Blogs about the domain industry and the various players and companies within it.

Problems With The Domain Industry

Problems With The Domain Industry

I published an article about ChiP (Chinese Premium) domains yesterday and received a really interesting comment from a reader that I would like to unpack. For a start I would like to thank them for the effort they took in writing the comment as it’s clear they are really passionate about domains.

Escrow.com

As the comment is public, here is what they wrote:

Your advice to sell is terrible advice. And then you offer to help CHIP owners liquidate. Four-letter .com prices are positioned to move up substantially in the coming years and you recommend getting out now. You obviously needed a better translator on your China trip. SELLING CHIPS NOW AT LIQUIDATION PRICES IS TERRIBLE ADVICE. PLEASE DON'T HEED.

Yes, my advice may be terrible for a subset of the domain community that is wanting to hold their domains in perpetuity but here’s the thing. The whole point of having an asset is either it produces dividends in the form of an income stream (eg. Monetisation) or you sell the asset for more than you paid for it (ie. capital gain).

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Domainers Meet Dubai a Great Success!

Domainers Meet Dubai a Great Success!

Congratulations are in order to all of the organisers of Domainers Meet in Dubai. The conference concluded yesterday and I know that a lot of business will be conducted as a result. This good news is that there are plans in place already to run the conference next year.

From the moment I stepped off the plane at the enormous Dubai international airport I could feel the incredible surge of energy of a city and a country going places. It's hard to imagine that just forty years earlier and I would have been welcomed by sand dunes.....instead a bustling metropolis of amazing skyscrapers and spectacular architecture greeted me.

The tallest building in the world, the Burj Khalifa, stands out as a shimmering spire surrounded by an oasis of a manmade lake that contains dancing fountains which make the ones in front of the Belagio look tiny. Everything about Dubai speaks of grandeur and an amazing vision towards the future.

Likewise, Domainers Meeting is backed by a team that really believes in not just the physical expansion of Dubai but also the virtual. This theme constantly came through in the conference. It's clear that Dubai plans on applying the same amount of energy to domains and the Internet as it has to carving out the remarkable city in the physical.

I had the privilege of being the opening speaker and it was somewhat daunting as I stood looking across at the attendees. Why was this the case? Because I was standing in the sand dunes of the virtual Dubai and the people before me were eager to turn the sand into virtual gold. They were hungry to learn and apply the same levels of enthusiasm to domain names that they have applied to everywhere around us.

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Part 3 - How A Decline in the Chinese Economy Will Impact Domains

Part 3 - How A Decline in the Chinese Economy Will Impact Domains

This is the third part in a series that examines domains and the Chinese economy. The first two parts can be viewd by clicking on the following links: Part 1      Part 2

The biggest concern with a Chinese economic downturn is the impact that it will have on the rest of the world. As companies reduce spending and hunker down during the economic storm domain valuations will be the recipient of a perfect storm of less demand and massively greater supply courtesy of the new gTLDs.

Escrow.com

If you are considering an offer right now on a domain, then my advice would be to take it, as I believe we will be heading into some rough water over the next couple of years. I’ve never regretted having cash in the bank and if I’m right, then there’s going to be some real bargains available in the not too distant future.

The biggest concern for me is the value of domain traffic in a financial crisis. Users will still have value but I’m concerned whether the value will be fully realised by domain investors in a downturn.

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Why I'm Going to Domainers Meet in Dubai

Why I'm Going to Domainers Meet in Dubai

I’m really looking forward to heading off to the Dubai Domainers Meet conference later this week. There’s been quite a bit of scepticism about whether the event will be successful or not and a number of people have asked me why I signed-up so early.

When I look at where the global growth in Internet is going to come from it’s really centred around emerging economies and the third world. For a start, it just so happens that Dubai is positioned as a global hub in the middle of the majority of this region. It's by no means a coincidence that Dubai is hosting the world Expo in 2020.

Escrow.com

When I was traveling to ICANN in Dublin I happened to be on an Emirates flight transiting through Dubai and there was a radio show on the growth of Dubai as a regional economic powerhouse. It was clear to me that this was a part of the world that I really need to get to know, so I snapped up the chance to speak at the first Dubai Domainers Meet.

Likewise, last year when DomainFest Asia was held in Macau I jumped at the opportunity to attend. That single conference opened my eyes up to the significant opportunities and problems that domainers in China face. From the one conference I’ve already made some fantastic contacts and done a lot of business…..I’m hoping I will experience something similar at the Dubai event.

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Part 2 – How China’s Looming Debt Crisis Will Impact Domains

Part 2 – How China’s Looming Debt Crisis Will Impact Domains

This is the second article in the series on China. Click here for part 1.

Off the back of all of the China debt crisis, what’s going on in the domain industry? For the past year many western domain investors have been scratching their heads as they tried to work out why the Chinese were buying up all of the 4 letter/number domains.

Escrow.com

Other than a few reasons which were largely due to mysticism and numerology there was no sustainable underpinning of the value of many of these domains. In short, it was spectulation run mad that rapidly pushed up the prices.

Despite the underlying values being questionable there has been a rush by many western domain speculators to register short character domains. The total goal was to then sell these domains to Chinese investors for inflated prices. While some people have made money, many are in the process of losing their shirt as the giant global ponzi scheme comes crashing down.

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Part 1 – How China’s Looming Debt Crisis Will Impact Domains

Part 1 – How China’s Looming Debt Crisis Will Impact Domains

I’ve been concerned about China’s debt levels for quite some time and the impact that a Chinese economic meltdown may have on the domain industry. After returning from a week’s vacation I decided that it was time to start digging into the data and piecing together a number of anecdotal data points.

Escrow.com

It didn’t take long to discover that just about every major investment media source is concerned about China’s debt problems. Back in October 2015, The Economist had a little chart with the title, “Still Bingeing”, that outlined China’s total debt as a % of GDP. The chart can be viewed below

China bingeing on debt

On the 22nd Feb, Bloomberg News had a headline announcing that China’s debt will peak at 283% of GDP in 2019. To put this into perspective, the USA debt to GDP ratio is 104%.

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Fallout From the DN.com Disaster

Fallout From the DN.com Disaster

One of the most important things that any escrow business needs to do is keep up and running for its customers. The whole essence of being an escrow company is that you are the trusted partner between two or more organisations that don’t really know each other. Providing an escrow service is all about doing trusted transactions.

It just so happens Thursday last week the Chinese escrow company DN.COM was taken off the air by the Chinese government. Clients who were midway through escrow transactions had no way of finding out what was going on and large sums of money were left in limbo.

Eventually, DN.com sent out an email that indicated the problem was caused by a change in the entity of the business.

dn.com email

I must admit that there is a frightening chain of events that really strike at the heart of being an escrow business. For a start, escrow is all about being really careful with other people’s money….and as I said in the opening paragraph, it’s about trust. It’s all about being very detailed, focused and losing sleep over a rounding error in a transaction.

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Domainers Meet Dubai

Domainers Meet Dubai

On April 23 & 24, Domainers Meet, will be held in Dubai. It’s really shaping up to be a great event with speakers flying in from all over the world to share their intimate knowledge of the domain industry.

Escrow.com

I have the pleasure speaking on, “Domain Name Yesterday, Today and Tomorrow”. It’s a really broad topic and provides a huge amount of scope to really take a look at the history of domain investing and what the future is likely to look like. I must admit that I’m really excited about the conference and I’m looking forward to meeting a lot of new domain investors from that area of the world.

DomainersMeet Dubai

The conference is being held at the prestigious Radisson Blu Hotel, Dubai Deira Creek. Dubai is noted for its incredible modern architecture and some of the pictures on the Radisson’s website look absolutely stunning.

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Freddy Schiwek Launches KeywordDomains

Freddy Schiwek Launches KeywordDomains

Freddy Schiwek, the CEO of Luxembourg based Domain Invest, just showed me his new website keyworddomains.com. It’s an impressive, simple to use marketplace that allows domain names to be bought and sold without any commissions.

Freddy has been involved in the domain industry for over a decade and I have the privilege of counting him as a good friend. Several years ago he took the bold step to raise a considerable amount of venture funding to build a substantial domain portfolio under the Domain Invest brand.

The portfolio now includes single word domains such as jewel.com and short domains like jdm.com….both of which are highly valuable. Whiskey.com is one example of a number of particularly high end brandable domains in the portfolio.

I asked Freddy why he built keyworddomains.com and he replied, “I wanted a website where it was really easy to buy and sell domains and where good quality domains didn’t get lost in the masses of sub-quality domains. The problem with many of the marketplaces is buyers find it difficult to find the high quality domains and this results in the good domains not getting the exposure they need to get sold.”

Since Keyword Domains doesn’t take a commission on sales then in my opinion there is very little downside to setting up and account and adding your own domains to the platform. Although don’t be surprised if any low quality domains are rejected……Freddy does seem to be focused on providing value to potential buyers.

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Rightside - Quarterly Results are Ho-Hum...

Rightside - Quarterly Results are Ho-Hum...

I just listened to the Rightside quarterly reporting results webcast by CEO, Taryn Naidu. To summarise, there’s been some cost cutting and quarter on quarter growth is the same for the registrar business and declining for the registry and aftermarket.

Escrow.com

To be fair to the Aftermarket business it’s off a bumper third quarter and so the revenue of $9.3m isn’t a bad result when you consider it grew at 9% compared to Q3.

Verisign reported on 17 Dec 2015 that the number of domains registered worldwide across all TLDs has grown 5.2% year over year. The Rightside registrar business unit is growing at a sluggish 1.9% (up from 16m to 16.3m domains) by number of domains. Some questions need to be asked why the registrars are not even close to keeping pace with the natural global growth rate.

Rightside by Business unit

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