iREIT, NameAdministration.com, & the likes

[Seraphim]

Companies flaunting portfolios of 400,000 domains scare the bejesus out me. While they'll certainly bring liquidity to the market in the short term as they set out to conquer more of cyber space, I hardly think the long term effects will be anything pleasant at all. Would you rather sit in a jacuzzi with one woman that weighs 1500 pounds, or sit in a jacuzzi with 6 beautiful 110 pound women. Now imagine the water level in that jacuzzi is the domain market value level, and you'll understand the point I'm trying to make. Domain consolidators will kill the market, not grow the market, don't be disillusioned. They'll inflate the market as they grow, and they'll crash the market if god forbid they falter and liquidize. They'll put smaller ppc companies out of business as they shift portfolios to premium parking accounts, this means less competition in the ppc industry, which means less money to individuals with smaller portfolios. I think these companies will end up with much more market share then most people think is possible, meaning even decent low level domains will vanish. Fast forward 5 years, and it won't be uncommon to read threads at the dnforum like, "Dude, mikejones87623482364.biz was actually available to reg, but by the time I entered my credit card info, Chesterton Holdings had already grabbed it."

Anyone know how much of the premium domain market is already in the hands of these 900 lbs gorillas? I wonder what the percentage breakdown is between the top holders. Who are the top 10 domain holders anyone know?

I'm also testing the democratic value of the DNForum.

 

[tekz999]

Buydomains, marchex, fma, and tekz999 ^^

 

[Seraphim]

I just love BuyDomains. I paid $250 to a private seller for a really nice .com, and would like to pick up the .net for the same name [for branding purposes], problem is BuyDomains owns it and wants $1800 for it. If someone actually offered this particular domain [.net] for sell at dnforum, most people wouldn't even buy it for $20.

 

[sevent]

They'll inflate the market as they grow, and they'll crash the market if god forbid they falter and liquidize.

Inflating the market seems like a good thing. It makes your domains worth more, and makes them easier to sell. The point about what would happen if one of them vaporizes is kind of scary, though. Imagine the effect on the market if over 100 thousand generic and traffic names had to be auctioned off all at once.

Good thing all the big ones claim to be profitable, right?

 

[Ian]

blacktitan, you've made a quite an interesting point there but this is counterfactual and needs test time to arrive at any possible truths behind your speculative theory.

 

[NavySeals91]

Solution? Build up your own iReit. Get funds and buy domains therefore you can buy them out when you are bigger.

 

[Seraphim]

It is by all means speculative, but look at Microsoft. They were innovative, now they're a market squatter blocking innovation. Compare Google's innovation / contribution to search before and after they went public. Wealth and power usually turn innovation into survival, it's physics. I think the domain market is as equally susceptible to this type corporate / big money take over.

It's called survival of the fitness... I know, it's physics too. Food for thought anyway.

 

[Olney]

This is a good point & actually one of the reasons why I got into the Japanese IDN market. There will be growth in other markets these aquisitions will affect the English dot com market.
ccTLD are becoming more common a lot of new companies in Japan are using dot jp. After IE7 we'll see more & more IDN domains. England will use co.uk, Canada will use .ca.
So my point is there will be choices (globally).

 

[Seraphim]

I have a small and very humble portfolio that includes a couple of dozen decent idn's, so I see no reason why mega corps, iREIT, and these types of powerful entities won't go after international domains as well. In fact if these companies are not global themselves, their financers and ventures capitalist partners likely are, making it even more likely.

 

[droplister]

Better start buying to keep up then. If you had the capital they youd do the same.

 

[sevent]

I have a small and very humble portfolio that includes a couple of dozen decent idn's, so I see no reason why mega corps, iREIT, and these types of powerful entities won't go after international domains as well. In fact if these companies are not global themselves, their financers and ventures capitalists partners likely are, making it even more likely.

I bet they will wait a VERY long time to get into IDN's. Look how long it took them to go on a buying spree for generic and keyword .com's? They waited until a huge, established, dividend giving (through PPC) market had been around for years before moving in. That won't happen with IDN's or most cc TLD's for, well, I'm not even going to guess but it won't be anytime soon.

 

[A D]

I bet they will wait a VERY long time to get into IDN's. Look how long it took them to go on a buying spree for generic and keyword .com's? They waited until a huge, established, dividend giving (through PPC) market had been around for years before moving in. That won't happen with IDN's or most cc TLD's for, well, I'm not even going to guess but it won't be anytime soon.

Guess again, remember I own many IDN names and believe in them strongly. I am also running the acquistion department for iREIT.

Expect the IDN market to pick up now.

-=DCG=-

 

[droplister]

pwned

 

[Ed30]

These big portfolio buyers are the best thing to ever happen to this young industry. Why do you think they are throwing around so much money? It's because our industry is the future. Companies like ireit and marchex are building greater profitability and efficiency within their buys, which is great for anyone who holds decent domains as it accelerates their values. That's why there's a mad consolidation going on and it's ALL good!

 

[Seraphim]

Hi Adam. Awesome forum you have here!

Adam, I know you have a huge portfolio, but what do you think about over consolidation of the domain market, do you think it will hurt it in the long term [10 - 20 years]? Do you envision a corporate dominated domain market in many years to come?

A lot more people seem to frown on domain prospecting these days then previously, at least from my vantage point. What I have wondered about for a long time, is once high profile companies start really sinking their teeth into a huge percentage of the domain market share, could regulatory measures be implemented to make it more costly to own domains. I think there are already some public calls for this to happen [I hope it doesn't, but we'll see].

Ed30, you have to realize that the pendulum swings both ways on that point. If these companies stumble, falter, crash, etc., the ripple effect could have the potential to wipe out many small to medium size domain portfolio values. It happens in the real estate market all the time.

 

[sevent]

Guess again, remember I own many IDN names and believe in them strongly. I am also running the acquistion department for iREIT.

Expect the IDN market to pick up now.

-=DCG=-

Ahhh... well, that would make a difference

Still, acquiring IDN's and other "speculative" domains would represent a big shift for the larger acquisition companies and would require a different valuation model. That said, I do have some nice IDN's for sale :greensmilewinkgrin:

 

[A D]

Hi Adam. Awesome forum you have here!

Adam, I know you have a huge portfolio, but what do you think about over consolidation of the domain market, do you think it will hurt it in the long term [10 - 20 years]? Do you envision a corporate dominated domain market in many years to come?

A lot more people seem to frown on domain prospecting these days then previously, at least from my vantage point. What I have wondered about for a long time, is once high profile companies start really sinking their teeth into a huge percentage of the domain market share, could regulatory measures be implemented to make it more costly to own domains. I think there are already some public calls for this to happen [I hope it doesn't, but we'll see].

Ed30, you have to realize that the pendulum swings both ways on that point. If these companies stumble, falter, crash, etc., the ripple effect could have the potential to wipe out many small to medium size domain portfolio values. It happens in the real estate market all the time.

Blacktitan,

First, thank you for the comment on the forum, it is appreaciated.

All excellent points you made.

I do agree with Ed, consolidation is what will give this industry more credibility as long as it is done by strong companies that are financially backed and better well known that the average user.

This industry is still in it's infantcy stage but public awareness will rise as more consolidation is done.

Just like in any industry, those with valueable domains will beneifit and won't worry about consolidation as it only builds more value into their names. If a buyer wants a domain, it's not like houses, they only have one choice and need to negotiate with that person. Their options are more limited than any other industry. You basically are picking out a house and telling someone you want it so they need to tell you what they want and move out. This adds great value to the house owner.

-=DCG=-

 

[Ed30]

Ed30, you have to realize that the pendulum swings both ways on that point. If these companies stumble, falter, crash, etc., the ripple effect could have the potential to wipe out many small to medium size domain portfolio values. It happens in the real estate market all the time.

If the revenues are there that's not going to happen. These companies want a return on their investment asap.

 

[duceman]

.....you have to realize that the pendulum swings both ways on that point. If these companies stumble, falter, crash, etc., the ripple effect could have the potential to wipe out many small to medium size domain portfolio values. It happens in the real estate market all the time.

Some of the largest private portfolio's were made on the back of the dot com bust.

Just like in anyother business you must have a strategy for any fluctuation in your market.

 

[Seraphim]

Yes, the domain market definitely still has that frontierish feeling, and I just saw the US Calvary ride by my one wheeled goat pulled wagon, hence the cause for concern. IREIT owns nativeamericans.com doesn't it?

Anyways, I know consolidation is inevitable, I just hope it doesn't turn out to be lost opportunity for the small investors like myself, as I'm sure a lot of good domains will dry up.