When to be Bearish and when to be Bullish..?

How many times have you heard the phrase location, location, location? In the traditional Real Estate business a fantastic zip code will always win over the dream home located right in the middle of the I 95 Freeway and really the same can be said of the highest value domains. A one word, four letter .com, registered way back when the internet really was the new frontier can garner lots of interest when out to auction which more often than not results in a sale with lots of zeros on the end. So the big question is with the Real Estate Market still recovering from the 2007 crash with overall growth in the US for 2014 expected to be around 4-5% is the domain industry a more profitable bet for short and long term investors than bricks and mortar and even stocks and bonds…?

There are many bearish investors/economists out there who argue no absolutely not, that in fact the domain market is declining…. The recent addition of the new GTLDs they believe have and will continue to dilute the value of the .com domain. Many one word .com domains that 10 years ago could have attracted a million dollar price tag are failing to meet their reserve at auction further adding to their belief this is an unsustainable market.

Flipping this perspective on its head though I would argue that many of the domains that have lost their value over the last decade is simply because in this fast paced changing world they have lost their relevancy. I am quite sure 10 years ago if DVDS.com had come up for auction it would have commanded a six figure price tag – in today’s market it failed to meet its reserve when up for auction last November…

In this Capitalist driven world though where if you don’t move with the times you are left behind, I would argue this is the perfect example that relevancy is key and the domain market is no difference. Who buys DVDs now and do we really think that in 10 years from now the ever shrinking population that do will still be doing it then? It is that particular technology that has become redundant not the domain market…

Whether it be the initial registration of one of the new GTLDs or the purchase of an expired domain at auction or through one of the many dropped services the key to being a successful domain investor is staying relevant and two steps ahead of the marketplace – who would have thought 10 years ago zulily.com would be a domain name of any value? Facebook purchased in 2010 FB.com for $8.5 million and the burgeoning chinese market is absolutley obsessed with domains with numbers in them.

So what does all of this tell us? Much like the Real Estate industry and to an extent the stock market too a solid bet for a domain is something that will stand the test of time. In Britain a well maintained Georgian or Victorian property with an abundance of period features will always command a premium price tag compared to a house built in the 60’s or 70’s in a comparable location. Unless that is something like a huge intersection is built near or through it or a similar such event occurs to decrease the value. The parallel here in the domain industry being a seemingly valuable domain name such as DVDS.com’s value plummeting due to the expiration date of the product…Popular stocks have come and gone and yet people still overall stick to the traditional health and energy industries for a long term safe option. Perhaps then the Chinese have it right can we ever imagine a time when numbers become redundant?

With all this said I will go back to my original question is the domain industry the new Real Estate business? With a dose of caution I think the answer perhaps may be yes…Or in the very least they compliment each other.  Goodness me there are even services now where you can lease your domains out for a monthly fee… A great way to grow Pagerank and backlinks as someone else is trying to drive traffic to your site and they are paying you for the privilege at the same time.

Beware though buying and selling domains is not as simple as some may proclaim – think very carefully if you buy a domain for a long term investment –  will this name be relevant in 10 years? For a shorter more bullish investment you also have to be careful that you are not overpaying for the domain in the first place, interest in expired domains is extremely competitive and therefore deals can be hard to come by at times, though if you search long and hard enough you just may come across that diamond in the rough…

Click here for today’s updated list of Expired and Dropped and Expiring Domains over 100,000 domains published daily http://www.expired-domains.co

Clare Coggins 

Clare@Expired-Domains.co