Frank Schilling sent out an update the other day to customers of InternetTraffic.com and as usual was a brilliant piece, written in a way only Frank can.
The letter made an obvious reference to the comments of Rob Hall of Pool.com that I wrote a post about the other day and therefore I asked Frank permission to republish his update in part and he kindly agreed.
In my opinion it is a remarkable post, possibly the best piece I have read in years. A piece that everyone one in the domain community needs to read and then read a few times more. (It would hurt for those outside the domain community to read it several times as well)
I highlighted some of Frank’s verbiage in bold; those thoughts not only need to be read, but digested over and over.
You need to think about what is being said.
Seriously.
and finally here is the post from Frank:
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. There 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 $3,500 – $6,000 an ounce in a few years – either that or it will stay at $2,000 and the DOW will fall to 5,000.
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.
Mark 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 bestSLD’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.
You can read older updates sent by Frank to Customers of InternetTraffic.com here
I believe prices of .Coms will skyrocket along with Gold. The new gTLDs will not do much.
There is a lot of good advice in Frank’s post about domains. Not so much about the general economy.
Frank is forecasting a disaster scenario of either hyper-inflation: gold at $3,500-$6,000 an ounce, or an economic depression: the Dow at 5,000.
The language is strong including “Ponzi-scheme”, “paper over problems”, and “difficulties orders of magnitude greater”.
Looking past the rhetoric to the substance of Frank’s argument his concerns seem to focus on lack of faith in the dollar and/or an economy that is crippled by excessive transfer of wealth to non-contributing members of society, described as Government workers and those on social security and Medicare.
What could cause hyper-inflation? The value of the dollar and other major currencies depends on people’s faith in them as a store of value. That faith has been tested as the US leaders of government have betrayed Americans by adding trillions of dollars of debt to the US deficit and by the mismanaging by the financial leaders of the pillars of the financial system: Fannie Mae, Freddie Mac, Lehman, Bear Stearns, AIG, S&P, Moody’s, Bank of America, Merrill Lynch, etc.
The US economy went into recession, the banks that caused much of the pain were given hundreds of billions in tax-payer money, and the average citizen was left to suffer.
It is understandable that this pain and anger leads to concerns about the future of the US and World economy. Frank expresses many of these concerns in his post. This pain and anger also led to the rise of the Tea Party. But unprocessed anger doesn’t lead to good economic policies, and the Tea Party is standing in the way of the policies that will get us out of this mess faster.
In spite of all the shocks to the system, in spite of this betrayal, the anger, the huge deficits and the S&P downgrade, the borrowing rate for the US Government is at its lowest rate in 50 years. This doesn’t signal hyper-inflation.
The Federal Reserve could inflate our way out of the trillion dollars we owe to the Chinese, but they don’t seem inclined to do so. They aren’t pursuing more major stimulus spending, and inflation is quite low.
As to the changes of a major depression that would drive the Dow down to 5,000, what would bring that about? Frank doesn’t say, but he expresses concerns about people draining the system and making it less productive.
The world has changed a lot in the last ten years. China, India, Brazil and others are bringing into the world economy billions of people who are now much more productive than they ever have been. They now have more purchasing power and demand for goods of all sorts is growing. The Internet, as we know, is unleashing a wave of creativity and new businesses.
As Frank says, there is a great re-ordering. A lot of productive capacity and human power is sitting idle waiting to be put to work as the economy starts growing again. These are not ingredients for another depression, but for another economic boom.
I’m not an economist, and I don’t claim to have a crystal ball. Frank isn’t either, but he is claiming to have a crystal ball. One can choose selective anecdotes to make whatever case you want about the future of the world economy. When Nobel-prize winning economists disagree, the opinions of amateurs probably aren’t worth much.
I’d stick to Frank’s advice about domains where he is clearly an expert.
IMO the man is simply saying sell (product, goods, services) as much as possible now as the markets (money, cash, credit) will dry up. The .com is “strong” do not leave yourself in the position of not having the money to renew.
I will not, do not disagree with the proof of the pudding. The same simple advice on a blog I follow (nothing to do with me)
http://www.oftwominds.com/blog.html
Remember Frank Schilling does not have to say anything, Thank you FS.
the predicted price fo gold sounds a bit too high
@Nat,
You are flat wrong.
Many of these same “economists”, these same “theoreticians” never saw the 2008 crash! All these “economists” should be fired ASAP.
Nat, reckless policy is destroying the US economy.
This reckless policy, designed to facilitate government spending and appease Wall Street financiers, will continue to starve Main Street of the capital it needs to make real productivity-enhancing investments.
American investment capital will continue to flow abroad, denying local business the means to expand and hire.
It also destroys interest rates paid to holders of bank savings deposits which traditionally had been a financial pillar of retirees. In addition, such an inflationary policy drives real wages lower, robbing Americans of their purchasing power.
The consequence is a dollar in free-fall, dragging down with it the standard of living of average Americans.
Until interest rates are allowed to rise to appropriate levels, more resources will be misallocated, additional jobs will be lost, government spending and deficits will continue to grow, the dollar will keep falling, consumer prices will keep rising, and the government will keep blaming our problems on external factors beyond its control.
As the old adage goes, “insanity is doing the same thing over and over again and expecting different results.”
On another note, gold is more than just another precious metal. Gold is a thermometer for the economy. And with increasing gold prices, the economy isn’t getting any healthier.
Gold going up every day is saying that the economy is sick. It’s really, really sick. Yet, world leaders are ignoring the surge in gold prices as if the increase wasn’t telling them something.
As central banks continue to print money while currencies devalue day by day, owning gold is a safe haven. Gold is an alternative to owning currencies like the US dollar, the euro and the yen, which he are being created too quickly and in too much quantity.
I keep hearing people on television saying “people aren’t buying gold because of inflation.” My opinion is that gold is a safe haven from inflation.
the only thing people have to worry about is the devalue of currencies, which continue to go down in value while gold only goes up. It’s not a bubble because gold is not going up. It’s paper currency that’s just losing value. Gold is simply letting you know that it’s occurring.
Most people would accept gold in exchange for goods. Gold is money; it’s recognized around the world.
I agree with Frank, people need to realize it before it’s too late.
Frank’s world view is very simplistic – bordering on completely uneducated. For those who are interested in learning more on the economy, and what makes it move, I encourage you to read Karl Denninger’s writings at TickerForum.org.
People with a large number of .COM domains and high-profile .COM names
will soon be able to PAY AGAIN.
ICANN draws High-Rollers out and they paint a big target on their backs.
In 1998, ICANN was formed to move an academic (IANA) into a corporate structure. That was supposed to help end the academic run-arounds and the back-room-deals.
If you were to read archives closely from 1998, the idea was also to use ICANN as a Cheerleader, as a vehicle to pull people into the platform. That is how some
of the legal loop-holes emerged, Proof.of.Concept is a big one.
Unfortunately, many
stuffed suits stepped in and redefined the platform and placed themselves into the
cash-flow streams. Despite their back-room-deal-making system, people were
still pulled into the platform. Some of the academics have been diluted.
The stuffed suits imposed a Client-Server (Cntralized Registry) model. They
now plan to pull more (new blood) into their MLM scheme. There is a FALSE
presumption that the incumbents somehow “own” the legacy name.spaces.
.COM .ORG .NET are cash cows. Who really owns .ORG ?
In parallel with the inflated auctions and cyberspace grabs, there is a need
to RELAUNCH .COM .NET and .ORG with new companies. The Peer-2-Peer
DNS model will be used. No auctions or grabs are required.
While noobs are distracted by the ICANN Cheerleaders with new TLDs and
auctions and endless debates and conflicts, the Smart.Money will be…..
Selling to the Market…
It will be interesting RE-Registering 75,000+ .COM domains to ensure they
are in the P2P DNS. Ten million .ORG owners are waiting to be serviced.
Why waste time and money on ICANN’s latest game for noobs?
Why be a pawn in ICANN’s game ?
You can own part of the .COM Registry and laugh all the way to the bank with ICANN and Verisign. They do not have exclusive rights to the 80+ million
.COM Registrants. You can service those Registrants.
“Better to be the registrant of the best SLDs than to embrace the clerical misery and competitive marketing-hell of running the registry itself.”
===================
Better yet, why not WAIT for a TLD to mature and then pick the low-hanging-fruit along with ICANN.
Look at what ICANN is doing. For $185,000 a .COM can hang out a sign: “WE ARE a BIG BRAND”
OK Mr Big Brand – Pay again and again to be resolved in the Peer-2-Peer Set.Top.Box DNS
Pity the .COM owners who do not pay the $185,000 UPGRADE. They will end
up in the .COM Ghetto and not be resolved OR their traffic will be intercepted by the Set.Top.Box. Consumers will be asked if they really want that non.Big.Brand domain.
Thing is if you “sell more of everything NOW and save it” and then the dollar devalues, your holdings after tax and inflation will be worth less than they currently are, even though it might mean temporary liquidity.
And tbh, as an citizen of the much touted BRIC growth world I must say that if the the US Dollar depreciates, all the ‘progress’ we have won’t amount to much given that our currencies are as dependent on the strong dollar as the rest of the world.
I also don’t believe the average joe domainer will have much of a chance to get the top 1% slds in the new extensions, we all know how that works.
@HornJacker – FS is almost godlike when it comes to predicting the domain market, you won’t find many people in these parts who think otherwise.
Might seem simplistic but the best things in life usually are pretty simple till the suits get their hands on them.
I’m about as likely to trust a stock broker / analyst for investment advice as I am my neighbourhood barber.
When you travel all over the world (like me) and in tune with all kinds of culture besides the ego centric self serving BS hypocritical American foreign policy, you know why this USA(Uncle Sucker America) is going downhill.
god
Yes, I hope gold hits $20K/oz and I can cash out the 2lbs of gold I am hoarding.
Remember folks, India and Chinese esp Asians, they always give gift in gold and they have lots of gold in their house.
For domain, heck , it is just a BS word scrabble game. You got money, you can buy.
“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.”
=====
The CASINO industry has many good comparisons to ICANN. One difference is in the USA State Governments reserve the right to License/Franchise a Casino. Yes, the American Indians sometimes get a special break (like ccTLDs).
ICANN has grabbed the high-ground on rights to License YOU. They claim that
is because The.Community grants them those rights. The.Community is a very
small group of insiders. It is all circular self-defining. Sock.Puppets empower
other Sock.Puppets. Governments sit and watch.
Is it illegal to bamboozle a massive number of people? (in cyberspace)
The.Insiders claim it is all new territory, this CyberSpace thing. They continue
to add to their MLM – Multi-Level-Marketing pyramid scheme…
“creating a machine to enrich strangers” ? or The.Insiders ?
@TheBigLie Society — you belong to the “BullS” family
Frank is so right. I think he gets his information from that whacky guy’s blog. Watch out for those crazy geese, they lay golden eggs.
@BullS
RE: the “BullS” family
====
People call those types of web-sites PURE.PLAY Internet
There is no product, no pair of shoes shipped to your door.
There is no service related to the real world, such as car insurance.
Goog is one of the more famous PURE.PLAY sites.
The new Peer-2-Peer DNS will also be PURE.PLAY – it will build on the existing
base of 10,000,000 .ORG Registrants and also on .COM and .NET “owners”
ICANN (ISOC) has built a PURE.PLAY MLM – Multi-Level-Marketing machine
@TheBigLie Society
express yourself via Domains–that the best marketing theme from Godaddy.
@BullS
“express yourself via Domains”
=====
Many people will not believe it but DNS is not required to operate The.Internet
It just happened to be a database technology that The.Insiders adopted to carry
out their various LOCK.IN Schemes.
The.Insiders are now so magnanimous they will sell you YOUR brand for $185,000 and $25,000 per year. Those same insiders chastise governments
for considering how to tax the Internet. The.Insiders already tax you.
If you want to see jaw-dropping margins, check out The.Insider’s RIR IP Address Space Leasing companies. Billion dollar spectrum is tossed around.
ISPs sub-lease a single IP address for $10 per month (Pure.Play) which puts
the value of large blocks into 10 digits in value. TLDs have not hit that yet.
Frank has been wrong several times about the general economy and the stock market, but is NEVER wrong when it comes to domains.
I love Frank’s writing style…”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.”
Love reading Frank’s posts!!!
The.Insiders are starting their efforts to DERAIL the new TLDs program…
english.aljazeera.net/indepth/opinion/2011/08/2011828730595666.html
“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.” (above)
The ICANN Board could easily call the entire thing off at this point in time as they start to see the various marketplace responses to their latest schemes.
Peer-2-Peer DNS can continue because it does not need ICANN’s approval
Frank’s world view is very simplistic – bordering on completely uneducated.
—
No, his view is a foundational, fundamentalist one.
There is an economic theory (and counter-theory) to support the existence of any remotely plausible position. It’s what props up maniacal pricing in good times. “All those retirees moving to Florida…” Still, there is no getting away from fundamentals. They ring true like a constant, in all economic conditions, in spite of large groups of people insisting that they no longer apply (and having a battery of ‘economic theories’ in tow to articulate why) At the end of the day, the theories die, but the fundamentals never do.
For example, pointing out our current devolution into a welfare state (with imbalanced producer/consumer rations and stratified wealth) has very little real time implication- the trains still run, the water still comes out of the faucet- but 20 years from now, it will be recognized as a huge macro issue that precipitated a lot of negative things we have yet to endure.
I’m not a gold bug, I don’t know if we see gold 5K or not (maybe we do… The pricing trajectory is certainly there) but I agree with pretty much everything the dude said.
Oops
rations = ratios
Nice article – thanx for sharing!
Attention Please! Do you see Google buying them?? No Way! Again I say the new gTLDs are malarky. ICANN is looking for suckers and the naive.
I’m afraid Frank is correct about Gold. I have been buying since it was $400 an ounce. I also bout Google during the Dutch Aution IPO and I also bought LinkedIn.
I even own 5 Gold domains for sale and I see offers everyday more and more.
My solution to the economy although no ever listened is the US/Fed should have paid off the mortgages NOT the banks.
Our economy would have normalized and S&P would have been happy.
“Attention Please! Do you see Google buying them??”
====
Google bought into the ICANN Registrar scheme
That gave Google DIRECT access to the .COM Registry (an expensive merit badge?)
Never under-estimate The.Insider’s ability to Sell new Schemes to Themselves
As the market changes, NEW Technology may ONLY be available to the Big.Brands on a Non-Disclosure Basis – ICANN is selling $185,000 Reputation Insurance – other .COMs will be excluded
If you want to hedge your bet on which end of things the US economy is going to end up at, develop premium domains on both sides of it. My business partner and I are pushing forward with http://www.CheckingAccount.com on the banking side and in a few weeks we’re launching http://www.GoldBullion.com in case gold does hit $4K an ounce. There’s just a temp site there now.
My best advice, develop your names. The ones that don’t warrant development park, lease or re-direct (when it’s applicable) to your names that have development potential. If the US economy goes into the absolute dumper major advertisers will be less interested in parking traffic.
Large companies are making acquisitions regularly because for them, this is the cheapest money this country has seen in nearly 100 years. I know everyone was buzzing about BankRate’s acquisitions. But they don’t buy anything for a lot of money say $1M+ unless it’s developed and driving traffic and revenue. CarInsuranceQuotes.com had a pretty big footprint when they bought it.
Develop your names. It’s the best hedge against economic disaster.
“Higher renewal fees for .com names in January will bring discontentment in February as registrant margins get squeezed”
“more difficult economy, lower traffic revenues from the Verisign price increase”
————————————-
Verisign’s monopolistic pricing practices & price increases (enabled by ICANN’t) must be halted…..above and beyond the ICA’s efforts to fight this via lawsuit (which ceased due to no more ICA funding)…. I’m still a bit amazed that more efforts & inroads have’nt been made (at least they’re not so evident) by the largest domain holders to stop this blatant price bilking…as well as a ruling/order for domain holders & registrars recoup past unjustified overbillings via a penalty ruling or court order….
As conveyed last month on this blog, the case & allegations vs Verisign still distinctly have merit
personally, I believe that the world economy crisis can’t go more down than that it is now, so, these pessimistic predictions, shouldn’t become true
great quote here.
” Develop your names. It’s the best hedge against economic disaster “
Forget figuring out the economy and forecasting what’s next. It’s become too complex for anyone, even the brightest of economic minds, to know certain.
Keep it simple. Focus on the here and now in your own little world and space.
Create or buy for $1, sell for $10. That is the proven simple formula for generating money and wealth since the beginning of civilization that has and will always work no matter what.
🙂
‘So the takeaway for you all is to sell more of everything NOW’
Pretty much what Rob Hall said, isn’t it?
Frank is about New gTLDs from an investor context only, not considering end users. Gold is an instrument that holds value only, not used for much else. Domains are employed, by more people every day.
Rainbow Construction of New York maybe cannot afford to buy gold, and so cannot afford $3,188 for RainbowConstruction.com
They might have to settle for RainbowConstruction.NYC instead, at $20 bucks. It’s brandable, meaningful, locally targeted, and cheap. Will look good on business cards too. On that they’ll build their site. They would like to have the .com, sure. But the price will be prohibitive for them. Someone else will pay $3k for RainbowConstruction.com. But there can be only one. Every other Rainbow Construction that wants to build a website will have to find another name.
Tom
Rob said to sell everything now because it won’t be worth anything later
Frank is saying the economy is going to tank, registration fees are going up in January so make sure you have the funds to get you through until the sun shines again
“sell everything now because it won’t be worth anything later”
===
If the EARTH poles melt in the next 24 months, people may not be focused on domain names.
BRICS currency is coming along with virtual banking and Peer-2-Peer DNS
People may want to attend one of the (invite only) seminars in the Caribbean to plan your future. The future is bright for those with the right connections.
Steer clear of the ICANN games.
Big
I think that made 8 comments by you on one blog post
That’s 7 times more than me
This is the reason you got banned the last time.
“I believe that the world economy crisis can’t go more down than that it is now”
LOL… Well I dint know where you are from but in the united states we did these things called QE1 QE2 (quantitative easing 1 and 2), basically the federal reserve had cart blanch authority to print money out of thin air. They have printed more money then has ever (I mean ever) been printed before… Trillions of dollars.
Strange thing about American dollars, since it is the world reserve currency… we need NOTHING to back it up. We can print on the promise that we will repay. No other country really has that ability.
Anyways, point being is that it takes a few years for that money to trickle through the system. When it does you will see inflation (more money chasing the same amount of goods and services), i.e. the dollar is worth less.
Now, this part is going to happen… what ever, we have all seen inflation of some sort in our time.
The question is, with the baby boomers (the largest section of people born around the same time that America has ever known) all retiring (they already started), and they are going onto fixed income (retirement) how is inflation going to effect them? It may just put them on the Government dole and cause more stress on the economic system.
Also, you have to consider that they American dollar will be worth less and as we go to repay out debts with money that is worth less… how will the other countries respond?
Will they attempt to discard the dollar as the world reserve currency?
If they do, what effect will that have on America?
How would that ripple effect play out on the global stock exchange?
Look at what havoc, Greece, Italy, Libia, Egypt… ect. have already done and they are no where near the world dominating force that America but yet they have a huge ripple effect.
If you want an idea of something that happen within our or maybe our parents lifetime… Look up the term Hyperinflation and the Weimar Republic (Part of Germany) in the 1920’s. Hyperinflation has also happened in the 1940’s-1950’s
I am just saying… it could get worse.
Just my opinion.
Cheers.
pearls of wisdom as always from FS… thanks for sharing!
Remember folks, the next 10 yrs, 75% of the US population will be 60+ (MHB included) and home care services will be the top priority.
So get your home care domains now!!!
@TomG
“Rainbow Construction of New York maybe cannot afford to buy gold, and so cannot afford $3,188 for RainbowConstruction.com. They might have to settle for RainbowConstruction.NYC instead, at $20 bucks.”
The huge BS problem with gTLD’s is very easy to see…
Why RainbowConstruction.NYC?
what about …….
Rainbow.construction ?
RainbowConstuction.home ?
RainbowConstuction.Service?
RainbowConstruction.NewYork ? (yes, there exists an entire State outside of NYC),
RainbowConstruction.WHATEVER
Too many, it’s diluted with too many possibilities. If ICANN is “opening the flood gates”, there is no clear cut extension to go to for these smaller brands. Thus, why .COM/.net/.org remain the anchor. Everything else is noise.
That is absolutely right. Seniors will comprise 70% of the population. Here is one of the best domains for Seniors.
BS
Thanks for the reminder
@BS .HOSPICE ?
@M
Yes, I can see that. Just did a search for ‘rainbow construction’ and it is interesting. Several different exact match TLDs in use, and several close match .com’s.
So it occurred to me, maybe really, this works nicely for everyone. .com remains the gold standard, and most valued. But with the massive growth in domains, new businesses need to find an address too. Those that can afford the .com premium do so. Those that cannot, either look for a close match .com, or move into the .net,.org OR New gTLD space.
The market is enormous. Room for everyone.
“so cannot afford $3,188 for RainbowConstruction.com”
So if they cannot afford $3k, can they afford to lose business?
Do you want them to build your home?
If a company is well established, then the company will do what it takes to get that reputation which includes getting the best domain.
This is the post of the year?
I respect what Frank Schilling has done with domains, and business in general, but many of these thoughts and opinions are way over the top IMO.
Brad
saving money in hyperinflation = burning paper
makes sense?
I have always said..” The only constant on the Internet is change.” This time the change is going to be the most challenging one we have seen. Frank hit it when he said the circus is in town.
Very good Frank – Orwell’s Animal Farm – I am going to run with it more.
#1) unify the masses by preaching equality and distribution of wealth (all non.coms) by kicking out the current government (.com)
#2) and once the government (.com) is gone all the masses (non.coms) turn on each other as mortal enemies in order to create a NEW goverment (.com)
Hypocrisy
I admire Frank, but he’s speaking from a viewpoint that is based in owning hundreds of thousands of domains, mostly set to make PPC income, which has become a joke. I’ve consistently stated for a decade that domain values have to do with end user purchases (which could be a domainer). I know that Frank has focused a lot closer on domain sales lately.
What was covered here by several people in the comments , amazingly, was where the BLAME lies. Eight years of lies, deregulation, WS greed, intentional fraudulent moneymaking schemes regarding mortgage “insurance” trading, recommendations by the “most respected” of the investment firms, which many are out of business or have been bought by other investment firms, many directly responsible for the financial mess we’re in today.
BOTTOM LINE FOR EVERYONE’S FINANCIAL TROUBLE CAN BE TRACED TO THIS: GREED and FRAUD.
The greed I understand. The fraud I don’t. What I don’t understand is why none of the perpetrators of this devastating financial ruin (those who also took their “bonuses” from billions of taxpaper dollars) haven’t been indicted. Why is that? Is it because the global financial system is controlled by those who know all the tricks, and they all cover each other’s backs? Their golden parachutes are ready.
Frank, God bless him, thinks we all should save our money — easy to say when you’re making money and can afford to put something away. Frank seems that maybe America, along with other countries, are going to sink because they have “entitlement” programs. However, these programs are feeding those who are out of work, can’t find work, can’t work, don’t want to work or whatever. They’d like to feed their children and live a basic comfortable life.
Either way, history shows that entitlement is just a stopgap measure to prevent the poor angry masses from rising up and rioting against those people who scammed the system to become very very rich. I’m sure GW Bush, the “silent ex president” will appear on more demonstration posters than any particular person. I’m sure most Americans would love the trillions of dollars back that was (and is) spent to establish Iraq”democracy” and see Saddam hung.
Sooner or later, if the economic world for millions of Americans gets worse, and 40% of our population reaches poverty level, those riots will start. I’m sure that those lucky people who have lots of money and live on their own island will be well-prepared for the marauding hordes of starving humans.
The truth is, when the time comes where there is economic collapse beyond all reason, gold won’t be worth anything either. Water and food will be the big commodities, along with guns and ammunition. You’ll have to have all of those things to survive.
(Just kidding here folks! I’m writing a treatment for a sci-fi screenplay I wanted to test out on you readers! It could never happen!)
Stephen
Lets not forget about spending trillions fighting two wars and yes we still have troops in 150 countries around the world including 50,000 still in Germany.
http://en.wikipedia.org/wiki/United_States_military_deployments
and before you tell me its only the kids from poor families that serve, Judi’s son Jeff is in Afghanistan where he so two of his buddies set on fire last week.
The US is still building roads to nowhere, supporting airports that get 100 passengers a day and in 1,000 other imaginably wasteful ways.
Moreover 1/2 of the population does not pay $1 in federal income taxes.
“”Water and food will be the big commodities, along with guns and ammunition. You’ll have to have all of those things to survive.””
Agreed
“”Water and food will be the big commodities, along with guns and ammunition. You’ll have to have all of those things to survive.””
====
It also pays to have your own island and satellites.
An aircraft carrier just off-shore can serve as an airport.
Invites to the right meetings with the right people also help.
Bring your VISA card – because American.Express is not accepted
FREE advice from domainers – priceless
@Stephen
It seems over the top or just political bias to essentially make broad brush statements essentially blaming ALL on the Bush Admin…. To be clear the finincial picture, “mortgage market” and stock market worsened & turmiol accelerated right after the Dems took control of Congress & Senate…Hmmmmm ….not an opinion here, but a clear Fact
The current Admin is actually much-much WORSE and damaging and even many in the same party are clearly fed up (I am an Independent)….and look at all the improperly spent TARP & stimulous mone spent unwisely, questionably and mostly ineffectively …. the bulk of it essentially mispent & WASTED (as eveidenced partially by highest unemployment scenario ever)…and the US taxpayers & unemployed are licking their wounds from it big time !
…..and FYI Wall Street & hedge funds arena is loaded with Dem’s & liberals too…it’s not by any means a Republican/conservative regime there…. it’s a mix of the good, bad n’ ugly.
As for the water, food and guns point…I agree with you there
Interesting thread here.
I actually think Frank is more right than wrong. In fact, Frank and I sat together in South Beach some months ago during the TRAFFIC conference and discussed some very similar topics. Fast forward to today and precious metals are correspondingly a whole lot higher than they were then. I am pretty sure that Frank has profited from this trend, with or without the use of leverage.
As for future outlook, I believe Frank is making a reference to the DOW-Gold ratio. Historically, DOW-Gold has bottomed at 1 or 2. For calibration, it peaked at 44 and is currently at about 6. Absent the Weimar-Zimbabwe hyperinflation scenario, and absent massive market-levitating HFT manipulation, I think a Dow-Gold of 2 is still in the cards, e.g. something like a $3000 Gold and a 6000 Dow. At 2:1, a Dow of 12000 would get you $6,000 gold. So, Frank is not crazy. After all, history says he could be right even if it feels like an overshoot of the trend and deflation — and debt destruction — is not the banker’s friend.
At the end of the day, Macroeconomics is the collective impact of microeconomics. The street-level anecdotes referenced in Frank’s letter roll up to the recession that we have today. I have actually made the statement on the Epik blog that we may well have been in a recession since 1998. Whether or not you conclude statistically that the US is in a recession really all depends on what you choose to use as a GDP deflator. If you use Gold as a deflator, the recession started in 1998 and never ended.
Remember also that GDP does not account for income inequality. This is why much of Wall Street is having a “very good recession” while Main Street struggles. The game-changer for domain investors is if one of two things happen: (1) end-users quit their day jobs en masse and build web businesses using domain names, and/or (2) major capital players come into the domain industry. Of these two, I think (2) is the one to bet on, as evidenced by the KKR-led investment in GoDaddy. At Epik, we continue to believe that Development-grade domains as an alternative investment thesis is quite compelling. The KKR deal is consistent with that view.
As for the outlook for the USD, and fiat currencies generally, the Epik blog has been pretty consistent on this point. I tend to believe that .COM (and premium .net) are a better store of value than fiat currencies. However, it is premature to write the dirge on the USD, particularly so long as the world’s oil supply is priced in USD on a daily basis. Also, keep in mind that the USD has the overwhelming benefit of being backed by the world’s most advanced military, capable of securing assets at will, including those that were previously sovereign.
As for what to read, like Nat, I do occasionally read Karl Denninger (market-ticker.org). While Karl is a clever guy, his social policy biases — and personal ax-grinding — intrude mightily on his forecasts. If you have to time to read just one blog for perspective on capital markets, I would say read Zerohedge.com. While the writing style and commentary can be a bit irreverent at times, the unvarnished forensic work is worth the price of entry (free).
@Buford/Stephen
The message here is not looking in the mirror and point your finger at everyone but yourself
The message here is to point the finger at yourself – no political party, administration or silver tongued spineless vacuum polician is going to fix anything in this NEW economy.
That said look at Frank’s advise – renew your domains out as far as you can – for me I have renewed 90% thru the end of next year already (16 months ahead thru Dec 2012) and play the cash is king game – even if it is just a few grand.
“The greatest gift that we could have at a time like this is Guidance and Warning. “Guidance” is more precious than money, because if you have money and no guidance, you don’t know what to do with what you have. And if you have guidance and no money, good guidance will help you to get what you need to get through.”
excerpts from the Honorable Minister Louis Farrakhan’s keynote address delivered on Saturday, August 13, 2011 during the Millions March in Harlem
So at the end of the day …
it is your money-Do what you want!!!!
Thanks for all your BS opinions…some or most of them are cheap.
@ Brian Wick
On the flip sight you should be pointing yer finger at Verisign for the monpolistic practices and unjustfied price increases (especially during deflationary times)…as well a at ICANN’t for allowing and even enabling this crapola…… Cheers !
flip side
Domainers who own thousands of domains perhaps need to employ a different strategy than those who have smaller portfolios. A very large portfolio that was considered to be a great asset just yesterday can easily become a great financial burden tomorrow. As its hard or even impossible to develop thousands of domains it seems like the only way to maintain a large portfolio is by monetizing the type-in traffic, and now the question is for how much longer is that type-in traffic going to continue for mediocre .com domains once they have to compete for traffic with all those new TLDs. Now if you own a small portfolio at least you have the option of developing most of your domains. The only domains that I would keep are the ones that have good potentials for development or resale or the ones that get a lot of type-in traffic, Mediocre domains with trickle of traffic are going to become a financial burden especially if you own thousands of them. (Just my opinion)
–
“now the question is for how much longer is that type-in traffic going to continue for mediocre .com domains once they have to compete for traffic with all those new TLDs”
====
The competition is going to come from NEW Platforms – New Paradigms – Not primarily from new TLDs
A new layer of filtering, firewalling, resolving, etc is being added… one home theater at a time – one WIFI access point at a time
People can type in .COM and it will be removed. They can type in .XXX and it will be NOTED and removed. What they type can be just a “hint”. If they add
.COM to the end of a .XXX the new layer is smart enough to not blindly attempt
to resolve that.
At the end of the day, Big Brands that pay to be resolved will get the traffic.
That is the way ICANN is pricing the new domains. $185,000 up front and
$25,000 per year. {{ Other platforms }} will likely have similar pricing.
Google does not give priority over .Coms.
Why on Gods earth would Google go against what
makes it (Google) over a Billion dollars per Quarter?
I say forget the gTLDs. Google is not buying them
and neither will I.
I believe the gTLDs are hiding “shills” in the post
to try and sway public opinion!
I am not falling for and neither is Google.
@BigLie
“People can type in .COM and it will be removed. They can type in .XXX and it will be NOTED and removed.”
I translate that to The day any non.com gains any kind of relevance beyond hype is the day all TLD’s go away.
That is the game changer – and that may happen – but a lot later than sooner
Why on Gods earth would Google go against what
makes it (Google) over a Billion dollars per Quarter?
===
People arriving at the New Outer Layer of the Internet – Do Not See GOOGLE
Will Google eventually pay for traffic from The.Edge ? Who knows ?
“That is the game changer – and that may happen – but a lot later than sooner”
===
The software is ready – a lot of time and money has been invested
It is sort of like the nuclear bomb in World War II – Ready but when to drop it ?
Jan 12 2012 or 12.12.12 ? in time for holiday gift giving ?
@BigLie –
“The software is ready ”
But the consumer is not ready – not for several several years – the .com is an electronic billboard – what softweare will replace that ?
“But the consumer is not ready – not for several several years – the .com is an electronic billboard – what softweare will replace that ?”
====
A simplistic view is to draw several concentric circles. The legacy Internet is in the inner circles. The consumer arrives at The.Edge.
SOME of the inner circle makes it to The.Edge. Those in the inner circle that pay.
ICANN knows this. They are cashing out. $185,000 to upgrade from .COM to nothing and $25,000 per year.
For someone with 75,000 domains, $185,000 EACH gets sort of pricey.
The High.Roller Domainers should be able to pay that out of pocket-change, right ?
@Karl Jackson
Not a shill, just an enthusiast :).
Yes, Google does favor other TLDs over .com. It depends where you are searching from.
In Germany .de gets a ranking boost, that’s fairly well known.
It is not a stretch at all to think it possible that IF .NYC TLD websites give signals of relevance with that location, it could be tweaked into the algorithm and influence search results originating from within that target region.
@BigLie
But does BigLie’s understanding of the Internet turn into BigBucks ?
All I see is a boatload of NewBies mocking / selling around the .com Internet space – so that they can, in fact, be part of the .com Internet Space.
A PG version of electronic S&M
I’ve been listening to experts trumpet the demise of .COM domain names since the mid ’90s. One guru said by the year 2010 all domains would be “number driven” and English-fied names would no longer be needed. Another guru said the rush to mobile platforms would give rise to a special mobile domain name development platform – DOT MOBI (HaHaHa!!)
Really, DOT.ANYTHING is little more than another variation on these tired old themes and nothing more than a money grab by ICANN. How the heck is any business going to brand itself on a DOT.CAR tld, when they would be up against thousands of competitors hanging off the same extension. It may be okay for BMW.CAR or AUDI.CAR, which already have a strong brand, but then again why would they need to be there when they already have BMW.COM and AUDI.COM? It doesn’t make sense. Why would auto dealers pay to sit on .CAR when they would be grouped with potentially thousands of other dealers?
@BigLie, look around you – the dot com horse has bolted. Every company of any standing in the world has a .com address, and that is each company’s single-most important point of reference. There is no undoing that. These dot com websites are now these companies most important address on the planet, and potentially their most important point of business. Ask yourself how much business strategy and how much combined economic wealth is already tied up in these domain name assets, and then ask yourself what company is going to walk away from these assets, and strategies, in the future. Who would risk moving away from these assets to DOT.UNKNOWN?
I would think the economies surrounding companies’ dot com domain names would be to the order of many, many billions of dollars. In five years from now, God only knows what that figure could be. The more that companies use, and develop, their dot com domain names, the more they grow reliant upon them, and the more they prosper from them. As sure as the sun rises, the economies built around these company domain name assets is going to increase by orders of great magnitude in the next five to 10 years.
And what about the extraordinary number of online retail operations that have successfully launched on the dot com platform in the past five to 10 years? They are already beginning to eclipse their bricks and mortar counterparts and will go from strength to strenth at the expense of their offline counterparts. If you were putting serious money into starting up an online business today, would you risk starting up on anything other than a dot com website? Hardly. You’d give yourself every chance by buying a meaningful dot com domain name.
DOT.ANYTHING = DOT.RISKY
DOT.RISKY = ICANN.GREED
ICANN.GREED = MORE.DOMAINS
MORE.DOMAINS = MOREVALUABLE.COMS
@rodash – great common sense – so many are trying to redefine the Internet because somewhere along the line – long before my 13+ years ago – they made a horribly horribly wrong turn.
Candidly – I prefer my my RIGHTHAND vs. anything RIGHTOFTHEDOT – even though they accomplish the same thing.
This reminds me of some of the dictators that we see on the news that are in denial of the sea change that is happening right beneath their feet and they still want to cling to power despite of all that they see around them, although like any smart dictator who already has plans to abandon ship many of the high profile domainers who are telling us that there is nothing to worry about are themselves considering the new gTLDs.
–
“Every company of any standing in the world has a .com address, and that is each company’s single-most important point of reference. There is no undoing that. These dot com websites are now these companies most important address on the planet…Who would risk moving away from these assets to DOT.UNKNOWN?”
=====
.BINGO
So the solution is simple:
1. Preserve .COM as a back-office database of record (the clunky whois comes along for the ride even though it is not DNS)
2. Remove .ORG from the root, edge resolvers, etc.**
3. Map .NET to .COM using the First Right of Refusal real-time DNS queries
4. Migrate The.Edge Applications and Users to the Peer-2-Peer DNS and away from the out-dated Telco-Like Client-Server (Non-Internet) Architecture
**Removing the .ORG and cash-flow removes 99% of “the problems” circa 2012
Great Read! Thank you! I couldnt agree more… it will be a very interesting 2012
“…it will be a very interesting 2012…”
====
In 1998 people could not predict what has happened. There have been some very
bad decisions made by people with no accountability for their actions. They now
just dismiss it all as “experimental”. They of course have banked a lot of money in the experiments.
Starting over in 2012 with eyes wide open and a better understanding of what
people will do to game the systems, helps. People still have to be aware of what
the incumbents are capable of doing. They will stop at nothing to control YOUR Net.
Food, water, guns, ammunition, self sustaining farming, hunting and fishing, and some sort of liquid fuel. Having solar energy platforms will work for you too, along with wind turbines. Stop thinking the “old way”, because all that does is suck you down deeper into following the advice of guys who have SO MUCH MONEY, this is all just an interesting Monopoly game.
Old school money makers spout gold, because they’ve invested LOTS OF MONEY IN GOLD. So if you buy gold, their investments go up, fast. If you don’t, they’ll get panicky. When people on the verge of starving start buying gold, thinking that a stupid shiny metal will save them, that’s the end for them.
When this economy drops, Gold will mean nothing, just like your mutual funds.
Think FUTURE TRENDS… or just be a dreamer thinking that spewing financial data actually counts when the Bush Administration destroyed everything we ever believed in… so his pals could make the big money. Already, Bush and Cheney are fighting over their “stories” from their books, now out in print. Who’s telling the truth? It doesn’t matter, because the combined decisions between these two satanic figures have put YOU in the financial position you’re in today.
Don’t forget to blame it all on Obamal. (who, with military intelligence and smart thinking, and not having a connection with the bin Laden family like Bush did, killed Osama bin Laden. Yep… on Obama’s watch. After 8 years of NOTHING but wasteful spending in the middle east by GWBUSH.
god I can’t talk about his anymore, Bush and Cheney should be brought up on charges of treason. Period.
“Stop thinking the “old way”, because all that does is suck you down deeper into following the advice of guys who have SO MUCH MONEY, this is all just an interesting Monopoly game.”
=====
“this is all just an interesting Monopoly game”
…
and THEY designed the game, make the rules, and change the rules any time THEY want to
…
It is THEIR GAME
@ Stephen Douglas – I will say that as the price of gold has risen so has the price of full automatic (legal) weapons and ammo. Fear is a motivator that’s manipulated in all markets. In my opinion the amount of debt that US has is irrelevant, because the ones holding the debt won’t sell enough to greatly effect us. Or flood our market with cash that’s smuggled into the country for this doomsday scenario where the dollar is devalued to a point where $50 won’t buy you a loaf of bread.
Why would anyone destroy the financial market / country that is mostly responsible for their massive GDP?
Better yet why is any of this important to domain owners?
“Better yet why is any of this important to domain owners?”
====
Some domain owners may want to be MORE EDUCATED about WHO manipulates the.Game.
People blindly walking into the Top Level Domain “game” may want to study some history. In the year 2000, many people had their pockets picked of $40,000. The insiders laughed all the way to the bank. The new ante is $185,000 or more.
Are people going to sit down at the insider’s Poker.Table and have millions taken from them?
Numbers do not lie.
1. Look at the sales figures for the most expensive domains ever sold. 90% are dotcom.
2. Look at the sheer number of domains registered, where dotcom is way out in front. What is the number now.. 100 million registered dotcoms?
3. Look at the global corporations who dominate the economy. 90% use dotcom (my estimate).
4. Forget the consumer. What is the financial incentive for business to give up dotcom? Major corporations have invested TRILLIONS in the current routing system, DNS, dotcom domains, websites, and promotional material. They are going to give that up because some anonymous poster on the internet advocates it? LOL.
Still not convinced?
5. Look at the extensions in the search results! 87% are dotcom (Source: Seomoz). Yes, I know there is variation depending on country of search origin.
Let the snake oil salesmen talk. Their phony nicks and their crazy talk actually enhance the conversation.
.COM is King – .KING is Crap
“Why The Best Play On The New gTLD’s Might Be As A Registrant”
====
Looks like .TRAVEL is breaking away from the ICANN restrictions
Insiders can pick up some unique names as a “Registrant”
Will STEVE.JOBS be next ?
so f.s.’s focus appears to be “left of the dot”, i.e. so-called 2nd level domains.
he seems to be suggesting a popular term (string) will be valuable next to +any+ extension.
easy to agree that com’s status be not be negatively affected by new gtld’s to any significant degree. those suggesting otherwise are likely advancing an agenda.
icann’s plan relies on scare tactics (fear of not reacting to icann’s moves) under the guise of “the public interest”. can’t your hear the public is screaming out for more domain extensions? relax, icann is working for _you_, the public.
but, in all seriousness, new gtld’s (read: more confusion right of the dot) could “steal” some of the traffic to the most popular generic “2nd level” domains from every other “top level” domain, aka gtld, including com.
it seems f.s. focuses on what users do more than what corporations do. this is smart domaining. because corporations ultmately must also focus on what users do.
the original 1990’s concept of a “squatter” is one who is focused on selling domains to corporations for inflated prices. icann is now encroaching on the traditional squatter’s business plan. icann will sell directly to the corporations. for $185K plus untold extras, corporations can buy domains names in bulk.
but icann still can’t touch the intrinsic value of com. it’s not their registry to play with.
just like the intrinsic value of gold, com’s value is not going to disappear, no matter what happens.
“icann’s plan relies on scare tactics (fear of not reacting to icann’s moves) under the guise of “the public interest”.”
===============
ICANN has had many plans and purposes since 1998. If Jon Postel had not vanished there may have been some technology involved in the solutions. Instead, the focus was on money, contracts, loop-holes and lock-ins.
The result is an unaccountable mess. Look at .TRAVEL as an example.
How many TLD name-spaces can ICANN derail before something changes ?
.COM is the only stable base and fortunately ICANN can not (easily) destroy .COM It is amazing how people have allowed them to thrive since 1998.
@HostLocal,
First, a “squatter” never was “one who is focused on selling domains to corporations for inflated prices” as you stated. “Squatters” or the full term “Cyber Squatters” were quickly labeled in the criminal sense as people who bought TM and TYPO domains of a corporation’s TMs. Cybersquatting had nothing to do with generic word/phrase domains that described a corporation’s prodservs. In fact, corporations started suing legitimate domain investors who owned generic “un-trademarked” domains, whereas this greedy move became known as “reverse hijacking”. Imagine Google suing you because you owned “Search.com”.
That had to be cleared up first to explain how your premise might be seen as logical at first read. However, what IS the correct expectation for domainers to consider regarding registries selling the “right of the dot” brand/prodserv directly to the “corporations” now, with the new gtld’s threatening to dethrone the power of the .com extension.
Here’s the problem, and it is a simple one to understand and even simpler to fix:
A corporation buying “.com” generic descriptive domains that relate to that company’s relevant prodserv words or phrases has made the highest level marketing positioning that they can make. This is the strongest ROI marketing move any company can make, placing themselves in a “king of the mountain” position that their competitors can never compete in, and also outperforms every other type of marketing/advertising the company could invests in, dollar to dollar. Buying these generic relevant domains is called “Backbranding.com”.
Most companies already HAVE their brand (company) name as a .com and probably a variety of other TLD’s and ccTLDs with their brand. However, it’s clear to most users on the internet on how to reach any company: simply type in the company’s name and the .com extension behind it. Ford.com. Halliburton.com. GoldmanSachs.com. WellsFargo.com.
But there’s lot’s more (and this is just a taste)
AmericanAirlines.com, is also backbranded as “AA.com.”
“BarnesandNoble.com”, is backbranded as “books.com” and “book.com” and “BN.com”.
What will Ford Motor Company gain, in the sense of “marketing positioning online” by purchasing a custom extension? Would they buy “.cars”? So they could brand it as “Ford.cars”? Or if they bought .trucks, would it be “tough.trucks”? I’m confident that they could buy the domain name without the custom extension hassle if they just bought “toughtrucks.com”. And how confident would they be in obtaining “.trucks”?
Would Ford buy “.Ford”? Why would they waste the $185,000? They already own the TM for their brand, and most of the world knows what a “Ford” is. So Ford’s marketing/advertising agency would just create, like they do right now, some lame domain phrase using a purchased custom GTLD. First, they’d have to get the word… better move quick and hope that word, at $185,000, really sells well.
Short version here, so I hope you get what I’m saying, which is this: Does a company like Ford benefit by owning a custom extension like .Ford, or “.trucks” or “.sedan”? No, it doesn’t. First, “Ford” is already protected as their TM, and they own the .com version — good enough.
Anyone confused at this mess yet?
As long as some of the most powerful one word GENERIC domains exist in the .com form, I don’t see companies dropping $185,000 for the ability to buy a word as an extension and then buying up all the generic adjective terms to make up THOSE domains and them promoting them because, hell… they just bought an extension and they’ve got to get all the variations of terms out of it that they can. “Repair.trucks.com” OOOPS! it’s just so NATURAL to add that Dotcom!
😉
“I don’t see companies dropping $185,000”
=======
Would they drop 25 cents ? how about $10,000,000 ?
OK – as with most whores only the price point is now in question
Who are going to be the big ICANN winners ? Staff, Panelists and dispute attorneys
While the U.S. FCC routes around the mess and builds a new Internet from scratch (from MARS)
@Stephen Douglas
‘OOOPS! it’s just so NATURAL to add that Dotcom!’
Yes, it is !
For Now
Things change and people adapt, it is the most distinctive human trait.
@stevendouglas
i never suggested early squatters bought generic names. the people who drew the label squatter were those who bought names that were trademarked, or that were names of well-known companies.
there are certainly problems now with tm registrants going after generic domain name registrants. and the acpa when it was finally passed accounted for reverse hijacking. there is just all sorts of nonsense going on now with domains that wasn’t happening in the 90’s.
my understanding, evidenced by the media coverage at that time, is the squatting concept came from people buying domain names that included trademarks or company names with the specific intent to sell them to interested corporations.
if anyone can show otherwise, please do.
the real question is: is it more important to focus on what xyz corporation _might_ do (will they buy gtld’s?), or to focus on what users _might_ do (how do they navigate)?
the early squatters of the 90’s buying tm’d names didn’t do it for the ppc income from search engine companies. ppc did not even exist. they were focused on the corporations that owned the tm’s. their thinking was, “hey, let’s see what xyz corporation will do if i register xyz.com”
that type of thinking still exists, but it’s only one unethical approach to “domaining” amongst many others, not all of them similarly unethical.