Your wrong……there is a downturn for good reason.

I have been buying domains since August of 1995, and own thousands of high-quality, generic domains…..I don’t buy expired traffic, and I have only sold five domains since 1995. So I am not any noob by any standard and make 98% of my income from PPC.

If this was a downturn like any other recession or market drop I would agree with you, however there is now 35% more U.S. dollars in the money supply. Inflation is coming…..once the sh*t hits the fan you won’t be able to sell domains and you will make very little off of PPC. The entire ad market will adjust the CPC bids downwards. However, if you can weather it until about 2015…..then I agree with you strategy.

I also don’t think there are many real domain bargains out there……that has just become a popular “in-thing” to say. Domainers are still buying like they are blind.

In the interm……the next several years I see a total market CPC adjustment downwards, even as more companies and individuals start new businesses. There will be plenty of advertisers, they just won’t be paying squat since the conversion will be much, much lower under a cloud of hyper-inflation.

700 Billion towards a bill of 100 trillion does not pull this country out of the sh*tter. Imagine if you had $700 to pay towards a bill of $100,000 . This is what we are up against and if a can of beans costs $20 folks won’t be buying anything frivolous or dispensable anymore.

I hope you are sitting on a pile of cash……otherwise you will get burned. Prepare. This is not doomsday scenarios……this is reality of what is coming. This is just the first phase of the downward trend. Right now many folks are just sniffing the air for what might come, or are in denail, instead of preparing.

I don’t think that was a mistake. Since you made a 400% profit, you can get 5 more names of that caliber doing what you did before. I used to feel bad about selling for only 200-500% profit within a few months but not any more. If you reinvest those profits, you can benefit from the compounding of the massive interest (profit).

Johnny,

What does the average domainer do then? Hide cash under the pillow? Put it in the bank? Fact remains generic domains are still among the best investments anyone can buy. The doomsday scenario you write about makes it even more important to keep investing in quality generics – not less.

If CPC completely disappears, sell the invested domains for multiple 100’s% profit. CPC going down does not devalue generics to the end user.

You don’t need to be a rocket scientists to see domain values have fallen, go to any auction or domain forum, or look at names with values that are easy to measure such as lll.com or llll.com. This is a very real and substantial downturn, the blog post title is meaningless.

Johnny hit the nail on the head.

Make sure to renew domains out as far as possible, especially the best of the best.

Times are gonna get slow for all advertising but when things bounce back more ad dollars will continue to move online thus making good domains increase in value.

>>What does the average domainer do then? Hide cash under the pillow?<<

Not a good place. I’ll be looking there

“once the sh*t hits the fan you won’t be able to sell domains and you will make very little off of PPC.”

Johnny: When you believe that happens, let me know and I’ll buy your portfolio for $1.

While I agree the US economy is a total disaster and there is a global economic crisis, there are many other countries with a relatively healthy surplus.

Simon writes……

“While I agree the US economy is a total disaster and there is a global economic crisis, there are many other countries with a relatively healthy surplus.”

I agree with you.

I can’t comment about PPC but I don’t think domaining is in the tank. If you look at domain trends for com vs dow, it’s pretty clear that LLL.com is the winner. And that is a very specific statement about one type of com but all domains have value and it’s always more than the disturbingly meek stock market. I have put up some charts to this effect on my site.

Domain name values are readjusting. They had been artificially high as a direct result of domain tasting. Domain tasting had interfered with the drop process and created an artificial scarcity of good domains and that coupled with the dubious auction processes drove the price of domains. The price of domains could continue to fall. However the effect of easy credit being turned off won’t be seen until late 2009.

In June 2008, ICANN approved the resolution to limit domain tasting. The effect can be seen on this graph as many of the domain tasters immediately stopped mass domain tasting.

http://www.hosterstats.com/Detailed-com-Statistics-2008.php

The effect of domain tasting over the past few years really inflated .com to such an extent that millions of domains were being registered and deleted each day. It also inspired classic bubble crazes like the LLLL.com one. I think that a lot of those 4L sales were domainers selling to other domainers.

Hi All,

There’s a new generics and long-tailing trend, all related to what people actually type into the search box. And, as long as Internet is there, and someone doesn’t come up with a better naming scheme for web spaces, domain names are going to be a valuable investment. See this blog: domain-purchase.blogspot.com.

Generic domain names, if you are lucky to find a few, don’t cost any more than $10 a year each, to just park and forget and the herd is taking to it like crazy. Where do you get a better investment proposition? It’s not just a share or a bank note, it’s capital!

Tony,

Use your cash to develop your sites. PPC is getting diluted and the business must evolve. Purchasing more sites that slowly thin out your portfolio is not necessarily a good investment. Development of those great domains you own can be a much better return on your cash. This way you build a brick-and-mortar business on the back of your asset that can then be leveraged with the other sites you develop.

Conor