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DM Confidential is a leader in the Affiliate marketplace. The DM Confidential Newsletter and web site is focused on the online marketing industry. To read more from DM Confidential visit: www.dmconfidential.com

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The Domain Shakeout

Written on
February 1st 2008
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by DM Confidential  |
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mouseclick1.jpgFor an industry that generates billions annually and operates much today as it did ten years ago with many of the same people as then, outside of the occasional article, little coverage of the domain name landscape occurs. Only when something sensational happens does the domain landscape pop up on the media radar. Fortune, for example, recently covered the domain name auction at the DomainFest Global, and as mentioned in the article, given some of the prices, you wouldn’t think we’ve entered a recession. Buyers there had no problems shelling out five and six figures for domains even when many who purchased them hadn’t the slightest idea what they would do with them. Apparently, lack of planning doesn’t stop millions of dollars from changing hands in a single afternoon. Had you attending the show in Los Angeles you could have had the chance to purchase domains such as Bookmarks.com, Photograph.com, and SoapOperas.com. While it might be too late now to acquire Porn.net which sold at the show for almost a million, attend the Las Vegas domain show T.R.A.F.F.I.C. (after you get over the admission sticker shock) and you can have the chance to bid on EscortServices.com or the more industry relevant CPC.com. It’s especially relevant in the domain space as per click ads have provided, despite the two to three times a year sensational piece on domain sales, the majority of revenues as well as providing a proxy for pricing in many cases.

All in all the domain space moves relatively slowly; a parked domain page such as that on romance.com looks not that dissimilar from how such undeveloped sites looked years ago. As premium names have long had owners, the past four to five years in the domain space has focused on acquisition and monetization, specifically in the long tail of names, where individuals and companies look for type-in traffic first and resell a distant second. And this long-tail revenue from parked domain traffic dwarfs all other activity. The problem naturally is that it’s hard to find a domain name that makes its money back and then some. For fun, do what we did and register 20 domain names that you think might get type in traffic. You’ll be lucky to find one, but then you might do what we did and end up getting an offer for one of our names that covered the little bit we used in the beginning. Either way, it shows you the difficulty in entering the domain space, especially as more names get taken daily. It really is a scarce resource where volume exists on the margin but it requires a way of sifting through the shale. Those close to the domain space received an inadvertent gift that has since become a hot bed, a means by which those with connections to a registrar could register a name and then return it within five days. Thanks to this, the connected and well healed domainers could grow massive portfolios with much less risk. But, that’s about to change.



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