Domain Vision 2010 and Beyond

Earlier this month Rick Schwartz wrote a pair of blog posts, they were his pitch to Microsoft.  He thinks they should  make an $8 billion acquisition and take out most of the top domain portfolios.  He explains how a procurement this size would give Microsoft a noticeable increase in market share overnight.  This is my favorite quote from Rick’s pitch and it sounds like it makes perfect sense:

Microsoft, Give me one hour of your time and I will show you mathematically how to grab the biggest piece of market share you can buy for the bucks and at the same time take the best most potent traffic away from the competition and secure the future. Why rent when you can own? Why pay out billions year after year after year leasing the traffic when you can own the asset and those mineral rights?

So, will Microsoft be buying $8 billion in domain names in 2010? Of course not.  Will Rick’s patter turn some heads? Of course it will.  Oh, did you hear Microsoft was at T.R.A.F.F.I.C. this year…  You’re not surprised are you?  As it played out, while at T.R.A.F.F.I.C., Domainer of the Year Michael Berken’s (who originally spawned the Microsoft domain buyout idea in his 2008 post) actually got to spend some time making the pitch he had been dreaming about to the Senior Business Development Manager of Microsoft.

Passionate businessman Aron Meystedt of XF.com Investments also has a vision.  He recently published an article on Symbolics.com challenging high end domain owners to do their part and reach out  to recruit potential whales that may be interested in domain name investing.  In his post, Meystedt revealed he recently reserved a full page advertisement in the Dupont Registry (print version) for his company, XF.com and is offering free initial consulting for large scale domain name investors that respond.  Click here to see the ad, it can also be found by viewing the DupontRegistry.com virtual magazine.

Even Rick Latona is sharing his thoughts on end users.  Latona will soon be re-branding his company “Latona’s Domain Brokerage and Auction House” on Latonas.com.  In his recent post titled “Marketing to End Users is Hard but Possible.  The Most Important Element is Time” Rick admits that big end users can be tough to land, he says an average response time from a Fortune 500 company is over a month (just for initial contact).  Now that Rick is solely in charge of running the upcoming T.R.A.F.F.I.C. auctions I feel like they will become more of an attraction for large scale buyers than ever before.

What does all of this mean to the average domainer you may ask.  Industry leaders, visionaries and top portfolio holders all focusing more of their time and effort on getting big players to invest more money into our industry.  Can you hear the sound of cash registers ringing can’t you!  but who’s cash registers are we talking about?  Well, what happens when markets are capitalized upon by big players?  Smaller players in that market get suffocated or bought out, eventually washed away.  Sadly, this is already happening.  With less and less money to be made on small aftermarket sales and the rising demand for  domains with better traffic and metrics, the small time portfolio holders are far less active nowadays.  Many have sold or dropped their portfolios and moved on.  I have seen this happen to LOTS of domainers already.  Hundreds of thousands of dollars down the drain (in many cases the $ was already down the drain due to the quality of their investments but at least they had hope) and the best domains from those portfolios are being snapped up at drop auctions by hungry investors.

My advice to you as I finish this column is to be aggressive and focus on a niche that you have a real passion for.  “‘Step up or step out” that’s one motto that I am going to keep fresh in my head while I am working towards my goals finishing out 2009 and heading into 2010.  In Domain Vision 2010 and Beyond, Part II I will be discussing the gTLD and IDN rollout and implications they have on the value of domain names in general.