Domains and the Economy
I had lunch with a friend today and we were talking about domains and the declining US economy. He had managed to pull his money out of the market (lucky guy) and was sitting on a bunch of cash. Well, considering what he can make in interest on that, sitting on it is a negative option right now. So, where do you play it?
He’s hot on domains. For the most part, domain prices have continued to grow. Part of the reason I think is because end users (developers or big companies) are hearing so much noise about domains right now that they’re finally biting. Another reason is because there are a bunch of new folks coming in wanting to become a ‘domainer’ (myself not excluded) and buying to get into the game. And third, I think early entry domainers are selling to each other and they have more and more money coming in with better monetization systems in place.
So what affect will the stumbling economy have? My first reaction is that prices will start to decline as some of the big companies begin to cut back on marketing budgets. You’re taking away one of the three buyer pools to some degree.
On the other hand, I think prices will stay the course on the ultra-premiums but the number of transactions will slow. The ultra-premium owners don’t need to sell. These domains are cash supercows. They cost pennies a day and produce thousands of dollars per year. Their value doesn’t drop. People are not going to stop surfing and if it’s something they really want, they’re not going to stop buying.
So, I wouldn’t expect to see prices dip on domains anytime soon.
