20200313_corona How is the Corona virus going to impact your business?

Every time I turn on the television or check online news feeds, I get a sense the world is gripped in a palatable fear of the Corona virus pandemic. The virus is almost the ultimate incarnation of fear. It’s something that you can’t see and yet has clearly devastated families and loved ones around the world.

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An irrationality seems to have gripped many people as they clean out the supermarket shelves of toilet paper, tissues, face masks and tinned staple food. The fact that the Coronavirus does not cause a person to have diarrhea has clearly been ignored.

Recently, the terror seems to be flowing through corporates as they are now asking their staff to work from home and have enforced strict hygiene guidelines for those that journey to work. This seemingly continuous diet of fear has spread like a contagion into the financial markets as they collapse around the world.

How is all this carnage going to impact the domain industry or is it business as usual?

I remember in the midst of the Global Financial Crisis reading a blog article by a notable domain investor declared that it was great to be in an industry that was immune to the world’s financial woes. I must admit that at the time I scratched my head and wrote my own article stating that if we think we are immune to a global shock then we are kidding ourselves. Shortly afterwards, the PPC rates tanked and amounts paid for domains dropped through the floor.

The fear associated with the Coronavirus that is VERY different to that of the global financial meltdown of 2008. On the whole, the global financial plumbing is working well (although it could be argued the repo market would be in a terrible mess if it wasn’t for the fed), and the various central banks have swooped in to support the shock to their various economies.

People have been told to what? Told to go and work from home. How are they going to do this? Most will work from home via the Internet…..which means, there’s going to be a LOT more traffic heading to domain investors. In addition, people are told not to congregate together and last time I checked the shops were less crowded then usual…..but people still need to buy stuff to live. Out comes the Internet and clicking to access the staples of life.

The challenge of course is whether all those online stores can fulfill the deluge of orders that would have normally been supplied by traditional brick and mortar businesses. Underpinning this situation is whether the PPC rates hold up. What’s the point of a marketer advertising if they can’t supply the goods!

But then I heard that China’s economy is once again kicking into gear and the people of Wuhan are back to work….yippee! This means the global manufacturing powerhouse is gearing up to supply the product starved markets of the world.

I couldn’t help noticing that President Trump recently banned travel from Europe but NOT cargo. This means, that even if the pandemic lasts for longer than first thought products from Europe are still making there way to the biggest market in the world…..so PPC has the potential to be healthy.

In addition, I’m absolutely convinced that in amongst all the buying of the necessities of life that consumers will dream of the virus ending and going on a holiday….and it’s then when they click on a PPC advertisement for a cheap cruise deal (this industry has a lot of marketing to do!). Sure, this is all hypothetical but if I do a survey of my own friends, I can almost bet this is what they’re up to.

The big caveat for many domain investors is whether Google will decide to take a bigger share of the PPC pie. They did last time so why not now? The reason why is because they can’t….while sort of can’t anyway. Let me explain.

If you have all your domains with a single Google backed monetization provider then yes, Google can hack into your revenue line. If you have your domains with a company like ParkLogic (full disclosure – I’m a founder) then if Google takes a bigger share it will have a minimal impact on your earnings, if any. Why? Because Google is having to compete for every piece of traffic rather than serving it up to them on a platter.

How about the domain sales market? Sadly, I predict this is going to be a really bad year for domain sales. Investment in buying good domains is going to contract as business hold onto all cash that doesn’t directly generate revenue. It’s going to be interesting to see some of the public sales numbers that are published by some of the markets over the coming months.

There’s one thing for sure, 2020 is going to be one heck of a year for the domain industry. In amongst all of the business ramifications we mustn’t forget that people are really suffering and sadly, some are and have, passed away. After reading this article I would encourage you to take a minute to reflect on this final point and to remember those that have paid the ultimate price due to an intractable foe.

I pray you and your familes remain safe until we meet again after this trying time.

Michael