The current state of the market
POSTED BY Rick Latona IN Web Sites

It's late May in the year 2008. Where the hell are we? Well, let's break down a recent conversation I had with Ron Jackson, the esteemed editor of dnjournal.com which is the only must-read domain news website out there, in my opinion. While emails that I send normally read from bottom to top, I've reversed the order to make it an easier blog read. After the email exchange I'll have a few more comments. Maybe Ron will stop by to continue the discussion.

On a side note, my sister, and other old timers on the internet, I'm talking about the peeps that were emailing in the 80s, still put replies on the bottom of messages and it annoys the piss out of me. They know we've figured out a better way 15 years ago yet they persist. Enough digressing.

To: Ron Jackson
Subject: Shreveport.com
Sold at 70,000

.... sorry for brevity and/or typos. written from pda phone.

Rick Latona

To: Rick Latona
Sent: 5/27/2008 4:17 PM
Subject: RE: Shreveport.com
Congrats - thanks for the info!

Ron

To: DNJournal.com
Subject: RE: Shreveport.com
Buyer got a real bargain on that one. I could hardly give it away. How was
the auction last week? Seems frenzy is over as I predicted and you argued
with me about months ago.

.... sorry for brevity and/or typos. written from pda phone.

Rick Latona

To: Rick Latona
Sent: 5/27/2008 4:54 PM
Subject: RE: Shreveport.com
Auction total was lower than usual - $2.55 million, but a higher percentage
of names sold (6 at six figures ) than last time out. Most felt more would
have sold but the reserves were too high. I gave a luncheon update on the
latest date we have from domain aftermarket sales (covering the 2nd quarter
to date). Total sales were up again over the same period last year despite
the general economy being in the doldrums - so I was and still am right

The growth rate has slowed in this quarter though, first 6 weeks of  2Q-2008
just 2% above same period last year - but the economy was much healthier
then.

Ron

Very interesting indeed Ron. All I keep seeing as I read your response time and again is this part, " but a higher percentage of names sold (6 at six figures ) than last time out". I've had countless conversation with other major players whom all point out that Kevin Ham, Xedoc and some of the other bigger players have stopped bidding on what they call "trophy names". So if the bottom has fallen out on the 1-3 million dollar deals but increased on the middle and lower ground to still put up a 2% growth rate than things are much better than I thought.

After all, wouldn't all those huge dollar sales last year screw up the averages? Isn't a market with much more middle and low dollar sales a much healthier market? Are we seeing more of a correcting than a recession? Could it be that I have been somewhat glum because I wasn't looking at the picture properly? I hate writers who ask a ton of questions in a row to get their point across so that was the last of them.

I think what's really happening is that the pool of buyers that can and will buy premium names is increasing, thus the demand is increasing. So I'm starting to think that this might actually be the calm before the storm. If our market size is increasing then inevitably those huge sales will return except this time, in a more healthy and less frenzy induced atmosphere.

  • http://NationPress.com Ken

    Perfect!... Make that one a sticky.

  • http://Dropped.ws Sukhjinder

    Hi Rick,

    I totally agree, but the sales however were not that high (or you can call calm )because of these new bills are growing everyday. Top of my head, I can see the effect of "SnoweBill" on the domanin market. This industry will continue to grow, but biggest gaint will be the ones who are going to survive. The players who are going to adapt to its survivance, will have more to gain. But I can already see, the players who are getting in to this market blindly just seeing that this market is all about money, they have nothing but I can see them ending in the bad situation. The time had changed. People who had missed the deals, they are summing up and will do whatever it takes to collapse this market, which is hardly impossible but yet possible.
    Now, market needs a change, the change in relates to our old domaining practice. And that will come as soon as the the new against domiaing bill continue to hit its surface. Again, people who has only few top top paid dollars domains, will be the first ones on the hunt. But players like Kevin ham, frank schilling, including you, will surviv.
    I am not praising anyone here, but I have learned alot from you, and you have the ability to see that what is true and what is not, and where the market is currently going. Like you said, the names will be priceless, but then there will be no buyers, so the price needs to be reasonable etc. Thoes techniques of studying the market shows that one has the ability to survive, and the ones who are ready to change themselves will not survive.
    The weathers changes, thus we needs to adap changes to survive, and the ones who dont survive usually dies out.

    Once again, Great post. Alwyas learning something from you.

    Regards
    Sukhjinder.

  • http://Dropped.ws Sukhjinder

    Please edit my second last paragraph,

    " The ones who are ready to change themselves will survive, and the ones who do not change themselves will not survive" That is just my opinion.

    Sukhjinder

  • http://DNJournal.com Ron Jackson

    Good questions/points brought up there Rick. I just published our new domain sales column and it includes a quote on current market conditions from Pete Lamson whose company (NameMedia) makes a ton of sales to small and mid sized businesses. They don't have many of the headline blockbuster sales but more than make up for that in volume. Here's the relevant paragraph from our article:

    Though pay per click revenues are down across the board this year, aftermarket sales continue to outpace previous years. The Senior VP and General Manager of NameMedia's Domain Marketplace (which includes the AfternicDLS) Peter Lamson told me that his company had their best quarter ever in 1Q-2008. Lamson said, "Our SMB (Small to Medium sized Business) “end user” focus really seems to be paying off, as global business demand for a compelling online identity seems only to be accelerating. The momentum is continuing in Q2, so we are definitely seeing on AfternicDLS what you are seeing with respect to domain sales remaining strong in an otherwise challenging economic environment."

  • jody

    "Again, people who has only few top top paid dollars domains, will be the first ones on the hunt."

    not sure the reasoning behind this

  • Your Sister

    As your sister, it's good to know I still have the capability to annoy the piss out of you. ;)

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