Domainers: Share your thoughts about 2010. What will 2011 be like?

[Stian]

So another year is almost by and I thought it would be interesting if we all could share our thoughts for the year gone by and for how next year will be for us domainers!

For 2011 I will try to work harder than ever, always on the look-out for bargains and always looking for opportunities to make a sale. I will also spend time developing some of the most suitable names in my portfolio (I know I say this every year, but this year I mean it) and I don't mean just throwing up a made-for-Adsense page, but proper development, whether it's a gaming magazine, an online store or a tourism website.

When you've had a lot of great sales in a short period of time it's easy to start thinking that domaining is easy and then start relaxing more, working less.. This is the most dangerous thing you can do in my opinion, as domaining requires you to spend hours each day in front of the computer in order to stay updated and follow the market. Reseller prices go up and down like a roller coaster these days and if you don't watch them closely, you will eventually be unable to separate a bargain from overpaying. I know I've bought names which I thought were cheap, eventually having to sell them with a loss because no one wants to pay as much as I did for them.

I'm entering my fifth year of full-time domaining and it's fun to look back at the previous years. What domains I started with, what names I got lucky with and what names I lost money on. 2008 was perhaps the most fun year, as every morning I woke up, there was at least 1 offer via e-mail, Sedo, Afternic or one of the forums. It was a great year for sales, so I started thinking it was easy making a living of domaining. I actually thought I could get really rich in a short period of time and that's when you start relaxing. Taking things for granted..

Then 2009 came and the financial crisis started affecting the domain market. This year was the year when I really started noticing that domain prices had reached a top and started declining rapidly. This continued into 2010 and I'm sure many who made their living from flipping domain names started getting worried. It wasn't so easy after all and I understood why many people threw in the towel, looking for other ways to make money.

What's interesting is that when the global economic crisis kicked in, the domain market weren't affected right away. I actually had many of my best sales ever during the first part of the economic crisis. It's like the domain market "lagged", compared to the stock market and not until late 2009/early 2010 we started really seeing that the value of domain names dropped. Domain investors ran out of money, had to liquidate domains for funds and tons of LLL.coms splashed into the market, resulting in reseller prices slashed in half. An LLL.com you could easily sell for $8k in 2008, suddenly went for $3,500 in a public Sedo auction. Shocking! .. and worrying.

Now, the crisis is recovering and the stock markets are back where they were before the Lehman collapse and most people state that the economy is slowly getting back on it's feet. Therefore it should be natural to see that domain prices in general will rise again throughout 2011 and keep rising to reach new tops in the future.

There's been a lot of great sales in 2010 and even the "minimum" reseller prices have gained throughout the last few months. I think we're on our way up again and that we will see new investors entering the domain market, resulting in higher than ever demand for domain names. Work hard, keep developing your business and don't take anything for granted.

I wish you all a Happy New Year and a prosperous 2011 with plenty of business opportunities and portfolio growth!

 

[Gerry]

2010 started out stellar for me! I had 16 sales on Sedo in the first 5 months. And then everything dried up.

I continued to get offers but I believe I only had one or two sales on Sedo for the rest of the year.

Sales via email contact were also steady the first half of year but dwindled in the remainder.

I continued to buy on a regular basis.

More importantly, I built more sites with great keyword names bringing in decent traffic and adsense revenue.

As for DNF, this is the first year for the NFL pool and I have had a blast even though I have not been a weekly winner (still hoping) but I am in the chase for one of the season finale top three spots.

2011 is going to be difficult for me on the domain side of things. It will have to be a passive business. I will be starting a new certification that will be a very intense 6 month program with a combination of study, lab, practicum, and internship. However, I am very excited and very anxious to pursue this certification and am looking forward to it.

I have committed myself to helping a few start up businesses, essentially performing the role of business manager, on a pro bono basis. Two that come to mind have incredible potential. These are brick-and-mortar businesses with exceptional business models and funding in place to get off the ground. The up side to this for me is increased revenue from adspace on site design and promotion. Both look very promising for a continuous revenue stream. Too many people are only concerned about getting the front end dollars for a project. I can assure you, foregoing that front end payment for the back end side of things is much more rewarding. A continuous revenue stream paying month after month and year after year is my preference.

Beyond that short term view of 2011, everything else in up in the air. When I do have spare time, I will work on taking more sites live. And I will be studying creating apps vs sites for product and service enhancement. I will do my best to keep up with reading and studying trends and technology.

 

[hugegrowth]

2011, if the general economy holds together will be better for domains than the previous year. More countries developping and more people/businesses needing to get online and needing good domain names. I'm hoping the slew of new tld's won't amount to much, and .com/net/org and country codes will continue to be preferred by most. I think the weekly sales reports will stay robust, in 2010 you really saw more large companies step up and buy good quality domains.

I'm hoping developping tools will get easier to use and there will be more options to monetize sites. I'd like to develop more of my domains to add value to them and increase revenue from them.

I see myself selectively culling some names from my portfolio, and only adding good quality names.

In 2010 I started getting more domain enquiries from end users (like realtors and people who sell products related to domains I have), even though many don't want to pay much - the trend is people are starting to care more about having a good domain name.

I am interested to see how the .co extension will fare in 2011 after all the big sales this year.

 

[linkdomain]

i will continue to not buy:

.xxx-xxx.com
.mobi
.co

 

[Stian]

Doc, I believe 2010 is the year where I've gotten the least offers via Sedo. I seriously think it has to do with their design makeover, as I don't think I've had any lesser quality domains on Sedo in 2010 compared to previous years. Just look at the number of views on a particular Sedo auction compared to before they re-designed the site. A really good domain (like a strong keyword .com, LLL.com or even LL.com) used to have at least 1000+ auction views by the time it ended, now the same type of domains usually have around 300-500 views when the auction ends! That's a big difference and it proves a HUGE decrease in auction exposure after the redesign.

BTW, good luck with your studies. I know you're a well educated man alright.

Hugegrowth, I can co-sign what you're saying about more end-user interest in 2010, but as you say, very few companies are ready to pay the big bucks for a domain they really want. In many cases I've received end-user inquiries from rather big companies who offer way less than what I could get from a quick reseller flip on the forums. Let's hope for 2011 that more companies and people outside the industry understand the value of domain names and how lucrative it is to own a generic domain name within their niche.

 

[Gerry]

Doc, I believe 2010 is the year where I've gotten the least offers via Sedo. I seriously think it has to do with their design makeover, as I don't think I've had any lesser quality domains on Sedo in 2010 compared to previous years. Just look at the number of views on a particular Sedo auction compared to before they re-designed the site. A really good domain (like a strong keyword .com, LLL.com or even LL.com) used to have at least 1000+ auction views by the time it ended, now the same type of domains usually have around 300-500 views when the auction ends! That's a big difference and it proves a HUGE decrease in auction exposure after the redesign.

BTW, good luck with your studies. I know you're a well educated man alright.

Firstly, thank you for the well wishes.

Secondly, you are so SPOT ON regarding the Sedo makeover. I no longer send a domain to auction as I do not believe and do not see additional bidders. It has become a matter of negotiating via Sedo network which absolutely sucks. The big SUCK. As mentioned, nearly all of my sales came at the beginning of the year, perhaps in the first 5 months or so.

Their makeover was not only a disaster for their auction platform but I believe for their users as well. Honestly, I can not count the number of times I have purchased or bid on names as I saw the ticker for time remaining. That is gone. No more. Plus, the usability of their site makeover left all of us wondering what in the hell is going on and where is our stuff! Seriously, I still can not find where the offers are for me to respond to. I have to make sure I save the offer announcement email so I can follow that link back to the offer location.

I know you have been for quite some time but I am glad to see you developing more sites. A 60%-75% decline in PPC revenue over the previous year's 60%-75% drop in PPC is unbearable.

 

[Stian]

Firstly, thank you for the well wishes.

Secondly, you are so SPOT ON regarding the Sedo makeover. I no longer send a domain to auction as I do not believe and do not see additional bidders. It has become a matter of negotiating via Sedo network which absolutely sucks. The big SUCK. As mentioned, nearly all of my sales came at the beginning of the year, perhaps in the first 5 months or so.

Their makeover was not only a disaster for their auction platform but I believe for their users as well. Honestly, I can not count the number of times I have purchased or bid on names as I saw the ticker for time remaining. That is gone. No more. Plus, the usability of their site makeover left all of us wondering what in the hell is going on and where is our stuff! Seriously, I still can not find where the offers are for me to respond to. I have to make sure I save the offer announcement email so I can follow that link back to the offer location.

I know you have been for quite some time but I am glad to see you developing more sites. A 60%-75% decline in PPC revenue over the previous year's 60%-75% drop in PPC is unbearable.

You are right, but I do believe that I will some day get used to the new Sedo interface. I'm actually starting to remember where to find this and that now.

As with PPC revenue dropping, it hasn't really concerned me as I have never really been into parking. I guess I'm so afraid of C&D letters that I refrain from parking my most valuable domains (at least not LLL.coms and other valuable acronym domains). But when flipping gets hard I start to think of other ways to make profits and the success stories I've heard from certain other development projects makes me want to do the same. Hence why I'm going to focus on getting a few good sites up and running in 2011.

 

[katherine]

Predictions for 2011 (running on from previous years):

• parking will still pay peanuts but will not die
• domainers will depend more on domain sales to end users than other revenue channels
• the value of quality domains will continue to increase but crap domains will be still worth crap (surprising isn't it)
• .com will reach 100M registrations
• .co will be a disappointment for domainers
• .mobi/.tel/.asia zones will continue to shrink into oblivion but the stream of gullible newcomers will never dry out
• ccTLDs will continue to shine
• fraud and corruption within our industry will continue to be exposed (Assange please take note thanks)
• further industry consolidation
• domainers will regret selling their LLL.com for mid-$,$$$
• regulation of the Internet, censorship gaining ground as the Golden Age of the Internet is drawing to an end

 

[tetrapak]

Nice summary Kate!

I would add that numeric domains (nnn / nnnn.com mostly) will gain more ground due to the expansion of Chinese domain market and 4.cn.

 

[DomainMagnate]

Good thread Stian!
Those of you guys who know me better probably noticed that I wasn't very active in here this year and haven't posted on my blog much, that's because over the last couple years I've decided to drastically reduce my portfolio, from 3-4k domains in 2008 to just a couple hundred now and shift priorities. Basically once the market prices stopped going up and started going down my whole model of buying cheap short domains waiting and selling to resellers for more sortof crashed. I still do flip names occasionally wherever I find good deals but the majority of my revenue comes from sites, thankfully I had a few well established sites which bring stable revenue and built more this year.
I've been involved with all the aspects of web development, SEO and monetizing sites before I got into domaining and I have to tell you guys things got much harder and more competitive in this, I hate to think of how more competitive the main niches will be in another 5 years, but there is still good money to be made if you know what you are doing. I had great success with buying sites in the last few years (I posted a few stories on my blog about this if anyone's interested), but lately it's become virtually impossible to find any decent sites for investment that make at least a few hundred bucks per month and at a reasonable price. The good, well established and clean sites frequently sell at flippa for crazy revenue multiples like 3-7 years revenue and I bought all mine at 10-15 months. The vast majority of sites being offered for sale everywhere are pure crap - sites made for sale, with inflated stats, short revenue history and with questionable traffic sources, which are highly likely to disappear once you buy them. That's why I was able to buy less good sites in 2010 and had to build more myself.

Funny story is I had about 40 sites built in 2010 (not the cheap mini sites kind, real affiliate sites on good domains and with a lot of link building involved) and most of them don't make enough to even cover the costs (I hope they will next yer though), but the ones that did take off make the whole plan rather profitable. You miss some you win some, I do try to stick to my niches and build more of what worked, trial and error here.
So I plan to focus almost entirely on improving my current sites and building new sites and try to learn more about affiliate marketing and media buys as now all my traffic comes from SEO. I also plan to gradually sell off most of my non revenue generating domains over 2011 and try to buy a few more good ones for development.

I know I might be at a minority when saying this, as it is a domaining forum after all, but I just don't see that many opportunities in domaining now (not what you'd expect a "domain magnate" to say, right maybe I should change my username to sitemagnate or something like that). Flipping margins shrink, ppc is down and buying revenue domains is so expensive and risky its hardly profitable any more (unless you're in for the very long haul and are well bankrolled), end user sales are likely the only thing left, but I'm not that good with it and doing this stuff full time I can't really take the risk of putting a large chunk of my time and money into something I don't fully grasp.
However I'm glad to see quite a few people who got into in the late 2000's just as I did and didn't have the privilege of hand regging top generics are still able to do this full time.

I don't expect much to change in domaining in 2011 and no, I think LLL.com's won't just start going up in value for no particular reason. Prices will get stabilized, people will get more educated about domains - which means more end users, but also low end user sales margins and more competition for bigger companies and hopefully more interest in aftermarket auctions
Probably some more useless tld's which always present some opportunities for quick flips and a lot more domainers saying they want to develop some sites, but not having much clue about this and in the end just paying to get some cheap mini sites built which rarely even earn back their costs in adcents.

If you want a quick tip - the one thing that makes sites and development projects succeed is continued determination and work applied with it and that may take a few years, so unless you are ready to commit to that don't get into any serious development projects. The time when you could build a quick site and get a stable revenue stream are gone, unless you just wanna earn $5 per month.

 

[Gerry]

Perhaps raider will have a thread related to domaining in 2011.