The Next Internet Collapse is Here…..NOW!

Morning Folks!!

In the days ahead and into 2013 expect a new round of dotcom bombs that will be shutting down and closing their doors or being acquired for less than pennies on the dollar. We are in the midst of a huge reshuffling of things and as companies sit down to discuss these things they are going to get out their shotgun and put these marginal websites down and out of their misery.

Nothing to be alarmed about. It isn't the first time this has happened and it won't be the last. But between December 1, 2012 and June 30, 2013 just don't be surprised or even change your game because of this. Completely foreseeable. Just another mile marker.

And again, for domainers with weak stomachs, stop reacting to yesterdays news and tomorrows pitfalls. Being aware of them is what gives you the POWER to overcome and defeat them and take advantage of the situation and weakness for those that do have weak stomachs. Go grab some tums and a doggie downer. The best days are always ahead. Cycles and tides are way too big to control. But you sure as hell can take advantage of them and harnessing them regardless.

Reality scares some and empowers others.

Have a GREAT Day!

Rick Schwartz

30 thoughts on “The Next Internet Collapse is Here…..NOW!

  1. Domain Shane

    A bad business plan is completely separate from a bad domain. There are way too many startups riding on fumes and a false sense of reality. The Internet just makes it easier for people to get their bad business plans off the ground. Content and the business behind it are the cake. Good domains are just the icing. The only people that don’t understand this are domain investors

  2. Jay

    @DomainShane – Rick’s post is not just about domainers. The value of your house or apartment is complex formula, where realtors behaviour is just small part of it. Same with Internet, .com value and domainers.

  3. Uzoma

    Following the same analogy as Real Estate, it simply boils down to locations, locations, locations.
    The only artificial barrier that we haven’t decided yet, is this, when it comes to search, is Google playing the same role for internet business names, and services, as yellow pages, newspapers, and television play for Real Estate, and other brick and mortar real life life business?
    I don’t think this issue has been explored fully. I browse through so many entities on the internet, by accident, and wonder out loud”this is awesome, only if people could see the dawn thing”.
    What would yellow pages be like if Ma Bell, with much criticism monopolized the phones, the lines, the service, and the yellow pages, was just as aggressive as Google? The comparison between Ma Bell, and Google, end in the monopolistic posture; Ma Bell rarely competed with the products and services, or played favoritism based on company size, or other panda, monkey, elephant, or some other weird, latent updates.
    What would Real Estate be like if Ma bell sold homes via the yellow pages? And placed their homes on the covers? Or changed parameters in mid stream?
    So, something has to be done about search. Something fair. Something that aim to promote internet domain names, rather than smother it. We don’t have that something today. I am afraid that many business and ideas will die on the grapevine until this is rectified.

  4. Uzoma

    I also wanted to add, actually remind those born before the digital age, that with the yellow pages, and white pages, names appeared in alphabetical order, regardless of whose address it was, or is, if a mom and pop is named Adam smiths Mom and Pop store 123 Main Street, it appeared before Walmart Stores 456 Broad Street. Then, it’s up to Walmart to take out a big ad on the page to advertise in a distinctive manner. That is not the way Google works. There’s no randomness, or fairness, only subjective calculation. Ma Bell’s yellow pages doesn’t care what your content, or style is, as long as it is not against the law. That my friend was America! Freedom. Fairness. Equality of Opportunity. We need it again.

  5. Puckerhuddle

    The internet affords business people the cheapest and most efficient way ever to test a concept or idea. Bad ideas and concepts are quickly weeded out by the marketplace and a winner can be explosive. Just check your emotions at the door, kill what should die quickly, run with the winner and deal with what I have always felt were the most difficult decisions, (a marginally successful business) as quickly as possible. As a late comer to the internet and domaining I see nothing by blue sky with endless possibilities. The biggest threat that there is to this world changing technology, would be what I call the (managerial class) that desperately seeks to control the freedom and opportunity on the net.

  6. Poor Uncle

    The best days are always ahead? Being 6 feet under is not exactly a good day. But I am with you all the way. Hope for the best, and plan for the worst.

  7. Shane Cultra

    Uzoma. It was also the reason every category had a business named AAA. AAA was black hat method of pagerank.
    I didn’t say anything about domainers until the last statement. I merely said that a failure in business is not a failure of a domain name or the domain name market. For every shitty business there are 10 more right behind it on the net. Changing technology as PuckerHuddle said, is the real enemy of the dot com, not success or failure of business.

  8. Rick Schwartz

    An address is an address.
    A location is a location.
    Dotcom has no enemy but ignorance and it takes 20 years to cure.
    Radio died 1000 times and still hot as a pistol.
    dot com is the lifeline of nearly every meaningful company on the planet.
    It dies AFTER the phone dies and neither will happen in our lifetimes.
    Not even technology. It will only grow to reinforce it.

  9. Tim Davids

    Shane, I disagree that the domain is the icing. I look at it as the concrete foundation .

  10. bodo

    As in the real estate industry … location location location
    Now, what has the real estate industry is currently experiencing in the United States in recent years, shows that there is nothing on this planet”forever”.
    The world belongs to those who think
    Of course, a will always be valuable, I doubt, however, that another 10 million dollars will be paid.
    The flood of domain endings will also be added to the. Com domains. think …. I think a rethink of the domain market needs. Especially so far received little attention in the future to gain domains are worth. Why? Each should make it have interest stand out from the crowd, if you still really unique domains (hack-domains) which can make happen is nothing better.
    In this sense, have a nice 6th December

  11. Laters

    @Shane….Ray Kroc, the founder of McDonalds, had the big idea that if you owned the best real estate possible you could sell anything on it, it did not matter what you put there , it would sell.
    Today McDonalds owns more prime physical real estate than any company in the world.
    He asked a class of Harvard students once,”What do I sell?”, and they replied back with the standard reply of hamburgers, fries, etc… He said,”No, I sell real estate”, meaning the location, not actually selling it.
    If you own the best property and what you sell almost does not matter, you’ll make money, but put some effort into it and you are way ahead of the competition because of the location boost.
    I agree, it is the foundation. I’ve always felt that way. When people have asked me why I don’t develop anymore, it’s because I am still scaling horizontally with the foundation, I can always scale vertically when I finally feel like it. The great opportunity of scaling horizontally and laying concrete easily won’t last forever. Others will show up in greater numbers.

  12. Rick Schwartz

    That is one of the most important things in business and few know or even understand.
    I learned about it in the 1980’s when i went to the International Council of Shopping Centers trade show in New Orleans. That’s when I learned McDonalds used Hamburgers as a”front” for owning the land. Even more impressive was that not only did they wn the corner the mall was on, but they owned the land the mall was on. They were more important to that show then they would be to a restaurant show.

  13. Laters

    @Uzoma….I found your post very interesting. Yes, something needs to change with Google. It will break eventually, in a way we may not be able to imagine now.
    I’ve been hearing that directories are making a big comeback. Don’t know if that is true, but it would make sense with how Google in manipulating results. Anyone noticing how the results are not as accurate anymore after the Panda update, especially if you are looking for a particular site it won’t bring it up easily by domain name, whereas will?

  14. Steve O'Brien

    Another timely post Rick! I think you are right on the money again. In most cases – when the market gets a bit soft – then it is time to be a buyer. Companies that are in the domains industry for the long run, use these”down turns” as a time to add to their holdings. I know we are everyday.
    Remember the years 2000 to 2002 (the so called dot com bubble)? That was when many of the larger domain name holders got their start. We see this period of time, as just another great buying opportunity that will not last very long.

  15. Adam Strong

    Why is there a collapse happening ? What companies ? I’m missing the general reason for this doom and gloom attitude Rick . I’m seeing a heavy load of inquiries and sales at the tail end of this year and that says good things to me. I know there’s a financial cliff thing going on but what are you seeing specifically please ?

  16. Kobe Green

    2013 will be a breakout year. Untold riches will be amassed for those with the right attitude.
    Stop listening to the doomsayers. They’ve been at it since time eternal.

  17. Farmer

    Never commented here before. This thread has some of the most important comments I’ve read in this site.
    Shane: as a online developer, you have a solid point. Content and business sweat is CRUCIAL — and yes, they’re too many startups that are built solely on”hot” ideas but weak infrastructure & foresight. But your final conclusion is incorrect — a step lower in importance. What Laters said is the Mojo in my experience :”If you own the best property and what you sell almost does not matter, you’ll make money, but put some effort into it and you are way ahead of the competition because of the location boost.”
    This is hardly a new concept as Ray Kroc famously preached. But still largely ignored. I see technology, online innovation and domains as vehicles that transport and scale business opportunities (like a corner shopping mall getting thousands of foot traffic)… but faster than I’ve seen in my life (and my business man father’s). But it has to be rooted in a strong foundation. A generic domain –(not as impt. if you’re Barbara Corcoran, Century 21 or Prudential) — A strong domain, I’ve seen, is my most efficient way to dip my fingers on a business opportunity i have no business being in.
    And the great recession of 2008, and consequent”soft” domain market it caused, has been the #1 instrument for me to scale my business out of my comfort zone, acquiring names normally out of my budget(ex:”Napa homes for sale”,” Lajolla real estate agent””San Diego Ocean Property” etc.,) Something that I had success doing in Northern NV 5 years ago.
    This is what it means to me what Laters said,”I don’t develop anymore, it’s because I am still scaling horizontally with the foundation, I can always scale vertically when I finally feel like it.”
    And next month, I’m off to San Diego, scaling vertically. What a great time the last four years and the next two. I’ve spent more money in domains the last 4 years than I’ve ever had in my life.
    P.S- To build responsibly”horizontally” I advise to make sure you have enough gas to move forward, avoid running on”fumes” as Shane put it. If you do, make money of previous acquisitions first. Build or sell to end users. But keep best names for future development.
    Rinse and Repeat.

  18. Craig

    Most of the world has yet to notice, or care about the absolute control the search engines have over information flow.
    Be you a politician, military leader, corporate prince, or worldwide brand…….one click and your gone! (or your everywhere should you be in favor)
    This should be the hottest topic of the day………I mean, who’s watching these kingmakers?
    Forget SEO, that’s just a dance that ends when the band goes home.
    If the pen was mightier than the sword, THE ALGORITHM TRUMPS ALL!

  19. Steve

    “A strong domain, I’ve seen, is my most efficient way to dip my fingers on a business opportunity i have no business being in.”
    I’ve done this several times and existing business owners are scratching their head’s wondering where all this business came from that they were apparently missing. I’ve even walked into many of their offices offering the sales leads for a measly 10% commission. The usual response if”why do I need you, that customer will call me anyway”.
    I’ve taken those leads and hooked up with smaller companies that see the value of the leads and the small 10% commission. Been making $$ ever since.
    Generic product or service related domains bring in sales. We’ve been using them for a long time and they consistently produce.

  20. Kassey

    Forecast with a short time frame is difficult. I’m sure not what Rick is seeing on the horizon. As the debt-ridden world has not started paying down the debts, collapse is possible. When it comes to investment, the late John Templeton’s advice is what we should always remember: buy at the maximum pessimism. Rick is right. There will be good bargains to pick up when panic comes.

  21. Clovis

    Yes yes, so goes the chant.
    Nothing more amusing than watching ‘domainers’ gearing up for the next big thing; that day when they finally bring it all round and ‘develop’!
    Pay no mind to the fact that essentially none of these clowns have professional backgrounds in much aside from stumbling about on lifes margins, going bankrupt, getting locked up, scheming and/or playing the lottery when a spare buck is at hand. Give them a few domain names and suddenly, we’re regaled with their grand plans filled with buzzy terms like”verticals” and”scaling” and”synergies” even though these same people couldn’t verticalize, scale or synergize their way out of their monthly preowned Honda Civic payment.
    The lucky few dirtbags who get to subsidize their comically awful domain name decisions (which we see year in, year out) with 1996 low hanging fruit are really no better. The only difference is louder shirts and crasser watches. You want proof you can’t buy class? You don’t have to look very far.
    If your big plan is to”develop” then stop talking with this group of idiots who are roundly mocked and laughed at in every single circle who actually makes the internet tick. If your objective is to be the worlds finest woodcarver, who do you listen to? The man standing beside a fine wood carving that he just made, or some asshole standing on top a log in a Hawaiian shirt, hollering about what a great carving it might one day be?
    The Great Tech Pound-Out 2.0 has been happening for the past two years. Amusing that some are just now figuring it out. Being a bullshit artist isn’t enough to punch your ticket aboard the life raft. You either bring skills, you bring capital, or you get no seat at the table and you’ll have to make due living life as a ‘blogger’.

  22. Michael

    Craig if your information is any good other websites will link to your site and you won’t need search engines. That is another way the internet works hyperlinks!

  23. Kobe Green

    Clovis, I’m no psychologist but I sense some unresolved anger in your post. Are you”okay” buddy? Do you feel that you’ve missed out on this”domain name game” and are taking it out on those of us who had the smarts and forethought to seize the moment?
    You seem to take pride and ease in mocking us”domainers” when I doubt you really know any of us. Rather than living on the fringes, you’ll find that the successful domainers are right in the thick of things. For instance, we all may poke holes at some of Rick’s ideas, but there’s no denying the success he’s had in domaining. When you have the purchasing power Rick does, you can afford to buy and wear any kind of Hawaiian shirt you please.
    Some of use”domainers” even have or had perfectly respectable jobs in the professional sector before we came upon this. If I told you what I used to do you’d be mildly surprised.
    Regardless, I do domaining almost full time now because of the opportunities that exists right now. Sometimes I have to pinch myself.

  24. Scott Alliy

    Overlooked in all of the comments is the lack of initiative of most people. Those of us Rick who go back to the day before Internet understood how hard it was to communicate a business message, introduce a product or service (aka marketing). Despite the lack of affordable connectivity to consumers we trudged on in faith. Today there are a varitey of free Social media platforms upon one can communicate with thousands for virtually no cost yet where are the end user buyers to buy (or in the case of your new plan) lease a great domain name and start a business that can be promoted internationally instantly and for free?
    Figure out what has most people paralyzed and do something about it or wait for world events or cosmic change to unfreeze the would be domain buyers and business owners is all we can do if you ask me.
    My chips are on the new GTLD program because I beleive that the program has the key ingredients for successful investment profits.
    Size, intrigue, gambling opportunity, and the scope invokes fear of loss emotions (one of the most powerful emotions) from folks who may not want to miss out on the next big thing.
    After all what else can the GTLD program really offer … opportunity? As if there is not plenty of that already with just the available unused or undeveloped premium dotcoms?
    It’s the people… unparalyze the people, give them hope and direction and they will rise … are you listening Washington? Nah (nevermind your busy packing for the hoiday break I am sure)
    and the cliff watch continues LOL
    In the end I believe like you and others that GTLD promotion and hype could be the best thing to ever happen for dotcom investors as it brings light and attention back to the names we own and the value they possess.

  25. John Colascione

    Glad to hear your not at all worried about these new names. Let’s all watch them rise and fall. Only question is will it all happen in a year or more.

  26. bodo

    Sorry again … I’m no expert in transactions domains … but in real estate.
    Therefore, the following comparison:
    we are in 1960 … an experienced city in the United States or in Europe the economic upturn. Stadtkern in the real estate prices rise very rapidly. Best addresses at top prices!
    Roads are being built … many cities get a freeway .. the traffic becomes denser. To many cities over the freeway was built. Prices for homes fall because the traffic on the highway now runs past town.
    We are located at 2013 …
    large cities will continue to have top real estate addresses. But, who knows the real estate market looks, always top new addresses are created in the world, if there are islands in the sea, or city in the desert … the market recognizes it!
    Whether. Com or other”Old-level domains” … if new can prove convincing and the market gains on a solid foundation, will be just in the future adopted”new”, especially when festgellt that was forgotten at TOP domain ADDRESSES expand the attics, thus cause new top addresses ..
    Furthermore, a great 6th December

  27. Switches

    The only artificial barrier that we haven’t decided yet, is this, when it comes to search, is Google playing the same role for internet business names and services, as yellow pages, newspapers


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