its end result will culminate into the most rapid and dramatic Capital Expansion, the world has ever experienced. (.COM Equimoditty Platform Asset (Tax Shelters) ) will comprise its principal base JAS 9/29/18

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence, Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) https://www.UseBiz.com

    Reply
  4. DrDomainer

    This post is definitely in your top 10.
    I agree with Michael it was just like your old posts, every word is like fireworks going off in my brain with your gold nuggets of wisdom. I need, want, desire, more posts like this. I have always looked up to you. There is only one Rick Schwartz in this world, I have tried my best to get to your level but it’s never going to happen. All other domainers can do is their best, Ricks is the best person in this industry to give advice. Rick changed my life from reading his posts, it showed me the right path to go down in life. Thanks

    Reply
  5. Johan

    You have a wonderful intuitive writing style Rick! Loved this post and the points you bring up, also that you admit your PPC revenue being way down for you! A charmer would never admit to this! ;)

    Reply
  6. ding dong

    From over 4 million annual income down to 100K…type in traffic is a dying industry. Its really hard to believe intuitive keyword branding not a staple in any media industry? Or just all the good urls are taken?
    The solution is the market has narrowed in size and scope. Short generic/descriptive domains with a kick ass website will find a home.
    So the golden era of domains has now passed. All domainers should eliminate all the junk domains out of their portfolios!

    Reply
  7. Sigma

    Very informative write Domain King.

    I do believe there will be one last hurrah for premium 1-2 word dot-Coms with dictionary/commercial meaning from 2019-2021. After that period, Corporations will own 15% of aforementioned DNs related to their brand, products & services. Likewise, GoDaddy, Huge Domains, AfterNic, & Buy Domains will own 80% of all dot-coms of at least 2nd tier value. The remaining 5% of premium 1-2 word DN-dot-coms will be owned by the elite domain speculators; everyone else will be washed away in recessionary bankruptcy.

    The time to cull your portfolio is now. The game is quality not quantity…

    Reply
    1. Garett

      Yes, cut your portfolio, but shoot them over to me first for $10 each before hitting that “Delete” button. :-)

      Reply
  8. John

    Peeps, you can’t miss the 800 ton gorilla named Google that can’t even fit in the room, so please stop living in denial. And now also their peers. It’s about power, money and control, not just for business and profits, but all of society, and in bed with government. Stop avoiding the big picture, folks.

    Reply
  9. Jose

    Yesterday night I was reviewing and comparing all the posts and comments that I made in his blog.

    I wanted to find and decipher in my writing what I have answered in my comments and in the end I made a plan of the keywords that I did not understand in the relationship of his post writing, different from other domainers in his blog.

    I must tell you that in this domain market during the last ten years, in my 5 stages each of 2 years get in the first 4 years more losses than profits, the reasons buy many domain names that I believe were good and then no buyer want to pay as premium and have to sell under and another problem of those years the registrar Moniker after the purchase by a German company based in Luxembourg and with a new Ms. as CEO, his previous position in Network Solutions .

    Losing a lot of money by not being able to use domain parking since everything will be with Adsense collaboration with domain registrars for domains without the permission of the `owner, registrant, adminitrative of the domains, three years and without being able to transfer to other registrars, the lawyer Mr Paul could not do anything, years later see that being with this registrar and others (It is easy to find the negative and the positive is easy to find fast)

    In the second stage invest in expired domains and turn increase my income in profits, buy massive domains two months in domain parking give a profit and invest each month in more massive domains and so on each month during these two years and then sell between $ 150 two months and $ 300 for six months, of the more than 2500 registered domains sell 98% and 2% save because see in them that have a good future and get a good sale and renew for 10 years, of this 2 % share with companies that do web projects of the domain and I work in the projects of these companies, such as Sales Strategy and Online Advertising very good salary contract 2 years and purchase of the domain name at the end of an investment $ 1000 get a total 8500000 Euros. (This is a similarity of what you do with your domains in joint ventures, rent, shares, etc., and purchase option, in EU not being the same, not accepting they prefer to take action in creating project, provided that the owner of the domain has one for the company to like and invest in its future for the better, then reach an agreement between the two interested parties)

    These two years were the best.

    The third stage my mother get sick and be a year and a half, half stopped, until she died, my mother (RIP) in this sad stage discover the bids prepared in Flippa.

    Rest of the half year break and paperwork, travel through Spain, as well as want to try to finish my blog that was a mistake not to be prepared and finish by not publishing)

    Fourth and in the fifth stage we are in October 2018 in these two years until September 29, 2018 that I read what I write at the beginning of this comment today on October 1, 2018.

    Come to a conclusion as a domainer have a registered TLD portfolio that 2% have a premium value that belongs to the Broker in search buyers, 98% premium domains that take more than a year registered for sale between $ 1000 to $ 500 today I send a list domains 98% to my Broker, those who were registered only six months ago because I think about advertising sponsorship with websites or blog, and in my own projects some for the US and other EU to describe in one of my comments from the posts written in September 2018, in your blog.

    The end of this fifth stage is decisive for, the next sixth stage of next year 2019

    Now I am prepared as in the second stage, in doing with wordpress.org the blog and having paid hosting and also give the best of myself in a domain market that has changed a lot no sales as before, you are right.

    Back to the best of the second stage of this market domains is what I intend to do apart from the web projects of my own domains for companies interested in the US and EU.

    Thank you for your post be a medicine to think about how bad we do it, many do not understand as well as I believe, between smiles and shadows.

    Happy Day. Jose.

    Reply
  10. DVentures

    There was a scene in Forrest Gump where the Tom Hanks character, for no apparent reason, starts running. In no time, he picks a following and people start running with him. They go through different terrains together. One fine day, he stops and says he is tired and going home. One of the guys in the group asks: “Great, now what are we supposed to do?”

    We have been following the Domain King for a long time, wise words which has saved us a lot of money and made money as well over time..Now he says the party is almost over…
    “What are we supposed to do now?” Hopefully we will find those answers soon.

    Reply
  11. DVentures

    Reason why I was making the inference was that, the movie and the scene in particular, gives pointers on the biggest existential question on why the f*** we are here. It’s all about staying in the moment and doing the best you could and if you could build that out for many years, you are gold!

    Reply
  12. Jeff Schneider

    Hello Rick,

    By Strategically using .COM-Centric Marketing Tactics Outside the Google Traffic Trap.Your company Keeps ALL Your Traffic from being rustled and rerouted by Bypassing,( Googles SEM Model )that pilfers traffic meant for your site. This is what the Really smart Online Marketing Strategists are now focusing on.

    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) Former (Marketing Intelligence, Analyst/Strategist Rockefeller I.B.E.C.) (Licensed C.B.O.E. Commodity Hedge Strategist)(Domain Master)UseBiz.com

    Reply
    1. Jeff Schneider

      Hello Rick,

      (EXTREMELY IMPORTANT CONCEPT TO GRASP)
      The truth of the matter is Googles real interest is in ALL new TLDs being used to bolster their Google Ad Support Networks growth in users. ALL new TLDs require EXTENSIVE ,and Expensive Google Ad support.If you use new TLDs your stolen Traffic as the result of Google Ad Support, will explode. If you want ALL the traffic meant for your site you need to get away from Googles Traffic Stealing System.

      ( .COM Equimoditty Platform Assets)Profit Center Equimoddities are Strategically Effective (OUTSIDE The GOOGLE MARKETING PLATFORM) JAS 10/1/18

      Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) Former (Marketing Intelligence ,Analyst/Strategist Rockefeller I.B.E.C.) (Licensed C.B.O.E. Commodity Hedge Strategist)(Domain Master)UseBiz.com

      Reply
      1. Jeff Schneider

        Hello Rick,

        To suggest that Googles SEM Model gives anyone using their service a leg up in online Marketing Strategy is a huge LIE.
        Why is everyone so enamored with Googles Ad Platform ?? that Effectively gives away your companies Traffic once inside their system. Does Googles System really make Economical Sense for any Savvy Marketing Strategist??
        Gratefully, Jeff Schneider (Contact Group) (Metal Tiger) (Former Rockefeller IBEC Marketing Intelligence, Analyst/Strategist) (Licensed CBOE Commodity Hedge Strategist) (Domain Master ) https://www.UseBiz.com

        Reply

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