Times are changing, we all know that, today, tomorrow and the foreseeable future can officially be classified the information age. Data of every form imaginable is literally at our fingertips from the moment we wake up in the morning to the time we go to bed. Hundreds of thousands of websites are out there purely to deliver statistics, analysis, commentary and news for any given subject we choose to access. Further more the mechanisms on how we access this data has evolved exponentially, from the desktop computer, to the super light laptop, the tablet, the ever changing phone to the watch.
So with more and more commentary out there suggesting the days of flipping domain names for a quick profit are now blips in the radar, as opposed to the heady days where seven digit domain sales made instantaneous overnight millionaires, how has this era in information impacted this trend?
There appears to be a general consensus in the domain industry that as the market has been flooded with information, sites such as www.expired-domains have popped up it has made it much easier for the end user to research their chosen domain name and buy them directly from auction houses like Namejet, as opposed to using a broker which was so often the case in the past. With hundreds of how to blogs out there regarding the expired domains life cycle, it does not seem too far fetched to imagine the owner of a startup tasking an employee to track down that perfect domain.
As with most markets as they mature, it is commonplace to see the shrinking of the middle man, industries typically evolve and strengthen and sell b2b, and keep the profits in house, but with many 5 figure sales recorded on a weekly basis it is safe to say the domain broker is here to stay for a while, they just have more competition from the end buyers, who have become savvy and wised up.
The changing shape of the bubble.
In the mid 90’s to mid 2000’s purchasing domain names had a low entry cost and could potentially yield rewarding results. Seemingly simple but irrelevant domains (often ones that were made up names could be picked up for $100 or less, years later the relevance of these domains evolved and many were sold for $1 million +. Once the profit potential of these domains were realized they were snapped up left and right by investors, businesses and amateur enthusiasts. After the dust settled very few good domain names remained. Those that were left were undesirable for various reasons including: random or nonsensical, in violation of a trademark, hard to spell, bad company names, or too long. To find recognizable, marketable and profitable domain names at reasonable prices is now virtually impossible even after the mass release of the new GTLDs. Many of these names are either being held by large companies such as Apple and Amazon, who registered the GTLDS such as .app and .kindle, as you can imagine the possibilities for such domain combinations are endless regardless of what industry you are in. Now being owned though by such large entities – room for profit has shrunk considerably..
The Google Impact…
In the past back to the good old days of domain investing search engines were relatively simplistic in the manner in which they gathered results and the order in which they were presented. These older search algorithms put a high value on EMDs or ‘Exact Match Domains’. If a user searched for ‘coffee mugs’ the highest ranked site would likely be www.coffeemugs.com even if other sites had more content, links and a higher relevance. Domains that were simple, marketable and commonly searched were valued above and beyond all other considerations. Many of these domains were ‘parked’ and filled with nothing but click through ads and dead end links. Whilst they often generated a steady stream of revenue for their owners, they were of little value to the end user as they offered virtually no content. Search engines operators recognized the problem with their algorithms and began the development of new methods for ranking search results. This development would see the relevance of domain names as a highly marketable commodity; become a thing of the past.
In the present day, search algorithms are more sophisticated and complex than ever. As with all things technological the rate of advancement is practically exponential. Computing power doubles approximately every two years (see Moore’s Law) as a result so does our ability to develop increasingly advanced software and search algorithms. The company at the forefront of this development is of course Google. With approximately 70% of all searches on the internet going through Googles’ search engines, this comes as little surprise. Since its inception, Google has continuously improved and refined the mechanisms and algorithms utilized to provide search results. One such refinement in 2012 saw the value and relevance of domain names plummet. ()
The ‘EMD update’ as it is called, whilst substantially improving the relevance and quality of end user search results; also caused a dramatic reduction in the viability of domain flipping. Google recalibrated the value assigned to domain names dramatically reducing their importance in how search results were ranked. Suddenly exact match domain names were not only an insignificant factor in determining a websites ranking, but in some instances actually further reduced their ranking. By reducing the overall significance of domain names in determining website rankings, Google dramatically reduced the value which could be ascribed to them. Any website which had previously relied on EMD to achieve high rankings saw their visit numbers decline and rankings plummet.
The need though is greater..
With all that said yes, the landscape for buying and selling domains has changed and possibly sites like ours have contributed to this. In this era where information is everything and is never static, it would seem logical that the domain industry would have to change and adapt to survive. With more and more high street retailer moving their main business online, acquiring that key domain realestate is actually more important and valuable than ever. Yes the competition is higher, but simultaneously so are the stakes, no one could imagine back in the 90’s 60 -70% of the top big box retailers sales would be generated through the internet and the company Amazon was a virtual unknown…
Before leaving don’t forget to take a look at our database of over 40 million expired domains. We present the data in a clean easy to use manner that is also mobile friendly and is completely free to access! expired domains