After spending a week at the ICANN Meeting with 2,000 + people which are pouring over a Billion dollars into the domain name industry, I read the piece in Forbes.com by Deborah L. Jacobs, who is a self proclaimed “woulda coulda shoulda” kind of girl who still dreams about all the money that was sitting on the table in 1995, 2005 which she missed and is still missing today, trying to figure out how to fit all of her “worldly possessions into a carry-on bag“.
Ms. Jacobs took the opportunity to write about the domain name industry concluding “After The Gold Rush: Domain Names Have Lost Their Glitter”.
However Ms. Jacobs seemed to rest her conclusions on the domain industry on the results HA.com auction that was held in New York on Thursday and the $500K domains that sold and the volume of high dollar reported domain name sales in recent years
Ms. Jacobs apparently does not read TheDomains.com otherwise she would know that a representative of escrow.com who handles the escrow on more domain name transactions than anyone else recently reported that they process a total dollar volume of domain sales that greatly exceed the amount that gets reported saying; “we close in some weeks more dollars in domain sales than what other company’s report in sales for the entire year.’ Ron Jackson of DnJournal.com, reported that $25 Million in domain sold in the last quarter that were reported
When asked what percentage sales actually were processed through Escrow.com, compared to the reported amount of $25 Million dollars, Ms. Hill answered after a lot of hesitancy, two to three times that amount.
Ms Jacobs also completely ignored the 2,000 + people that were meeting at the same time at the ICANN meeting in Argentina who have already spend 1/3 of a billion dollars just in applications fees for new gTLD domain names whom are expected to spend over a billion dollars to acquire the domain name strings and market the new domain extension in just the next couple of years.
The Forbes.com article contains a quote from Weston Anson, owner of CONSOR Intellectual Asset Management, whom in my 15 years in the domain industry, I personally have never heard of, quoting him as saying:
“Your domain name is far less important than it was a decade ago,”
“Search engines are much smarter so the domain name doesn’t matter as much as the meta-tags embedded in your website”
“And with the number of top-level domains expanding (they now include .net, .info and .org, to name just a few)”
Hum
As far as I know .net and .org domain names were around before 2000 and .info was delegated in 2003, so none of those really qualify as a recent development, certainly not in Internet Years or even Dog Years.
But lets not get the facts in the way of a good story.
Now if Ms. Jacobs or Mr. Anson wanted to chat about the new gTLD’s that are coming out for the first time later this year, next year and for the years to come and the effect they might have on the value of existing domain names, well that would be a story.
But that is not the story that was written.
At TheDomains.com we have covered the possible implications of the new gTLD’s will have on the value on existing domain names for several years before and still there is no one in the domain industry that KNOWS what the effect will be.
Its really interesting that the week that so many gathered in Buenos Aires to make deals, do business and get ready for the biggest expansion of the Internet since it was a just a glitter in Al Gore’s eye, Ms. Jacobs chose to ignore all of that and go all in on the whole domain name industry based on the results of one domain name auction of thousands that are held every week.
Hum
As they say here down in Argentina; No Bueno
Back on earth, the largest registrar in the world Godaddy,com just changed their entire website around the new gTLD’s which have a registration price of up to $1,199.00 well beyond the typical $10 cost of a .com.
I’m not sure if that was a wise move, but they are the ones that took in Billions in VC money.
At the same time, the largest registrar in Europe, 1and1.com just completed a $50 million dollar advertising campaign for new gTLD’s domain names while my little company MostWantedDomains.com, just sold a measly $300,000 + in domain names last month.
So as I fly back from the ICANN conference on Monday night I will have to admit all of my worldly possessions will NOT fit into one carry-on bag.
In all honestly, just my wife’s shoes that she brought to the ICANN meeting, won’t fit into that one carry-on bag.
Sorry.
Neil Young released After The Gold Rush in 1970.
I was 12.
The Gold Rush hasn’t stopped since.
I’ve sold $462,500.00 worth of domain names this month. None of which were reported publicly. Domain names are strong as ever.
“But lets not get the facts in the way of a good story.”
but it wasn’t a good story. it was written like a high school journalism report by someone who obviously had no idea what they were talking about. “forbes’ should be ashamed of themselves.
I wonder if Mr. Steven Forbes should not get an email from you asking to comment on this story. He is still the editor-in-chief of business magazine Forbes magazine as well as president and chief executive officer of its publisher, Forbes, Inc.
Harry
Will give it a go
Michael,
That was well said.
larry
Steve Forbes was a speaker at the T.R.A.F.F.I.C. several years ago
Now I’m impressed:
http://www.deborahjacobs.com/
Her bio on Forbes.com
I’m a Forbes Senior Editor with an entrepreneurial spirit. Having worked as a lawyer, I gravitate towards legal subjects, especially law as it intersects: personal finance, the workplace and small business. My latest book is Estate Planning Smarts — a guide for baby boomers and their parents. This contributor’s page will cover the broad range of topics that affect boomers as they approach retirement age. That means everything from financial strategies and investment scams to working and living better as we get older. But I’m not just talking to readers; I also want to provide a forum in which they can communicate with each other. Some of my best ideas grow out of these conversations. If you have story ideas or tips, please e-mail me at: djacobs [at] forbes.com. You can also follow me on Twitter and Google+
The sad part is she claims to ‘cover personal finance for baby boomers’ but still can’t see the investment opportunity that is staring her in the face in her own writing! If she had bought luxurybags.com for $40k, she could then use it to sell ‘luxury bags’ for $40k a pop. If that isn’t an underpriced investment, I don’t know what is.
Shane did an interesting article on how domains are probably the most undervalued marketing tool out there. Now if the mainstream actually understood this, they’d be breaking down the doors on their way to invest in domains.
Sadly a lot of them will, but in new gtlds since a lot of marketing spend will happen in that space, and mostly without any research, where they might end up losing their shirts as extension fan boys are wont to do.
Well as an analyst she should be aware of the index when she reports on an industry
http://www.idnx.com/
225,000 sales comps makes for pretty reliable data.
And that of course doesn’t reflect all the private sales, NDAs etc.
Which anyone in the industry knows is clearly the trend. It takes a lot of extra work digging through SEC filings to find some of the bigger ones that can be discovered that usually go unreported but are yet discoverable.
And with the kind of big tickets sales getting reported just in the last month, she clearly missed an opportunity. Which apparently she admittedly has a bit a knack for doing.
Domain auctions have rarely produced any big winners in recent years. Its not where the market is.
The market is selling directly to end users and startups. And they rarely go to auctions.
The auction may precipitate a sale with an end user at times, given the deadline created for securing or possibly losing a domain to another party however. But the real market is dealing directly with end users on an industry by industry basis. And usually the larger the industry, the larger the ultimate sales price.
Nonetheless, her article was entertaining as a personal story, even if it ultimately lacks in actual relevant data. It may reflect the impressions of people not too familiar with the industry. Or maybe its somewhat accurate about the status of the auction portion of the industry, which has moved on from speculators to end users. Perhaps the real glitter that has been lost, is simply from the point of view of not investing years ago. It would have been nice to buy AAPL at 10.00 and held wouldn’t it? or PCLN under 10.00 in 2002. Could have bought the same private jet by now, and maybe even a private island or two.
Michael,
Although, I agree with your premise that 1 billion will be spent to acquire all the names, I am not as confident of the impact that it might have. Most of that is headed towards filling ICANN’s bank accounts. At least that is what it seems like given what I heard in ICANN this week.
I have no doubt they will try to find a way to spend that money on noble causes. However, unless ICANN reinvests a little bit of that money in promoting the new G’s, that billion could have no effect on the industry.
On the other hand, if applicants finally decided to do private auctions with companies like RightoftheDot, or Applicant Auctions that money would stay in the industry supporting all the TLDs (even the existing ones).
For the record, .CLUB Domains has worked with both of the companies mentioned.
Colin.club
Mike, I bring a different perspective time than either the journalist or individual domain investor. Lost in all the debate is the simple fact that there are nine measurable value points to a good domain name. Resale and application aka blog or in my case training search engine. Instead the conversation gets confined to the power of the google monster. Sad! One strong and soon to become even more important value point of a good domain is its memorability or brand strength. There is no way, NO WAY, that your fathers google can remain the same and be of much value to businesses vying for the coveted top three spots as millions of new domain extensions come to market. Apps, forget it… I have less than thirty apps and can’t tell you six of them. Social media, lot of talk, but where is the avg joes proof of ROI?
In the end the value of domains if the GTLD program has a ghost of a chance to succeed will be on people understanding and believing the value of a brand domain name in terms of prospects and customers ability to remember, use, and share their domain name aka website address. The level of understanding belief and successful application of using their domain name to build a strong memorable shareable brand will determine the value IMO
The 1/3 $billion is money squandered on red tape and provides no benefit to domain owners or consumers. Whether the much lauded coming 2/3 $billion will provide tangible benefits is also highly questionable.
There will certainly be many innovative people looking to recoup the initial $1/3 billion and some. Whether most have a product which provides user with real competitive advantage as opposed to speculation schemes has yet to be seen.
We are already seeing the downside of new gTLDs through more and more rules as the powerful vested interests try to mitigate real or perceived (depending on which side of the fence you sit) damages they feel will ensue as a result of new gTLDs
New rules like URS and the latest attempts to protect/restrict IGO acronyms etc. After some of these new gTLDs crash and burn we will undoubtedly see familiar faces at ICANN looking to change the rules yet again.
And we can all guess who will loose out – domain registrants and small businesses.
and .info was delegated in 2003
If you’re going to complain about others not getting their facts right, it’s probably best to double check your own sources. The 2003 date in the linked Wikipedia article refers to when the .info domain started supporting second level IDNs.
Shows how confusing all those new .’s are going to be; and that’s from someone closely involved in new gTLDs never mind busy consumers.
Most business persons & tech/biz journalists outside of the Domain sphere know little about domains. I’d be surprised if 10% could even tell you anything about the gTLDs. But ask the gentleman who changed the name of his streaming company from some forgettable neologism to livestream.com, and he’ll say it was the best $100 K he spent, or the founders of peekaboo.me who couldn’t get their app off the ground until they changed the name to snapchat.com (they went from 400 shared messages/pix to 2 million in a week). A name’s just a name, unless it’s a good name. As for a very good name…the world is what you make it.
@Berkens,
Don’t piggy-back the new gTLD on the back of .COM
Everything that happens, good or bad, you try to link the new gTLD people to the Domain Industry.
We have not decided if the new gTLD stuff is part of the domain industry or not.
So, stop linking’em. You guys should do your own stuff, and leave .COM, and the real domain industry out of it.
And so it begins. All the journalists who seem to consider themselves expert are going to have a great time churning out such stuff. Just on that idea of how one gets started (registering a domain and hoping that someone might want to buy it in the future) is the rock on which many a wannabe has perished. The history of domaining is littered with such wrecks. But her idea (“The easiest and most low-risk way to get into this market is to create a domain name, pay the nominal fee to register it, and hope that someday someone will want to buy it.”) is no different to buying a lottery ticket and hoping that it will win. Domainers generally don’t share that approach and if they do, they don’t last more than one or two renewal cycles. Real domainers research.
The value of a domain name isn’t just in its resale value or the percentage of domain names in that TLD that have been sold. The value does not exist in isolation. It is derived from a combination of registration volume, development, usage and the money that people will pay for what they think are premium domains in that TLD. And it changes over time. Those of us who work in the domain name industry are still not sure how all these new gTLDs will work out simply because they have not launched yet and we have no real data yet. It is nice to see that non-expert journalists have all the answers though.
@Domainclature
thats tellin’ em.
dude seriously are you like 16 years old?
Superb, Mike. One of your best!
Thanks Owen
Aron from Heritage Auctions has replied to the article here: He is seeing the long-term and his reply is very professional.
http://symbolics.com/my-thoughts-on-the-forbes-article-from-aron-with-heritage-auctions/
This may be an opening for a second Forbes article on the domain industry, one from an inside perspective. If so, it is a reasonable point for discussion how new gTLDs will be presented vs established premium domains. So much interest is currently been focused on the new TLDs that it it seems they are really important to the entire industry, long term. That has yet to be seen.
The one thing people seem to agree on is that ordinary domain investors take on a lot of added risk in new gTLDs. For Forbes readers who are looking to invest money to make a profit, premium .Com domains are their primary market. And perhaps a premium or two related to their industry to increase their traffic.
So whoever gets tapped to write for Forbes — remember who you are writing for.
“In all honestly, just my wife’s shoes that she brought to the ICANN meeting, won’t fit into that one carry-on bag.”
lol.that was a great reply Michael.
I am happy that (Forbes.com) Deborah L. Jacobs is not my financial advisor.
Good article Mike. This crap wasn’t fun the first time and is still a giant turd no matter how they polish it. Let’s get back in the time machine and return to 2013…lol
Excellent rebuttal Mike, nicely done
@Scott Alliy – “Social media, lot of talk, but where is the avg joes proof of ROI?”
BINGO!
Q: With their multi-billion dollar valuations, what did Facebook, Twitter and the other media darlings ever give back to their members?
A: Bubkes. (That’s Mohawk for ‘not a pinch of coon shit’)