Some might see 5 weeks vacation as wretchedly excessive, but man it feels good.. I think tuning out and changing gears like that adds years to your life. The pause has given me time to reflect and grow as a person. I think I'm going to slow down a bit.. Tippy-toe back into blogging.. Ease my tired fingers back into typing and see where the spirit moves me. I don't think I'll comment on your comments as much.. Please don't take offense to this, but by not speaking to each comment it will give me more time to write better stuff and to relax outside of work -- Something we all need to do more of.
So 5 weeks later a lot has changed.. And at the same time, reading this story shows me how little has changed -- and how little it is likely to change over the next 18 months. People are still figuring this space out, one person at a time. Every day while traveling I saw domain-related blog posts about old stories, written by people just getting that "Ah-ha" moment.. If you're a savvy domainer constantly trolling forums and news sites for the first glimmer of info about this space, then expect to be bored by a lot more stories like this in future.
I met a lot of deal makers on the road and did some reading about the financial markets. Those folks taught me that domain portfolios of today will get sliced, diced, levered and sold for much more money in future. They will get financed by the same bankers, covered by the same analysts, rated by the same agencies. Only the dollars and quantities will change. More money for fewer names is the future I envision.
Some of this is due to inflation, some due to industry growth, but domain names are going-up .. I firmly believe this to be so. It's the way of the world I suppose. Low interest rates lead to a real estate bubble which corrects as rates rise, which causes existing mortgage holders to default and debt markets to unravel... Which causes lower rates as scared bankers cut rates. The cycle always repeats in a world where few central bankers have the courage to let the market burn the forest to regrow in a healthier way.. Money keeps getting cheaper.. The new 1 million is 3 million or 5 million.
It's the printing presses that keep churning out the Benjamins and make us all feel richer. Only you can't buy as much good stuff with the money.
The domain name business has not historically ridden along on this bubble train. Now, in 2007, as "good looking" names without traffic have begun to get inflated and feel bubblish, the names that generate free-cashflow through type-in traffic are unfairly underpriced. It just doesn't add-up that names which "look cool" but make "no money" get equal or greater step-ups in relative valuation as those which carry the freight and pay the renewals in a portfolio.
I expect to see another leg-up in name valuations late this year or early in 2008 as PPC advertising pay rates firm and as existing ad networks try to grow their own revenues by syndicating incremental advertising formats (syndicated rich media which they sell at premium rates). Those ad pay-rates and a general realization by the man on the street that a high quality domain represents a "storefront", are going to make generic type-in traffic domain names much, much more valuable going forward. The sniff is out and generic defensible names are going to thrive in the months and years ahead. Even if those names only get a trickle of daily type-in visits.
That's what I see anyway (You could say I'm biased ;).
Reading domain related posts like this one and obsessing about daily domain name related news bites is a bit like watching a hurricane. We all have a vested interest in seeing where the storm will go, monitoring the minuscia, the trivialities. Looking for signals about the tempest's heading gives us a feeling of control..
Well this vacation has taught me that we are early in the earliest sense. New Internets may come, higher renewal prices may come, more rules may come, but domain names, (an address on the Internet) will be required long after you and I turn to dust. This storm is going to favor you if you own generic defensible names. The Internet is not going away, Trademark interests will try to over-reach, but they can't reverse the laws of gravity or trademark caselaw. Mark Cuban can dance on it's grave and proclaim the Internet dead, then go back to watching HDTV; but when Mark's kids get news in the future, when they shop for real estate, when they look for directions, when they write a letter to someone, when they pay a bill, when they wire money.. the Internet is how they will do it... and the site they "do it at" will need to have some kind of address.
I am betting that more often than not, that address will be a .com or the CC tld of the Country in which you reside. This perpetual motion machine of brand reinforcement will keep .com names valuable for a very very long time, providing the registry doesn't screw it up by pricing the space punitively .. we'll have to wait and see on that.
Quite a mishmash of subjects.. not a lot of direction in this post.. just some venting (some of which you've heard before) as I limber up my fingers and get back to work.
Have a great autumn friends.