|
"I believe that
2008 was the tip of the iceberg and we will see
in 2009 more of that iceberg, as the
Christmas retail season gives way to a
challenging 2009. Cash liquidity problems, cut
back on spending by both consumers and
businesses, poorly backed assets and securities
nationally and globally, political unrest
globally, with continued and unforeseen
repercussions globally and cross industry will
give rise to new powers."
|
Kevin
Ham on the cover of
Business 2.0 magazine -
June 2007 |
"The consolidation
of the stronger enterprises, the rise of new
innovators to take advantage of opportunities
that are created as the masses pull back, and
the resetting of expectations of skilled people
will see the strong innovators arise in the same
way Google emerged from the 2000 dot com crash."
"Focus on
leveraging all that you have built over the past
many years, (domains, traffic, cash flow,
technology, relationships) and marrying new
innovative, simple concepts to provide value to
select customer segments in context, will enable
many traditional domain companies to reinvent
themselves into global media companies in
2009 and beyond. It will also be an
opportunity to acquire assets, talent and
intellectual property for a fraction of what it
cost in previous years," Dr. Ham said,
adding "Then again, all of this is work and
sitting tight and waiting until you have a
vision of what you wish to do and have a
passion for realizing that vision may be the
best path for many."
|
He concluded "Here's
to the waves of opportunities in 2009 and may
many of us see and fill those opportunities to
give true value and a sustainable basis for
people, communities and businesses all around
the world. It is still the early 1900's
in terms of the Internet and technology. Let's
Reinvent!"
Tim
Schumacher (Sedo.com)
Sedo.com
has long been one of the principal powers in the domain
industry. Their popular domain sales platform is
utilized by buyers and sellers around the world and they
are also a leader in the PPC business. In looking back
at what happened in 2008, Sedo co-founder and CEO Tim
Schumacher told us "I guess we all –
including, but not limited, to us in the domain industry
– were surprised by the sharp economic downturn. As
much as we all enjoyed the ride up to and including
2007, everyone, from Registries to Registrars to domain
investors and domain companies like us, felt the
industry turn south after Q1 / 2008."
|
"With the negative
trends accelerating towards the end of the year,
Registries like VeriSign posted lower domain
registration numbers, Registrars saw much higher churn
and even a net decline in registrations for speculative
purposes, and domain investors as well as domain
companies saw their advertising revenues and their
domain sales decrease. Or in other words, the
ripple-effects were felt through the entire value
chain of Domaining."
"We also saw the first wave of – mostly
smaller – providers to close down or get acquired. In
regards to Sedo, we weren’t immune either, and
we closed 2008 with slightly lower revenues than 2007.
Fortunately for our customers and staff, we run a
very tight ship and were able to maintain staffing
levels and even pay out – both in domain sales and
parking revenues – even more than last year’s $100
million. But we still aren’t happy, given that our
goal is and continues to be to increase revenues for us
and our clients year-in and year-out," Schumacher
said.
|
Sedo
CEO Tim Schumacher |
|
|
Looking ahead to this year
Schumacher predicted "2009 will be a challenging
year. I agree with the statement that the web, and web
advertising specifically, will be one of the better
places to be, but it’ll probably be simply a less
abysmal place than the rest. So my hunch is that
2009 will not be better than 2008, just reversed in
terms of the quarters: Q1+Q2 will be bad, and the
remainder of the year a little better."
"While we at Sedo truly
believe in the value of domain names, advertising
revenues will continue to be weaker than expected,
unless the advertising providers will give the domain
channel the dedication, transparency and freedom to
innovate it deserves – and thereby, I don’t
mean ‘going direct’ for the sake of squeezing out
domain name owners in the long run. Instead, advertising
providers should create an environment where innovative
companies can utilize their advertiser base and
technical solutions to compete fairly against each other
in finding the best value-added solution for their
clients, the domain name owners. I hope they do so. If
they don’t, 2009 will be the year of direct
monetization, as domain owners and their
monetization companies will need to step things up to
provide their valuable traffic directly to advertisers
at fair rates.
"
|
|
"Also, 2009 will be the
year of domain selling: with advertising revenues
weak, domain selling will continue to grow in
importance. And it makes total sense! The theory that
‘domain names will always grow in value’ is a myth,
Schumacher said. "Instead, smart buying and smart
selling always was and always will be the choice of
the successful ones. It’s pretty simple: if
someone offers you a 100x (yearly!) multiple on a domain
name, because he likes or needs the name, and doesn’t
care about the traffic, go for it. A few smart
companies have already made this a revenue stream, and
more will follow. Sedo.com will help by launching a
major product during 2009 to facilitate that."
"Consolidation will also
continue. There’s simply no reason to have
dozens of parking companies around… just like
there’s no reason to have dozens of Registrars around.
Sedo/United Internet will continue to be open for
acquisitions, as will our larger peers in the
industry. We do expect the number of providers to go
down in 2009, and the competition to increase among
the fewer remaining providers – all to the benefit
of domain owners.
"
|
"If ultimately successful, we
do not expect new TLDs approved under ICANN’s plans to
create a major shift. Yes, some will create a nice
niche, like .INFO, for example, which has earned
it’s fair share of the market, but most others will
be also-rans, just like most of the ones introduced
in 2001 (hey, who can still remember all 7 of them?)."
Schumacher concluded by noting
"New developments from ICANN may not have the
impact some predict, but we do expect new legislation
in the United States concerning domain names and
Sedo remains committed to the Internet
Commerce Association as the industry’s best
vehicle for building consensus positions on industry
self regulation, protection of third party rights, and
educating law makers on the value of protecting domain
properties."
Phil
Corwin
(Internet
Commerce Association)
| Phil Corwin is the Legal Counsel for the Internet
Commerce Association (ICA) and also serves at
the Washington D.C. lobbysist for the domain
industry trade group. Corwin told us "As Counsel
for the ICA handling legal and public policy issues in
Washington and within ICANN, I believe that the most
significant trend of 2008 was the broad domain name
industry achieving visibility, credibility, and, most
importantly, real influence in these key
decision-making forums. The full scope of ICA’s 2008
activities is covered in the Annual
Report recently posted on our website –
but, to cite just a few examples, with the help and
support of our members we:
|
Phil
Corwin
Internet
Commerce Association |
|
|
These are substantial achievements
for an industry that had no consistent and organized
public policy apparatus until late 2006. Domainers and
the companies that serve them fared far better on these
and other important matters because the ICA was there
to keep an eye out and speak up for them. So, while the
economic trends may have been downward in 2008, the
policy influence trend was definitely on an upward
trajectory. "
|
|
Looking forward Corwin said, "The
great challenge in 2009 for the
ICA
will be to build upon our progress in the past year and increase
the benefits we deliver to members across a broad
range of issues. Our success in that area will be tied
to the challenge of maintaining and expanding support
from the broad domain name investment and development
industry. There certainly will be no shortage of threats
and opportunities, including:
-
Working with public interest groups, online gambling
associations, and other parties to develop preemptive
legislation to establish clear jurisdictional and due
process safeguards to prevent a recurrence of the
Kentucky
domain seizures.
|
|
I am highly confident that we can
serve the industry well on all of these important
matters, as well as the unanticipated challenges that
inevitably arise without advance warning, so long as we
retain the continued support and participation of a
growing roster of ICA members." |
Michael
Mann (Washington VC)
|
Michael Mann founded BuyDomains.com
and, after selling that company to NameMedia,
founded his current company, WashingtonVC. Mann
has been the subject of two DN Journal Cover
stories (one of our earliest ones in August
2003 and another in September
2007). Mann said "The most
significant event for the domain industry in '08 is
Google changing its relationships with bulk domain
parkers so they earn less due to blacklisting,
advertiser opt out checkboxes, and lower rev shares all
around; secondly the crash of the economy overall
has been limiting domainer portfolio valuations and
corresponding liquidity options."
Even so Mann sees a lot of
opportunities in 2009 for those bold enough to seize
them. "The sky is the limit: premium domains
can be purchased at half the price as a year ago,
technologies are ever more efficient, effective and
inexpensive, employees will work harder for less,
investors need new legit sources of high returns, etc.
Despite global economic weakness more people will
continue to do more things online perpetually, leaving
extensive opportunities for those who are building and
branding viable components for the next generation of
Internet.
|
Michael
Mann
WashingtonVC
Founder |
Dr.
Chris Hartnett
Dr.
Chris Hartnett has been called the father
of Internet Telephony after creating companies that
reached a valuation close to $3 billion. Since leaving
that field he has spent much of his time in the domain
industry building his own domain portfolio and speaking
at industry events (Dr. Hartnett also serves on the
board of directors of Kevin Ham's Reinvent Technology).
Dr. Hartnett told us "2008 was definitely “The
Year of Change” "All that talk about
transparency, open source and mass collaboration now
seems to be the rule rather than an option or choice. We
can walk the path alone to some degree but if we don’t
learn to work together, our future isn’t very
bright and 2008 taught us that every economy and every
country is intimately connected and practically
speaking, interdependent upon the other."
|
Dr.
Chris Hartnett making an early VOIP
call (long distance call over the
Internet). |
"Business, like everything
else in life, needs to be sustainable, but there is only
one guarantee: “Change is inevitable and things NEVER
stay the same.” The wise tell us that there are 5 key
elements for dealing with Change and that the
“unchanging” fundamentals for fiscal and social
progress are: Stability, Adaptability, Purification,
Integration and Growth. If any one of
these five essential elements for progress is missing
from our corporate business models or from our personal
lives, it is inevitable that success will be derailed
and will come to a screeching halt."
"During 2008, the domain world
found our Stability was truly shaken, not stirred, at
its core; we were forced to be Adaptable just to
survive; Purification seemed to be the most dominant
player of the times… from natural disasters such as
fires, earthquakes and hurricanes, to the major
destruction and decay in our industry’s basic core
sustenance, PPC revenues. Not to mention the
global purification and the rise and fall of oil prices,
the collapse of banks and credit markets, implosion of
the insurance companies, the day of reckoning for the
auto industry, the airline industry, the
|
| housing industry and the newspaper and magazine
industries. The list of significant changes go on and
on. Integration of these powerful lessons of Change is a
must and our personal Growth no doubt will be the only
guaranteed winner and will later be termed as experience
and wisdom, with all bets off when it comes to
guaranteed solvency for anyone, corporate or otherwise,
as even the super wealthy in Palm Beach now have
to attest," Dr. Hartnett noted.
|
"Leading up to 2008, there was
much talk on the ever growing multitude of blogs and
conferences discussing such topics as how long could the
good times last and how high could prices go before a
bust could occur and would the PPC revenue model
actually be sustainable over time like its analogous
counterpart in the brick and
mort
ar world (income producing real estate.) The pundits in
our industry and the wise were talking about
diversification, alternatives, development and putting
away something for a rainy day and were strongly
cautioning about keeping the egos out of the great
domain name “higher and higher price chase” and were
cautioned to watch out for the cyclical waves of
Change that would inevitably wash up on the
Domainer’s shores."
"Sure enough, right on
schedule, 2008 saw the highly feared drop in PPC
revenues to the tune of over 40%. We saw Google
“going direct” and competing with parking companies
as the self- proclaimed doers of no evil took
questionable steps to secretly self-police and control
an entire industry in order to possibly selfishly gain a
much stronger hand in the lucrative internet advertising
world. Meanwhile, the deposed king Yahoo,
vacationed in the long anticipated but very
disappointing virtual Panama and fought to stay
afloat and keep their jobs while fending off takeover
advances by the ever late to the party Microsoft,
who needs domains and the internet advertising world
more than their blinding arrogance will allow them to
see."
|
"In 2008, the Yahoos watched
their stock value drop by 75% in the process of
sticking to old paradigms and gloating over past
accomplishments while idiotically leaving a major 40
plus billion dollar golden goose on the table
unattended because of their hardened arrogance and
distant past success that overshadowed basic common
sense. The kids from “cloudydale” proved beyond any
reasonable doubt that past performance most certainly is
no guaranteed measure of future performance and when
presented with the precious gift of a giant golden exit
opportunity, learn to get your ego out of the way and ring
the cash register while you can."
"Although not hit as hard as
many industries, Domainers, if nothing else, learned in
2008 that all markets go up and also go down and
the world of domain names is no exception even though
many of us believed in our own press and hype to the
point of thinking because we owned domains we were
granted some mystical cosmic pass from the
cyclical natural laws of
|
Dr.
Chris Hartnett and Dr. Kevin Ham
at Harvard Business School Advanced
Management Program graduation
ceremony
October 24, 2008 in Cambridge, Mass. |
| creation, maintenance and
destruction. Change although seemingly disruptive at
times, is actually good, healthy, and evolutionary and
plays a most essential part in the bigger picture of
life. It may very well be that Change gives us a much
needed opportunity to Reinvent ourselves, and Reinvent
the way we cherish and perceive that which is most
important and truly essential to our very existence, far
beyond the illusions of business, money, power and fame.
It may be that Change allows and at times, forces us to
fully appreciate all that we have, the precious gifts
of family, friends and all that is simple,
pure and good. |
"The major cycles of Change
that arrived in 2008 leave Domainers with tremendous
opportunities for 2009 and beyond. Amongst its other
virtues, Change forces innovation. Innovation is
the life blood for long term sustainability for any
company or industry. Innovation breaks the tight grip of
old habits and helps to dissolve mistakes hardened by
ignorance and arrogance, usually the two unfortunate
byproducts of past successes."
"The unfortunate drop or
possibly planned or even manipulated orchestration of
the decline in PPC revenues can either be a final death
blow to some Domainers, Parking Companies and Domain
Name Investors or alternatively, the situation can
become a catalyst for lucrative innovation and
Reinvention for others. The choice, as always, is ours."
|
|
"We will endure and progress
in 2009 if we remain stable within ourselves; adapt to
the changes we are presented with; accept the
purification around us as healthy and constructive;
integrate the changes that arrive into our plans and
strategy without resistance, and finally, if we find a
way to enjoy our growth, even if it seems painful at
first. May you all find: Peace, Joy, Good
Luck, Those that Love you and Those you Love, and
Prosperity in the coming new and exciting year.
Finally the two axioms I will be living by during 2009
to embrace the changes |
within myself and the myriad of
inevitable changes within our Domain Name world. “The Lord helps those who help themselves”
and “Trust in God but tie up your camel.”
|
Coming
Up On Page
3 -
2009 Forecasts from:
-
Australia's
Michael Gilmour
-
Real
Estate Domain Giant Rob
Grant
-
India's
Rising Business Star
Divyank Turakhia
-
T.R.A.F.F.I.C.
Co-Founder, Attorney and
Domain Investor Howard Neu
GO
TO PAGE 3 |
Find
out why Rob Grant will
still
be fishing for domains in 2009! |
|
Direct
Links to All Pages Featuring our
Panel of Experts:
Page
1 featuring: Monte Cahn,
Ari Goldberger, Andrew Miller,
The Castello Brothers.
Page
2 featuring: Dr. Kevin
Ham, Tim Schumacher, Phil
Corwin, Michael Mann and Dr.
Chris Hartnett.
Page
3 featuring: Michael
Gilmour, Rob Grant, Divyank
Turakhia and Howard Neu.
Page
4 featuring
"cleanup hitter" Rick
Schwartz.
|
|
|
