My Predictions For 2016

My Predictions For 2016

At the end of each year I like to reflect on the past twelve months and then try to make some predictions for the coming year. In a nutshell, I believe that 2016 will see an incredible amount of change in the domain industry. Here’s a few predictions for you…

Shanghai Index

The current Chinese powered boom will peak by the end of quarter one as the Shanghai index continues its rebound. Chinese investors that were looking at exiting money will return to the more liquid stock market as a source of investment returns. Those domain speculators that have invested in long strings of numbers will find they are left holding their assets.

Escrow.com

In an effort to curb costs domain investors will seek to outsource their domain management to firms that provide such services. The economies of scale derived by such firms will free investors time to concentrate on other investment opportunities.

Downward pressure on earnings will continue to place stress on large portfolio investors as registrations costs increase. This will mean that there will be greater numbers of more marginal domains dropped. Those investors that have scaled will be looking for an exit through either marketplaces that are acquiring domains (eg. Godaddy) or portfolio owners that have managed to extract additional value from traffic.

Consolidation of the new gTLD registry market will begin in earnest as the unprofitable registries seek an exit to recoup some of their investment. Successful registry owners will be in a buyers’ market where they will be able to pick and choose whom they acquire for often massively discounted rates.

Traffic domains will continue to underpin the wealth of the domain industry. Additional revenue streams will be developed off the back of domain traffic that is much broader than just the advertising. Understanding true “user intent” and what it means will open up significant opportunities for domain owners that have aggregated large traffic portfolios.

The traditional domain brokering business model will change as the small number of good brokers come under increasing demand from a larger and larger pool of sellers. As the laws of supply and demand come to bear, sellers will offer inducements to brokers to attract attention to sell their domains.

Late in the year, inroads into new management tools will assist domain developers in scaling the development business model. This problem has been the Achilles heel of the development industry and has limited much of the growth in this direction….so keep an eye out on this space.

Consolidation of registrars, monetisation providers and registries will continue as founders seek to exit and economies of scale come to bear on business models. Innovating businesses will be snapped up as speed will become an important asset in scaling faster than competitors.

Despite Marissa Mayer’s (photo above) best efforts, Yahoo will continue to languish and Google will continue to consolidate its hold on the domain industry. As Google’s grips tightens its grip, more and more alternative advertising sources will become viable for larger numbers of market verticals.

NamesCon will be hugely successful and run simultaneously as Affiliate Summit West will be an event that introduces new blood into the industry. The Domain Conference in September will continue to grow and Dietmar’s decision to move Domaining Europe to the Netherlands will pay dividends. DomainFest Hong Kong will really expand as a premier domain conference off the back of the growing Indian and Chinese markets.

So that’s a few of my predictions for 2016. It will be interesting to see how many of them come to pass…..I know that a number of them are already moving forward. See you all at NamesCon in early January.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

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