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Welcome to the The
Lowdown from
DN Journal - your source for notable news
and information from all corners of the global domain name
industry!
The Lowdown
is compiled by DN Journal
Editor & Publisher Ron Jackson. |
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When
the Domain Sales Boom Ends One
Expert Thinks The Culprit May Not
Be the One You Expect
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As
we near the end of 2021,
many
of us have begun assessing
what kind of year we've
had and what the prospects
for our industry look like
as we get ready to head
into a new year. On one
hand, we had clearly seen
a continuing boom
in the domain aftermarket.
On the other, some wonder
if competition from
growing digital assets
like NFTs and crypto
could siphon off some of
the revenue that has been
fueling the domain surge.
Last month, when I was in
touch with veteran domain
broker Neil Bostick
(QEIP.com)
about the
launch of his
new high-end domain
marketplace, Graen.com,
I got his thoughts on
where we've been this year
and what he sees ahead in
2022 and saved the notes
to share with you once we got
into this month - the
closing stretch of |
Image
from Bigstock
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2021.
Bostick's view echoed the
ambivalence about market
prospects that I noted
above. "In
general, the market is
obviously red hot and
there are a few different
things that really excite
me and a couple small
things that worry me,"
Bostick said. However, his
biggest cause for concern
turned out to be a different
disruptor (and time
frame) than that posed by
NFTs and
crypto. |
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Neil
Bostick
Founder, Graen.com |
"For
some perspective, my sales were relatively the same between 2018 and
2019 but then I did 3 times more sales in 2020 than I did in
2019. I think this was because there was a boom in new startups
beginning after so many industries were forced online (with COVID).
Then in 2021, I’ve done 3 times more sales (so far) from 2020.
I think that this was because the bigger companies that were forced
online in 2020, planned their 2021 marketing budget to account
for larger domain purchases/upgrades (they couldn’t move as
fast as the startups in 2020). With Graen, I expect to do more
than 3 times my 2021 sales in 2022 …but I don’t think that
will be because of market forces - more so just because of the
platform taking market share. There is definitely a lot of funding
still going on and that money is going to be spent in the next year
or two so I definitely have a lot of confidence that the domain
market is going to be hot for the near term."
"That
said, it is keen to note that a lot of investor demand for domains
right now may also be a side effect of just larger demand for |
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collectibles
in general. This slightly concerns me as a major indicator of a bubble
has tended to correlate with high valuations for non-productive
assets (non-income generating assets) like collectibles, a category
that some domains can fall into. So I worry if the collectibles/NFT
market implodes, domains will likely be a casualty. I do have
a lot more confidence in domains than I do in NFTs but I’d be
remiss if I didn’t note their correlation. The biggest casualty
might be Collectibles.com
which I am trying to sell." |
"As
a lifelong ‘Devil’s Advocate’, a constant thing I always think
about with domains is its lifecycle - any domain investor would be
lying to themselves if they think that domains have an infinite life. They
are intrinsically a main asset of one of the biggest technological
developments in human history - yet as any technological asset, they are
only as good as the system behind them (and all technology becomes
obsolete at one point or another). The question in my mind is when is the
climax for domains and at what point is the next generation of
‘global online real estate’ going to become available," Bostick
wondered.
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"With
new developments like the focus on the ‘metaverse’ and
all of these technology companies (like Google, Amazon,
Facebook, etc.) having their own small version of an open
source internet on their platform, I ask myself when will be the day
that someone is crazy enough to invent the new network for the
world (one faster, more efficient, safer, etc.). I think the
implication that many people might not think about is that with a
new ‘metaverse’, or platform to reinvent the internet, comes the
new opportunity or threat to have domains be made obsolete (through
the use of a new system)."
Bostick
continued, "Many
people are worried about .COM being made obsolete (or at
least, less dominant) by the emergence of new TLDs, but I would
argue that the risk of |
Image
from Bigstock
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domains
in general being made obsolete (or going the way of MySpace
handles) may be a bigger concern. That said, I ground my
work/investments/businesses in domains on the fact that if domains
are made obsolete, it would not be a fast process and so many
tech companies would simultaneously become obsolete and the return
of my domain investments and SP500 index might have similar
percentages of loss. With all the faith I have in the domain
industry, I remind myself that companies can adapt while digital
assets cannot. That's
me being a contrarian as a I don’t believe in over-selling
anything - just saying it how I think it is. Regardless, I am
very confident in the domain industry and hope that Graen.com
will be able to weather the storm as a major player for the next 20
years!
(Posted
December 3, 2021)
*****
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