Domain Industry going well for some, DEAD IN THE WATER for others....

Morning Folks!!

This is the tale of two industries within one. The first sector is doing ok to good. They understand the market we are in the economy we are in and this is not their first rodeo. Income may be down on PPC but they more than make up on it with other sectors and other investments and different ways to make money with their domains.

Then there is the second sector. Don't kid yourself, they are in a world of hurt and their survival will not likely be determined by them. This IS their first rodeo so this is what they are dealing with. First, they did not see this downturn coming. The folks I talk to started preparing for this in 2007 and 2008. They are in a strong cash position and there biggest problem is deciding which opportunity is worthy of their time and money. Secondly, not only are they not in a cash position they are also highly leveraged. So they talk about "Burn rate." The money each month you are upside down with as you compare your income to expenses. That leads to the BIG question.....How many weeks, months or years do you have as a reserve. If you are jot in the "Years" column, you have work to do to get there.

Those that have mediocre portfolios of huge amount of names may face some very serious problems. You equation has changed so drastically that your business model may at some point collapse. One just has to look at the chat boards out there to notice how much posting has tailed off.

A lot of this was evident at TRAFFIC. Just one look around the room and the first thing you would notice is that the age of the folks that attended averaged higher than at any previous show. The reason was evident and that was a big topic of discussion at the show. For some it is like watching a slow motion collapse.

Here is the fallout....MILLIONS of low quality domains will be dropping or changing hands as things deteriorate. MILLIONS. As I have stated for a very long time, those low quality domains are not assets, they are liabilities and the numbers over the next 12-24 months will prove it.

In my next post I will talk about the auctions at TRAFFIC. I bought more domains at the 2 auctions than any in the previous 2 years. The market was not priced for my business model lately and I made few acquisitions. That has now changed. So while the weak get weaker, the strong get stronger.

Have a GREAT Day!
Rick Schwartz

Comments

[Scott Alliy]

I cannot speak to monetization but only to end user sale. for those seeking buyers for their domain names I offer this

The man who hopes to make a sale must not whisper to a whale.

The one who hopes to make a dollar must climb the nearest tree and holler.

Translated promote promote promote

[Steve]

I think a lot of domain investors are falling back on their last profession to supplement any domain losses or shortfalls. Many people had the luxury of unlimited lines of credit and double incomes so speculating in this industry was affordable. Maybe now tighter budgets will open business owners minds to the power of keyword rich domains and the traffic they bring. Websites tailored to niche product sales with proper seo works. Websites with commission deals directly with suppliers has made the most revenue for me other than selling the domain outright. More work but it pays better and is ongoing revenue compared to just selling the domain name.

[Ozie Jackson]

You are right Rick. I started unloading a ton of garbage about a year ago. I now have a pretty good, lean and mean portfolio that I am working the hell out of with affiliates and SEO. I think I will make it.