Long Term Declines are Likely in Domain Traffic

It appears the great success of Smart Phones combined with the strong impact and heavy usage of Apps has already done considerable damage to typein traffic along with browser-based search traffic too. Things will no doubt get worse as the mobile market expands even more.

In addition, once the new unlimted .tld’s start resolving that too in all likelihood will have a negative impact on traffic going to .com and other extensions since so many large websites will have their own tld and people will start simply typing-in that new tld instead of doing a search or typing in dot-com, etc. A random example is websurfers who will go to LasVegas rather than Lasvegas.com or bother to do a search for other las vegas websites.

This is all very distressing and disturbing news for domainers in general and especially for typein traffic domains and websites (including sites which rely heavily on search-engine traffic). Unfortunately these new development look like generating domain/website traffic from typeins and search is well past its peak of a few years ago and is quickly becoming a long-term bear market.

All of that negativity to traffic/revenue potential combined with ever increasing renewal fess (i.e. just discovered my Moniker account .com renewals went up to a high $8.99 today) makes it quite likely more and more domaine operators will let much of their portfolio expire or possibly even exit the business starting this year.

Nobody on The Road… Nobody on The Beach…

Written by Frank Schilling

There is something about the end of summer that feels so very similar every year. The end of summer, of fun and frivolity always comes at the same time and echoes, like the lyrics from a Don Henley song. Aptly named “Labor Day” is like a starter’s pistol at a collective social race that has been programmed to begin through years of grade-school, college and university. Everyone around the world does it. Fighting the urge to be productive in September is like swimming against an unstoppable tide of human behavior.

A different more fearful tide of behavior continues to play out before us. People have come to the realization that the economies of the World are poised to get worse before they get better. Apparently printing more money to paper-over problems doesn’t work! I certainly believe that to be the case. Much of our economy today is powered by the Ponzi-scheme of government dollars recycled to the private sector, then recycled back to government. We have America, Greece, Portugal, Spain and others on food stamps. There are 20 million people in the US working for the Government, basically paying no tax. A government employee’s tax bill is just a return of cash back to those productive members of society who gave it to them in the first place. We have millions more on government social security and Medicare – all draining the system – taking more than they contribute. This is playing out in Europe, in America… everywhere.

I believe the US is facing difficulties, orders of magnitude greater than its recent financial downgrade. I noticed it in Malibu of all places, where for the first time I saw not only a dead-head sticker on a Cadillac, but also men, holding signs, begging for cash, at Cross-Creek and PCH (a celebrity studded shopping district North of LA)! There were many more regular-looking people and even women standing on corners throughout Los Angeles (not just the usual corners) with “need-help” signs in hand. The usual corners near freeway ramps had many more people standing on them, begging. Storefronts were closed and some stores had downsized even on Rodeo Drive.

here is a strange inflation and parallel deflation occurring. Certain people are charging more for goods and services and chalking it up to inflation, while earnings fall or disappear for the industry in which they participate. Millions of people like you and I have not come to terms with the difficulty ahead, wrongly thinking things will soon get better. There is a great re-organization upon us where whole industries are going away. Cash is being printed by governments to prop up unsustainable routines which just shouldn’t exist anymore. The no-confidence vote of the world’s productive members of society is reflected in the price of gold which has soared since I suggested you buy some back in 2004. Those who followed my lead nearly quintupled their money.

Gold will be 3500 – 6000 an ounce in a few years – either that or it will stay at 2000 and the DOW will fall to 5000. You can diarize that remark as you did my last. Gold of course is just another human behavior which men fight at their peril. Just a shiny metal without an intrinsic use… just like the tide of back to school, back to work mindset… and just like the rush for .com names which work just as well as .nets .info’s and .whateveryouwant. To return things to a domain context, no amount of new TLD’s are going to diminish the value of the human behavior gold standard – .com .. used.cars will not knock 20k in value off usedcars.com. It will increase the value of usedcars.com and set a permanent floor to its value. Make those words as you did my gold remarks in 2004, fight them at your peril.

Millions will be made and lost in the New TLD casino, on both sides of the table. We are creating a machine to enrich strangers, with a nebulous and unknown outcome for the participant. Most at the table agree it’s better to have tried and lost than to never have tried at all. I am not 100% sure I have the right answer for you, but it could be that the biggest winners at the new TLD table are those who buy the best SLD’s in each space. One recurring theme of all namespaces is that a TLD is only as good as the best SLD’s in it. If you buy the best second level names in each space you can do better than the registry itself. The .COM space is a good example. The top 10 million generic domain names in .com are worth more than Verisign. Only 5-10% of all the names registered in .COM are generic or meaningful in any way whatsoever.

Newer spaces such as .INFO have seen even fewer good names with perhaps 1% of the .INFO space being worthwhile to anyone whatsoever. I could see just a few thousand good names per string in almost all new TLDs – a collective few million worth anything whatsoever to anyone.. and the demand fall-off being almost TOTAL after that.. Unlike .com which has “some” low dollar demand for $250 multiword strings, there will be ZERO demand for longer strings in new extensions. Better to be the registrant of the best SLDs than to embrace the clerical misery and competitive marketing-hell of running the registry itself. Only the deepest pocketed and most brave should walk down this college fraternity hazing gauntlet or roll the dice at this table of monsterous uncertainty.

The Internet Traffic business is at its annual low as I write these words. People are gone fishing and the economy’s ad dollars sit on the shelf in-wait, soon to be applied to dormant adwords accounts. The back to school rush will see millions of new, refurbished and toolbar-free laptops fire up in unison. Type-in traffic will spike. Ad dollars will spike. We will build to a crest through January, propelled higher by the Black-Friday shopping season. It all kicks off with Labor Day and we will be there soon enough.

My hope is that the upstream ad-marketplaces (Yahoo and Google) will redistribute those returning dollars, pari-pasu, to the “partners” in the syndication engine-room, who are helping to move the ship forward. If they decide to skim off the top to “make their quarter” at the expense of those assisting below, I see genuine discord for the ad-marketplaces and difficulty keeping traffic next year. Like an abused spouse, Tina is two blows from stepping out of the limo and walking away from Ike once and for all. If the upstreams reap all the returning autumn gains at the syndication channel’s expense, I see platform abandonment ahead. I’ve heard it from too many partners and in too many quarters for this not to be the case.

More than in previous years, this is a season to be the squirrel – to gather nuts for the cold winter ahead. It’s a great autumn to “take the deal” and build a cash cushion to see you through in case this winter and the economy are colder than in previous years. I am advocating that all our partners save more of their earnings and build as big a cushion as they can muster. Higher renewal fees for .com names in January will bring discontentment in February as registrant margins get squeezed. Upstream partners will need to recalibrate their payouts to those partners doing the lifting downstream to compensate for the name renewal price increases, or risk losing their partners to alternative and unorthodox monetization implementations promising more revenues.

I expect that “pressure to pay more” on upstream ad markets will intensify because of the new TLD process. That process will put negative pressure on existing SLD name sales, which have been a crutch for low PPC rates over the past 2 years. Early next year, name buyers will wrongly question the value of existing .com/.net names against a barrage of press extolling the virtues and vices of new TLDs. The trifecta of a more difficult economy, lower traffic revenues from the Verisign price increase and lower name-sales due to the sideshow of the new-tld process will cause pressure on re-sales. It would be an Orwellian Animal-Farm moment to see Google and Yahoo crushing the numbers this February as the domain-industry plays the role of the horse in the engine room, turning the wheel for less and less revenue. I just don’t see that working any longer. So the takeaway for you all is to sell more of everything NOW and save it, then have that cushion so you can buy some courage to change partners or try unorthodox methods if you need to next March.

Despite that gloomy prognostication of what could come I remain hopeful that we have seen the collective low for traffic payments in 2011. The market and fixed expense reality simply dictates that type-in-traffic is worth more, and it is not equitable that any middleman takes a majority of a product which is produced. There are flat-rate shops buying traffic at higher levels. Walmart is a buyer. Target is buying traffic directly during the Black-Friday period. It’s a short curve of logic for those monster retailers to buy that traffic all year long. Walmart buys everything from Sundried Cranberry snacks and Garden hose directly through their buying center in Bentonville. I have been there and have seen that process in-action when I sold Walmart video game joysticks and gamepads 15 years ago. It is illogical that domainers wouldn’t eventually line-up at this same location with blocks of tens or hundreds of millions of unique monthly visits, if the existing paid-search marketplaces get so greedy that the model of selling to those marketplaces becomes unsustainable.

In the end, the method which we use to implement domain name type-in traffic is not under our control. Upstream traffic marketplaces need to decide how much volatility they want to tolerate in their keyword marketplaces and how much value they ascribe to it. A healthy channel simply dictates that those who generate the traffic, need to ride along in the success, otherwise the market becomes volatile and ultimately, undone.

Yahoo: All .US Country Code Names Poor Quality!

A very interesting subject on the-web is that ALL .US extension domains are banned by the Yahoo feed under the title of Quality Block. Several pay-per-click parking firms who use the Yahoo PPC feed have confirmed that to be correct, and said yes, Yahoo thinks every single .us domain must be poor quality and thus are banned. Isn’t that an incredible wide-ranging assumption to make!

It’s been an issue for at least 2 or 3 years from what we understand. It appears both Yahoo and some of the parking firms who have been given our .us domains to monetize using the Yahoo feed in-effect keep it a secret and allegedly simply assumed we would not notice the fact we always get zero income from our dot-us country code domains.

It’s amazing there has been basically no discussion we have seen about this serious issue. It would seem like a major internet player like Yahoo allegedly hating its own country-code domain extension to such a degree as to ban them all from pay-per-click revenue should be major news and discussed at length in the media. Instead, it appears to be stonewalled with nothing but silence from most everyone, including the media, other domain blogs and the forums.

Property.com/Properties.com vs Buying a New TLD

Breaking News: Rick Schwartz sells Property.com & Properties.com for $4 million plus stock. Of course, congrats to Rick on his latest amazing domain sales.

That great domain name sale got me seriously thinking about something I have been dwelling on for a long time, which is the potential impact of the new gtlds, which will be coming online as soon as 2012.

What I mean by that is that since the .property and .properties tld extensions can be purchased for $185,000 each (plus other fees and expenses) it makes the 185k cost look like a great bargain (at least to me), compared to spending millions on the dot-com domains.

Think about this for a minute, would you prefer to own property.com at a cost of a few million dollars, or buy your very own ‘property’ extension for less than 10% of the dot-com price? At this time, some of you may say property.com is best but I feel that view is mostly because so few realize the great impact the new extensions will have in the future. In fact, I predict they will eventually dominate over other tld extensions.

A reason I say that is I am sure most all large and possibly mid-size corporations (maybe even some wealthy individuals) will buy their own extension. After a while I feel it is likely they will decide to brand under their own extension instead of the dot-com.

For example, assuming Ford buys .ford and also owns ford.com, don’t you believe one day they will switch their online brand to .ford and simply redirect ford.com to .ford? Keep in mind, dot-ford should be able to resolve stand-alone, depending on the server dns setup, so you can just typein “ford” to your browser and it will resolve. Same is true for “property” and “properties.”

So again, why spend millions buying the dot-com when you can buy the word without the .com to the right of the dot for 185k? Also, keep in mind, that cost is expected to drop sharply in a few years, well below 185k.

An excellent example of the benefit of going right-of-the-dot vs left-of-the-dot is the acronym domain-name “POS.COM” (a somewhat obscure acronym intended to mean “Point Of Sale”) which has me wondering why anyone today would offer almost a million dollars for pos.com when for “only” 185k they can as an alternative possibly purchase the .POS extension.

Another example is cars.net which sold for a staggering $170,000 last month according to dnjournal.com. The reason I say ‘staggering’ is since it’s a .net extension it will lose a good share of its traffic to .com from typeins. That’s a big reason dot-net is considered to be such a poor choice for a business and branding is difficult.

Wouldn’t it make much more sense for the buyer of cars.net to spend just 10% more and apply for the ‘cars’ tld? Can you imagine the powerful value of owning .cars tld vs cars.net! There really is no comparison when you consider how a business could easily brand themselves as ‘cars’ and tell everyone just typein the word ‘cars’ (and forget about adding .com or .net).

One more example is “StockBrokers.com” that recently sold for $185,000, which by coincidence is the exact same price as buying .stockbrokers extension.

Think seriously about this, wouldn’t you really prefer to tell websurfers to just typein “stockbrokers” to reach your website vs the longer “stockbrokers.com” There are many other examples where the cost of buying their own tld extension would have a lower cost vs buying the high-priced dot-com domain, and also make more sense for overall branding purposes.

As a cool monetary benefit, and option, you will also be able to sell to the left-of-the-dot names for extra income to enable other brokers to buy a domain such as TopBroker.StockBrokers.com, for example, plus you can sell unlimited numbers of other domains to the left-of-the-dot since you own the right-of-the-dot. Isn’t that interesting!

Major Dilution to Existing .tld extensions i.e. .net

We have been writing for some time about the massive dilution to the current major domain name extensions which will be caused by the anticipated vast number of new gtld’s expected to be introduced starting in 2012.

As an example of dilution, we will discuss the long-time well known dot-net extension. It’s always played 2nd fiddle to the vastly superior dot-com however .net will soon have lots of competitors competing with it and causing general overall dilution to all extensions and to dot-net in particular.

The initial high Icann cost of $185k to buy your own extension will no doubt result in mostly the top brands or keywords being purchased at this time. However, we are sure the cost will drop a lot and more and more mid-size or non-famous brands and keywords will eventually have their own extension.

Using dot-net direct competition as an example it’s likely extentions such as .met (dating?), .let (EU rentals?), .pet (pets?), .wet (water/pools?), .bet (gambling?), .get (search?), .jet (jet sales?), .vet (veterans?), plus longer ones like .mynet .enet .inet .netgear and the real obvious .network will be taken in the future.

With so many similar potential domain name extensions all competing for Internet traffic and marketing themselves it would seem after a few years the direct dilution just to the old dot-net extension will result in many people saying ‘dot-who’ about dot-net. Therefore, we can predict the already low value .net domains will decline even more in general value.

Major Bear Market Expected for Geo Domains

Starting next year unlimited numbers of new domain extensions are scheduled to be sold and some will be up and running. We always assumed major brands such as .sears .apple .microsoft .hp .godaddy .ibm and many others would want to own their own extension, not necessarily to sell domains but for their own product, use and branding.

Now I am hearing many reports about large U.S. and international cities including the cities of .tokyo .sydney .london .newyork .sandiego .la .vegas and others planning to also buy their very domain extension. At an initial cost of $185k it may seem high to you or me but to a large corporation or big city it is not too significant a cost.

Having heard about many major cities with plans to buy their own extensions it would seem logical the end-effect will be to greatly devalue the domainer or investor owned geo dot com’s, including mid-size city dot-coms. The smaller or mid-size cities may not want to invest now or be able to budget $185k but they will likely do so as the ICANN price drops (and I am sure the fee will decline rather quickly and dramatically within a few years).

At that time I believe you will also see many mid-size cities such as Palm Springs, Bethesda, Burbank and Scottsdale for example, getting their own extensions. It’s also possible they may not wait for lower costs and instead apply soon, agreeing to pay the 185k ICANN fee.

Think about this scenario; A visitor (or resident) in Scottsdale Arizona knows many cities now own their own domain so would he be more inclined to typein to a search box or the browser window “Scottsdale.com” or the word “Scottsdale” without an extension? In our opinion there is little doubt as time goes by the word Scottsdale will prevail as the most popular choice, relegating Scottsdale.com to 2nd tier status, which dot-com decline would be ongoing and the scottsdale.com down-trend be more pronounced as time goes by.

In our opinion, this news marks the beginning of a very significant and long term bear market (a likely permanent major drop in geo domain values), impacting mid to large city Geo domains in particular. I would expect a number of them to go on the auction block soon before they decline more in value.

Massive Dilution caused by New Domain Extensions

We have been saying for years (starting when the new extension plan was first announced a long time ago) the new domain-name extensions will bring about massive dilution in the name space and overall negativity to the value of the current major domain extensions.

In a few years the cost of buying your own extension could easily decline significantly belowr the current high cost of almost 200k, possibly all the way down to the 3 figure range where most individuals and small businesses could also afford to buy their own domain extension.

A huge benefit to owning your own domain name extension is only the extension could be typed-in (depending on how the DNS is setup) and the visitor would go right to that website based on the extension only. A few examples are by typing in Ebay you would not need to typein Ebay.com, or typein FreeMLSlisting and no need to typein FreeMLSlisting.com (and potentially zillions of others too).

Eric Borgos Interview by Michael Cyger

We can highly recommend this interesting and educational interview with Eric Borgos conducted by DomainSherpa.com and expert interviewer Michael Cyger: Eric Borgos interview

RunningShoes.com: from $150 to 700k in 5 yrs

DNjournal.com reports that RunningShoes.com sold for $700,000 making it the year’s biggest sale.

To add to the news reported by Ron Jackson, this blog can report the domain name sold for a measly $150 in 2005. Isn’t that amazing!

From low 3 figures to high 6 figures!

A Recently Discovered Quality Domaining Site

Just finished listening to the new DomainSherpa.com interview with well-known domainer Justin Godfrey. Just in case you are not familiar with DomainSherpa.com it’s a relatively new site operated by Michael Cyger. I have spoken to Michael and listened to his informative and educational series of interviews.

By the way, Michael has excellent interviewing skills. His interviews also benefit nicely from their length since they are 1-hour or longer which time allows Michael and his guest to cover a lot of information in that time (compared to much shorter Youtube videos).

It’s also quite interesting how the video interviews are of such good video quality from a basic service which most of us probably already have on our computers. After seeing how good the split-screen videos are I asked Michael about the technology thinking he must be using a top-quality video production system and was surprised the video quality is from Skype.

The most interesting part of the latest one-hour plus interview was how Justin Godrey purchased the domain name Snowmobilers.com for just $500. The name had an equally surprising low asking price of only $900 which Justin received in reply to his email. I doubt I would even bother try to get a better price as he did with that amazingly low initial asking price.

How is that possible when the name is likely worth so much (I would estimate at mid-5 figures or more). Justin was certainly lucky with that one. Why does that kind of luck never happen to me?

Will GoDaddy’s Super Bowl Ad be a Success?

Godaddy is spending a ton of money on their Super Bowl ad and other heavy .CO marketing but will it make the .CO extension (.CO is actually the South America Nation of Columbia country code) an Internet success?

In our opinion, it’s already apparent .CO will be a flop as far as long-term value goes, and actual use. There are very few .CO developed sites and it has a poor resale market, with rare sales (except for occasional sales of strong single word names).

With that said, .CO is already a big financial success as far as registry and registrars income is concerned, thanks to brilliant and costly marketing, defensive registrations and domainers who can’t get the .COM and think .CO is a good replacement for speculation purposes.

A big hope with .CO was the anticipation of .co getting substantial ‘typo’ or ‘spillover’ traffic intended for the .COM but I can tell you from good first-hand experience that is not happening now, and is also extremely unlikely to occur in the future.

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A slightly modified version of this article was published today in Fortune Magazine & CNN Money

Learn How Many are Searching for Your Domain

If you have your domain names registered at Godaddy.com you have the unique ability to discover exactly how many people are looking up your Whois information on the Godaddy site. This is very cool.

I am starting to think it may even be worthwhile to use Godaddy more simply to take advantage of this powerful feature. Knowing how many people looked up your Whois information can have major benefits, not the least of which is it can indicate how many possible buyers you might have and you can rank your domains in value based on the number of Whois searches performed.

For example, say you have a low traffic and lightly searched term but suddenly you see several Whois lookups. That can indicate there may be a buyer for your domain or website out there, possibly an end-user who will likely pay a lot more vs a typical low-balling domainer. It’s hard to understand why this very cool and great Godaddy feature has not received more publicity, or other domain registrars apparently do not offer it.

This is how you can discover the number of Whois searches performed on your domains using Godaddy: Go to the Domain Manager, mouse-over the Tools tab at top and click-on Exportable Lists. Next click on Add New Export with a drop-down list. Select All My Domains and click Next.

Now you can select the data to export. Check-off exporting both Current and Previous Period Whois Searches, and click-on Next. Then select CSV file for use by opening your Excel spreadsheet program. Probably no need to compress the data so select “none”. Give the exportable list a Name and click-on Finish. After a few minutes GoDaddy will compile the list and email it to you.

Buy a domain name or order website hosting by going to the Godaddy banner below:

In 1994 Katie Couric Didn’t Know About Internet

Back in 1994 people like Katie Couric had a hard time understanding or explaining what the Internet was!

Importance of Owning Your Desired Domain

Domain names are extremely popular as far as owning a website with that name, and its potential use as a business presence, marketing venue, e-commerce site, blog, email address and for information and product marketing. Obviously, there is only one exact name which is truly your most desired domain name available or for-sale, making it unique.

You probably realize the high value of owning a good domain and you surely don’t want someone else using “your desired domain name” and getting visitors looking for the domain keywords, the exact search term, or its URL, which visitors could have gone to your website, right? Why in the world permit another potential buyer to acquire your most desired available domain-name of interest and allow competitors to get site visitors going to their site, which visits you could have received instead?

There are a number of businesses and people with interest in also buying and developing your most desired domain, with some potential domain name users being quite well known both on-the-web and in the offline world too, including individuals and small, mid-size and large business owners in various businesses.

For a real-time internet-search to see “your desired domain name” and its search-engine and web-page popularity of the exact search-term, please do a Google search and search on the keywords (wrapped in quotes for exact search-term results) of your desired domain name (using spaces between words), consisting of your desired domain name (but without entering the domain name extension, i.e. .com .org etc).

As a side-note, it’s sometimes interesting to view the Google results when you combine the words without any spaces between the keywords. The results will be much lower vs using spaces but nevertheless it may be informative, especially if the number of search returns for the words without spaces are considerable.

Read about your most desired domain name

Negativity by Paying Domain Broker Upfront Money

Sometimes domain name and website owners may wish to hire a domain brokerage to sell their names or websites. I can give you some good advice (gained via my personal hands-on experience) about that, including a warning about paying any upfront fees to the broker.

Keep in mind, once the domain-broker has your money a good degree of the incentive to work hard and sell your domain or website may be lost since the broker already has his/her money, regardless of the name selling or not selling.

One more potential negative occurrence is the once friendly relationship you had with the broker may quicky go away if there are any business or personal issues involved. That can easily happen as a result of the broker already having your paid in advance monies so he may decline to issue a refund if you are later unhappy with his work and perfomance.

More information about why you should never even think about paying a fee in advance to a broker (which we published over a year ago) as part of a post about the category defining premium domain names LiveApp.com plus LiveApps.com both being available for purchase, located here: About Domain Broker and Live App domains for sale .

A good article about domain brokers was recently published in Elliotsblog.com in which Elliot lists domain name brokers. I know several of the same domainers/brokers and can suggest the following domain brokers, which Elliot listed in his post:

• BigTicketDomains.com – Kevin Leto
• DifferentInvestments.com – Justin Godfrey
• DomainBroker.com – Rob Sequin
• DomainsForMedia.com – Eric Rice
• MediaOptions.com – Andrew Roesner
• NameConnect.com – John Daly

By the way, Webtrading also offers a domain brokerage service (mosty for our own websites but the brokerage service can also be used to buy domains belonging to other parties), which you can learn more about by clicking-on the image below. In addition, any comments you may have about selling domains and websites, or regarding domain brokers will be appreciated.

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