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In
the meantime, the data we get for our weekly
domain sales reports continues to show
the market holding steady. Speaking
personally, my own aftermarket sales so far this
year have been the best ever and I am
hearing anecdotal reports from friends who are
saying the same thing. Most have told me that what
they are seeing is slower domainer to domainer
sales, but much stronger end user sales.
That corresponds with my own experiences thus far
in 2008 (I rarely sell at wholesale domainer to
domainer prices).
DN
Journal's sales database certainly showed no
evidence of a slowdown in the first quarter of
2008. As I reported in early April, 1Q-2008 wound up being the
best domain sales quarter reported since we started tracking the market back in the fall of 2003. A total of
$38,029,543 in domain sales were reported in 1Q-2008, a spectacular
78% jump over the $21,253,105 reported in the first quarter of 2007 - before the current dislocations in the general
economy started appearing.
1Q-2008 was also
12% better than the $34,089,484 registered in the fourth quarter of 2007. For all of 2007
$120,805,509 in sales were reported - an average of
$30,201,377 per quarter. So the latest quarter was
26% higher than the average quarter last year.
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Rick
Schwartz
T.R.A.F.F.I.C. Co-Founder |
During
a luncheon at the T.R.A.F.F.I.C.
conference later this month in Orlando I
will report on how the second quarter
stands at that point in time (we will be
half way through the current quarter when
I speak) and that should provide some
further insight as well. We just published
our exclusive T.R.A.F.F.I.C.
Orlando preview article and in
that piece, T.R.A.F.F.I.C. co-founder
Rick Schwartz had some interesting
comments about the relationship between
domains and the general economy.
"In
an economy like this, marginal domains
will be the ones that will suffer the most,"
Schwartz said. "The majority of the
domains I see, are just plain worthless.
In times like these folks get more
choosey. But they don’t stop buying.
I think the market is still expanding. New
investors are always coming in and some
are coming in with deeper pockets and
looking for a new area to invest in. The
things we have taken for granted for a
decade or more are now being realized by
others. I would expect volume of domain
name sales to continue to go up."
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Of
course return on domain investments is closely
tied to the Internet advertising market. As
long as advertisers keep spending on pay per click
ads and buying domains to gain direct navigation
traffic (or start new business on), then the
domain channel will continue to do well. There was
a lot of new evidence this week that Internet
advertising is still going strong.
In
our Lowdown
section May 1 we told you about a new Forrester
Research study that said 72% of 333
interactive marketers surveyed expect to keep
their interactive spending on plan or increase
it in a recession." Advertisers are
especially committed to performance marketing,
with more than 80% planning to maintain
or increase investments in e-mail and search
engine marketing channels.
| Then
on May
2 we reported on a Portfolio.com
story headlined Recession? Not in the Ad Biz
in which author Willow Duttge wrote
""Sure, the U.S. could be in a recession.
Consumer confidence is declining. Food and gas are so expensive it’s more cost-effective to stay home and diet. But the
advertising business (of all things!) is actually
benefiting from the painful spectacle of the traditional media landscape fragmenting into shards."
Duttge
added "The internet is continuing to oust broadcast TV, print, and radio from their once-secure position
as the automatic repository for ad dollars, and the
complex |
The
online advertising business
continues to fly above the economic
clouds. |
| environment that’s been rattling the advertising and media industries could actually function as an
economic buoy during these hard times." |
|
At
the end of next week we will be publishing
what I think will be a great May Cover
Story on Kevin Ham, who may be
the world's most successful domainer. In the
extensive interview we |
|
Kevin
Ham |
did
with Kevin for that piece he said the domain
business could experience some short term
pain, but that the long term outlook was still
rosy.
"The
global recession is something that is
natural, as all things have a very cyclical
nature," Ham said. "The seasons,
the economy, product life cycles, and our
lives all have a very cyclical nature. So
the recession and downturn are something we
should expect and plan for."
"In
the short term, I see some hard times coming
in the industry. It is similar to the real
estate market - the hype is believed
by everyone," Ham said. "In the
short history of the Internet, we have
already gone through it once in 2001 and
seven years later are in danger of going
through another correction. However, long
term, if you are wise, as was Joseph
during the seven years of riches and the
seven years of famine, it will be a time
of great opportunity, much in the same
way 2000-2003 was. The Internet is still in
its infancy."
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Opportunity
was also a theme Schwartz stressed in our recent
interview. "If you are sitting in a strong cash position, there will be some great opportunities whether it’s buying a great domain name or a piece of property at a fraction of what the cost might have been a year ago. Or even a company in
trouble," Schwartz said.
"Those short of cash will be forced to sell domains they otherwise would not sell. So that creates a great opportunity for those
sitting on cash and forces domains to the market that otherwise would not be on sale. So that is why I
have said that 2008 will be a record year for domain sales. There really is little question in my mind. The recession actually forces folks to do more
business," Schwartz concluded.
The
current circumstances are certainly going to make
for a very interesting year. Stay tuned -
we will be here to tell you about it as it happens.
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