Featured in the Wall Street Journal · Forbes · Newsweek · USA Today · New York Times · CNN/Money

March 25, 2014

Domain Sales

News Headlines


Dear Domey



YTD Sales Charts

The Lowdown

Legal Matters

Letters to Editor

Classified Ads

About Us



The State of the Industry January 2009: 15 Leading Experts Break Down What Went Wrong in 2008 and Predict What Will Happen in 2009

By Ron Jackson 

Rick Schwartz (T.R.A.F.F.I.C.)

I have traditionally closed our annual State of the Industry report with comments from T.R.A.F.F.I.C. co-founder Rick Schwartz. I explained the reason for that in last year's report when I noted that Schwartz is the perfect clean-up hitter because he has a unique ability to put this industry - and as you will see in his responses this year - the business world at large - into perspective. He also has a record of being able to look beyond the specific circumstances of the present day and  predict how things will play out years down the road.

That ability has never been more important than it is here in 2009 when everyone - not just those of us in the domain business - has such an uncertain year (or longer) looming ahead of them. Unedited and unexpurgated, here are this year's thought provoking comments from the domain industry's version of the Sultan of Swat:

"Each year Ron Jackson asks these type of


Rick Schwartz
T.R.A.F.F.I.C. Co-Founder 

annual questions and each year I bang it out rather quick. I usually have a clear vision and have my hand on the pulse of things. This year is quite different, two simple questions that have taken me over a week just to get my head around. I always start to write something short and concise. But one thing always leads to another and to be honest, I could triple what I have written here and still not touched on about 75% of what I see coming and the factors that have and will contribute to that end in 2009 and 2010. Each time I try and edit a few sentences out, I end up adding instead. There are no short or easy answers to the questions posed. I can’t even talk about 2009 without including 2010. Because I don’t see what we are going thru in terms of calendar years. I see it as an “Era” or a sickness that has to run its course. It first manifested itself in the general economy in August of 2007, a full year before the collapse. However there were major indications of a serious downturn much earlier in 2007 for those paying attention.

We are going though unchartered territory and all comparisons with the Great Depression are misplaced but understandable. It was a different world then with much less opportunity and 1/100 of the tools at our disposal today. If you look at the headlines of 2008 you would find that 100 stories could vie for the biggest. Electing the first Black President, GM on the edge of bankruptcy, AIG bailout, Lehman Brothers, Merrill Lynch, Bear Stearns. Wachovia, WAMU, CITI. Madoff, Blago, Spitzer. Then add the  stock market crash, housing crisis, credit crunch, pirates, Russian invasion of Georgia, wars in Iraq, Afghanistan, Gaza and tensions between Pakistan and India. Look what I left out. Israel, Iran, China, North Korea. See how hard it is to mention one thing without taking the time and space to mention the other things? You folks can add dozens more. Any one of these events in a normal time would be huge. Together and all at once is really something hard to get your head around.  

There is a difference between a downturn and a collapse. The difference between a plane descending and one in a tailspin and completely out of control. We are witnessing both at 

once. Then add in massive layoffs, corruption, no confidence and a world in an informational transition between two eras and we have what may become the perfect storm. You cannot sugar coat what we are about to experience. Usually things like this are contained to a geographic area or region or a sector. This is worldwide. This is hitting every corner of the globe. This is something we have really never seen before. We are living in a very vivid part of history.  

What does this have to do with domains? Everything. You can’t be in the domain business and not be plugged into “Generic” business and world events. “Business” is just not domains. Domains are merely a vehicle with diversified facets that make it like real estate or an investment or an oil well, or a collectible or a limited and specific commodity or a host of businesses. But domains without being plugged into business are really nothing. Many of us are in many sectors and therefore 

many industries. We have our ears open to them specifically. So while we have a layer of protection around us, it is the general economy that will dictate our immediate destiny. That is where our picture brightens in the midst of all this darkness.  

As a rule, I pay particular attention to things that happen at the end of the year as well as the beginning of the year. Truths are revealed then and even more truths come out during tax season. So in business I see key points in time during any year that I pay particular attention to. While there are many issues I could bring up that are certainly worthy of discussion in 2008, the two that pop out at me are things that happened or manifested itself in December. 

These are earth shaking and game changing movements that have long term impact. The decision for Google to deal directly with domainers is a big deal. It is a policy change that will have an impact as we move forward. Maybe not the impact on the domainer time frame, but certainly one if you have a long term view of the space. The seed has been planted. This shift sends a number of signals and open things up in a dramatic way. Getting rid of worthless and crappy traffic and TM infringing traffic is key to thriving in the future. Results are going to be in vogue for a change and I see that as a great thing. When you take out the garbage, you can bid more on traffic that has a better potential of ending in a sale and a new customer. The value of a new customer has been totally off the mark when it comes to the Internet. It's more than just one sale. The lifetime value of a new customer can be worth thousands. Tens of thousands….Hundreds of thousands….Millions. And folks are trained to pay a nickel or a penny or a fraction of a penny and in many cases they treat their new potential customers like coins. 

If they paid $10 for a new visitor I think they would take them much more seriously. The point is there is so much room to improve selling on the Internet that it could take many years for retailers and wholesalers to understand the art and science of making a sale on the 
net. The principles on the net are identical to offline except the customer is willing to do all the work leaving the business to do the fulfillment. Online the customer says to the business owner….”Don’t get up, I will serve myself” The customer will go through the inventory. Look to see if it is in stock. Will go to the cash register and even put in the money. All without the help of the business owner or any employees. The business just has to ship the goods in a timely manner.   

I think the second thing and perhaps the bigger of the two is something that started years ago but illustrates the many facets of the Internet. For literally hundreds of years we have been getting our news in printed form. Much of that time in newsprint. The newspaper has defined generations. Tracked  history on a daily or weekly basis for generation after generation after generation. In 2008 that method of delivery all but collapsed. Collapsed like a cheap card board box. One of the single oldest mediums met its' fate

Schwartz with Barbara Corcoran, the keynote speaker at T.R.A.F.F.I.C. New York 2008

in 2008. Some are still printing yesterday’s news and that will continue for years, but less and less people are  buying yesterdays news nor are they advertising there using yesterdays news as a base. Folks get news all day. They can filter out what they don't want and filter in what they do. Other mediums are not immune. The Internet has displaced the entire economics of the world which was greatly accelerated by everything that went on for the last few years.   

What happened in 2008 had less to do with domaining and more to do with collapse of everything else. Domaining and our corner of the planet stood stubborn in a tide that was going down. Every corner of business was stung with scandal, ponzi schemes and people in position of trust that took us all for a ride. Mix that in with the housing crisis, $150/barrel oil, $1000/oz gold and you have the makings for turmoil like none of us have ever seen before. There is so much blame to go around, where do you even start? Maybe some public hangings? Payouts may be down, but that is a market and a market goes up and down. Most businesses are suffering a deep systematic decline. Many will never recover. Any decline in domains is temporary as it is market driven. The foundation of the industry is strong even though you will see a number of folks disappear. 

That brings me to the #2 question about 2009. The Internet is going to grow and thrive. On the other hand many will pull back. Even more are just going out of business. I am the eternal optimist as many know. But 2009 is going to be rotten for many and great for those who can exploit the new normal. 2009 is a year to be very careful and bold at the same time. It will be riddled with pitfalls and opportunity and folks not holding up their end of the deal. Desperation is coming to a neighborhood near you this year whether it be in your home town or on the Internet. As they say "Trust but verify" as scams will be on the increase  

You'll have to be more than a domainer to thrive and survive 2009. Opportunity may be in domains. But it may be elsewhere as well and blinders have no place in 2009. The space is going to flourish in 2009. Branding is no longer in vogue. Sales are! What is the difference 

you ask? Branding is a feel good message that barely mentions the product. Advertising is in your face cold hard offers. "Buy this item for $14.95 by midnight". It can be measured. Measured in sales and profits and whether it is worth doing again. As I have suggested numerous times....the ultimate branding is more sales. In 2009 there is no room for branding. As I wrote in a December blog post, Branding is dead in the way Madison Ave approaches the subject.  Just look at the graveyards of  “Brands” that Madison Ave. brought you over the years.  

There is room for more sales and THAT is where the silver lining comes in and why domains will continue to be strong assets with increasing values. The next wave of a boom economy will pay the biggest dividends to potent traffic. Sales, sales, sales.....nothing else will matter more. The problem with so many companies is they are no longer sales based. They have gotten caught up in branding and ego stroking to the point of collapse. If you enter 2009 and you have a force of of branders and order takers and not hungry sales people, your days are numbered. Selling is an art. It is strategic. It is personal. It is a skill developed by studying human nature. A skill developed by trial and error. A skill developed by role playing, A skill of presenting an item to a skeptic and making a presentation to win them over. Like a lawyer addressing a jury a salesman’s job is to overcome objections. As long as a potential customer is objecting, even if he is screaming and ranting, he is still a buyer. Most don’t know or understand this. They are too busy getting offended. There are fewer places to learn about sales, to develop those skills. There are no formal sales education in schools and universities. It's on the job training and if there is no one to train you it becomes exponentially more difficult. Selling is about creating desire, educating and things that it would take months to describe and years to learn. Most of the masters of selling are dead or don’t have to sell anymore.  

2009 has the potential to be catastrophic for many millions of people. It will cut across all economic levels. Nobody is immune. The strong will survive and thrive. The weak will just disappear. The strong with lots of employees and overhead that are carrying a lot of debt and burden will be restricted in their dealings and may not make it either. Growth will give way to survival. Treading water at a time like this is a great victory. Losing 10% of your business is not going to sink you. Losing 20% is going to make life uncomfortable but survivable. 30% or more and you are likely on life support and each passing month will make you even weaker. Many will just fade away, some without much fanfare. But the strongest sector is ours and for that, we should be very thankful. 

This is not our first downturn or economic collapse and this won't be the last one. But this one is as serious as it gets and it is likely to change our way of life for several years. Support the businesses you want to be around. Whether it be your favorite restaurant, watering hole or the cleaners you bring your clothes to. Many of these businesses have disappeared or are about to. The fallout from millions losing their jobs has yet to register. The impact of that is just starting to manifest itself and that alone will lead to even more layoffs. The thing to watch for is shortages and that is already happening and will get worse. 

First you have a glut of goods and retailers are anxious to get rid of everything so they don’t get stuck with too much inventory. But that leads to shortages and that is something to really pay attention to. In 2008 the big shortage was cash. In 2009 it will be cash and goods and maybe even gas.  

Lack of confidence is the prime problem and I see no reason to have much confidence at this point. When they passed the bailout package in November, they raised the FDIC limit of insurance to $250,000 per institution. I think it puzzling that on December 31st 2009 that insurance expires and reverts back to $100k. To me that is a red flag. Yes, they may extend it, but you certainly have to ask why it was not permanent to begin with? One thing about 2009, the industry will be influenced by things beyond our control whether we like it or not. We are at a tipping point. It could tip either way. But so far the evidence is weighing on the wrong side. Heavily on the wrong side. Much more to still be discovered. This has the potential to be a devastating period for many. I believe that some parts of the country may be wiped out. With factories closing and little hope of them ever reopening the basic foundation of many towns have been completely disrupted. Unless they have some diversity, it is a downhill spiral of events. 

Whatever happens in 2009 and 2010 is going to be one hell of a challenge for billions of people around the world. The Internet emerges as the winner at every point. The struggle between the old economy and the new economy had its first face off during the 2002 collapse. The old economy held on. Mostly by spreading rumors that the Internet was not secure and shopping online was risky. They BRANDED that lie and many swallowed it. That dog won’t hunt this time. This time they will try again but folks know better. This time folks know, understand and use the Internet all day every day. This time it won’t work. This time the Internet has won and the old economy needs to make the adjustments or get washed away. There will be no bailout package for blacksmiths. There should be no bailout for those that can’t survive. The jig is up and the game is over. There will be a significant consequence for giving away trillions of dollars. We will have a short “Feel good” type period and then the worst will hit. Too early to tell how that will manifest itself. It won’t be pretty. 

Schwartz with Forbes Magazine publisher and 
former U.S. Presidential candidate Steve Forbes

The one thing about 2009 is that domains may be our vehicle, but it is business outside of domains that should be the focus of 2009. Domains and the Internet are entering the age where they will both be recognized and take their rightful place. Domains have always been the real estate of this new era. It takes a collapse to have folks realize it. When they finally turn their attention this way, and they are about to, a new order will emerge and we are about to find ourselves on the top of the world. There will be tough sledding ahead, but I am here to tell you, we are entering the final phase of a 20 year plan. A phase that has been accelerated by the very thing we all fear. 

If times were always great the Internet would never assume its proper role. With what is coming, it is going to assume that role in a much faster and more dramatic way. It is a life raft in a sea of sinking ships and the naysayers we have battled 

have finally realized it. So 2009 is gonna suck really bad for many. It may become the single worst business period in recorded history. Many in our sector included. The life raft is not a place for comfort. It is a place of survival. Those that survive 2009 and 2010 will rule the world. Personally I go into 2009 knowing this will be the single BEST business environment I have EVER seen. The BEST. Folks open to work together, to try things, to roll the dice. Those that do things in 2009 will do big and bold things. They will taste success over and over again. Tough times create the greatest opportunity.  

As for domains, it all comes to the individual circumstance. Domains will remain strong, however some  domainers won’t. That is the circumstance that will drive the aftermarket in 2009. Plus I think you will see new types of investors come to the table because of 0% interest on their money, safety and both the housing market and stock market in crisis. I think until people have confidence in the people in position of power, this will continue to spiral downwards. That’s the way I see it. As always, time will tell.  

PS: In the interest of full disclosure. While I used the “Life raft” analogy above, the truth of the matter is that we are all on a cruise ship and they are all going to want a piece of what we have. Never underestimate how valuable what we have is. Never doubt it. If you are sitting with quality generic domain names that receive daily traffic, you are covered. For those getting eaten by registration fees, this is an opportunity to start over. Dump thousands and buy dozens



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.

Return to DN Journal Home Page

 Home  Domain Sales  YTD Sales Charts   Latest News  The Lowdown  Articles  
Legal Matters
  Dear Domey  Letters to Editor  Resources  Classified Ads  Archive  About Us

Hit Counter


Copyright 2009 DNJournal.com - an Internet Edge, Inc. company. 
No material may be copied from this site without expressed written consent.