Domain Channel shrinking? Nonsense!

Morning Folks!!

I am hearing talk that the domain channel is getting smaller. That's nonsense. It is not getting smaller. It is expanding and changing and traffic is going to more diverse places, but not getting smaller. The way or what some COUNT may may make it seem like it is getting smaller but that is when you don't count the right way. Less domainers? Probably. Less renewals of worthless and idiotic domains? Probably. Is that a bad thing? If your boat has 500lbs of water in it, is it a bad thing to bail that water out to getter better mileage and have it go faster?

What is happening is some sectors are experiencing loss of market share because domainer's are doing everything they can to develop their properties on one hand and many are becoming their own registrars on the other. They are doing joint ventures. They are engaged in creative deals and transactions and leases. They are working and engaged and not relying on what worked yesterday.

In 2007 I sent about 95% of my traffic to PPC. As we enter 2009 that number is about 60%. It took 1 year to readjust 35% of my traffic to keep my income from declining as much as it could have and in some cases even rise. Payouts are down for some domains and up for other domains. Some parking companies are still innovating while others are not and some will disappear or consolidate or sell out. There is probably some real pain to come, but I also believe as they wipe out those that were in the business of abusing the system, the system will get stronger and payouts will no longer be strangled. Payouts are important whether you use ppc or not. This is what drives everything. More sales by better traffic and less crap is what is needed. Bail the water out because that water costs us all a LOT of $$$.

What was a 95% PPC industry is now in decline and THAT is the sector in decline and getting smaller. That is before I even bring Google into the conversation. But some companies are more innovative than others. Some understand domains more than others. Some have different views and ways of doing business. Some even have the potential to get stronger and take the business away from their competition. But to do that, you have to do something dramatic and bold. Business as usual means that each month you will watch your business shrink. The TRICK right now is to stabilize things and put yourself in a position to grow. If your numbers are flat for 2009 you are a big winner. If your numbers were flat in 2008 you would be earning a lot more today. The enemy is decline. So treading water in times like this is a great victory and successes are oh so much sweeter.

Being aggressive will be in vogue and that is why the domain industry is about to experience some huge growth. Again, it may not be on our timetable but after the collapse of 2002 it was domains that I always said would be left from the burning embers of the first collapse. Domains experienced great growth in value as soon as the market recovered. This time the growth and rewards will be much bigger and more important.

Domains as a tool are getting stronger and more important. The demand by END USERS is up. The demand inside the industry is much less important.

Times may not be good, but times have never been better for deal making with end users. That is why 2009 will be about going outside the walls and confines of the industry. Success will be found, just not in the same places and not with the same people.

Have a GREAT Day!

Rick Schwartz

6 thoughts on “Domain Channel shrinking? Nonsense!

  1. Johnny

    When I heard the domain channel was shrinking, I also thought something was askew.
    I personally am sending more of my domain traffic to eBay, affiliate programs, and actually some non-profits.
    End user sales may have taken a few big names out of the market for traffic, but I agree that more domainers are doing other things with their traffic. We’ve got nothing to lose by experimenting since PPC payouts are less overall than what they were.

  2. Scott Alliy

    Right again Rick,
    Change brings opportunity for those that recognize it!
    The new Presidents trend to be a friend of the world could pay big dividends to those like our company that hold Cuban domain names.
    Likewise onlien training will become more popular than public seminars and my company has captured the lions share of domain ns in that arena thanks to thinking ahead of the curve and not being caught up in the gloom and doom surrounding most of society and the world at present.
    I released an interesting article on this subject today called Creative Thinking Not Layoffs
    Have a read and share it as you wish with others who don’t believe what I know and as Napoleon Hill pointed out”Within every adversity is an equal or greater opportunity”
    Keep the truth points coming you are spot on (as usual) :-)

  3. Steve

    Great article and insight, as always! Generic’s will become even more valuable after this downturn. Hopefully registrar’s will stop grabbing dropped domains and holding on to them for themselves. Very bad practice, this should not be allowed, they should be selling and re-selling domains not hoarding, major conflict of interest.

  4. Mark

    Hi Rick:
    I gotta say sometimes you seem spot on and sometimes I think you are a huge cynic. Regardless, you have my respect and interest. I have a request. Wondering if you might write a bit about your thoughts on selling to end users. Certainly there are others who have written about this. But no one with your experience. Sure would be appreciated.

  5. mike cohen

    Rick, interesting views…
    Can you elaborate on this”The demand by END USERS is up”
    I think it is quiet the opposite and prices need to decrease further 5x to 10x from what most domains are currently priced at for there to be any real interest from the real end users, which are small businesses and not fortune 500 companies as many have always wished upon to come knocking on their door.
    Thanks.. Look forward to a reply.

  6. Kevin Davis

    I always like reading what the pros have to say.Good or bad its nice that the big boys are sharing info.It wasn’t like this a few years ago.Rock on Rick.


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