Why generic domain names are even more (WAY MORE) valuable than gold and oil. April 1, 2008
Posted by unemployedalcoholic in Business, Domains, Investing, Life, curious finds, real estate.trackback
1) Domains are land. Because the name of the thing conjures up the thing itself (think about your browser’s address bar and its function), domain names ARE the landscape that they represent. The internet is truly an elegant system. As many early adopters have realized more than a decade ago, domain names are the “lots” on which “skyscrapers” (websites) can be built. This is a concept I first discovered at eRealEstate.com, I believe (one of Rick Schwartz’ hideouts…). The shorter, more generic, the more universally recognized AND understood AND commercial a name is, the higher the value of this virtual property. These parameters play the same role as location value does for land. Even better, the relative valuations of these parameters are likely to change MORE SLOWLY than the relative values of PHYSICAL LAND. For example, think about how long it would take for a name such as “Property.com” to lose its meaning and value vs. how long it took for Detroit to go from being known as “The Paris of America” to other, less dignified monikers. Think about the many run-down neighborhoods in big cities that used to be prime, ritzy, high-value, and sharp. Even if a bad website tarnishes a certain domain name’s reputation for a period of time, if the name is generic, it can be resuscitated and redeveloped much more quickly and easily… at least it would take a great deal more effort to bring some Detroit neighborhoods back to their former glory. Think about it.
2) Domains are the PIPES through which two of the most valuable commodities today flow: TRAFFIC (eyeballs) and INFORMATION. You can use domains to attract, direct, and manage traffic. Traffic and information are currently inextricably linked to the Domain Name System, and both can be very valuable when used wisely.
3) Domains are priceless possessions that can be given as gifts and retain sentimental value. This idea evolved as a result of a recent discovery I made… Both “CyranoDeBergerac.com” (17th century Frenchman and the Rostand play based on the former) and “LoveLetters.com” point to the same MySpace page. Keep in mind, these are two VERY generic and potentially highly commercial names. Another twist, the names do not seem to be registered to the owner of the MySpace page. The registrant, according to DomainTools, is one “Dave Lizmi” , a former rock guitarist turned internet entrepreneur, who appears to have at least another 700+ domains to his name. I have no idea who this is, nor do I presume to have any clue to the nature of the relationship between the domain registrant and the owner/author of the MySpace page, but this discovery got me thinking about the following…
People name stars after their loved ones… stars they will never touch or see up close… for all practical purposes, these things are as “virtual” to us as dreams and fairy tales are. Now, why not dedicate a unique domain name to your significant other instead? Could that not be just as meaningful, if not more meaningful to whoever receives such a gift? Should not the fact that you can actually make something of this domain increase its value? Cool stuff, eh?
I still maintain that everyone with a blog or a MySpace page should have a domain name linked to it. Everyone should have their own domain name on their business card, right above their email address. I believe that this may become the case soon enough in the future. This is just ONE of the many potential sources of demand for the priceless assets that our community keeps.
Thoughts? Reactions? Refutations? All I seek to do is promote a healthy and meaningful discussion. This is all.
well – I have several generic domains in the german speaking market and was suprised to find out that the one i was looking for was still there. i´m sure if u do search in other languages like french, italien or russian there are lots of other valuable names still available (probably not REALESTATE.xy
. . coz people simply act as if english would be the only language prospective customers speak . . ..
Jens,
That is true. I do believe that you are correct in that there is still opportunity and that we are still in the rapid growth phase of the industry – valuable properties can still be acquired in certain extension and IDNs. However, I also believe that English is still the safest bet (generic English domain names in .COM , .NET , and .ORG extensions). From what I know about Russia, English is a required language to study in the vast majority of their schools… I would say it is almost a second language in that country, and I am sure that there are similar trends in many other European countries. I would also say that English is still the international language of business, though this may change soon.
Sorry, beg to differ. We can live without domains but we cannot at the moment live without oil or even gold. At the end of the day, physical goods like oil or gold will always win over digital ones.
Your point is well taken, Wilf, and I had hoped that the title of this article would generate controversy. However, there are few truly useful applications in technology for gold (aside from being a luxury item, and one of the many possible media for exchange and storage of value), and oil will be quickly replaced as a source of energy as soon as it runs out… Energy companies buy up patents for alternative energy technologies constantly, and they can overhaul the energy delivery infrastructure quickly if they choose to do so, but it would be economically disadvantageous for them to do so while the resource is still found in *relatively* plentiful abundance on earth.
The domain name system, however, is currently inseparable from the internet, and it serves an important purpose in organizing and delivering relevant information to internet users worldwide. There is great value in the most generic and commercial domain names, especially ones that are connected to a useful website, quite a bit more, I should say, than in a barrel of oil or a pound of gold. It is value that can last for decades to come.
“…I would also say that English is still the international language of business, though this may change soon.”
For the moment, yes… though Chinese is coming up along very well.