There may seem to be a lot of smoke and mirrors in the fledging Domaining Industry. Behind it all is some very down to earth basic economics. The Law of Supply and Domain. Little mention of that fact was made when ICANN announced that it will be increasing SUPPLY – by creating a lot more Domain Name Extensions.
Looking at the facts ALL the .COM ONE WORD DICTIONARY NAMES have already gone. If you care to search Latin, French and Greek One Word Names you will find them pretty scarce too. Even all the nonsense letters and most numerals up to 4 characters have also been scooped up already – and it is becoming increasingly harder to find attractive two word domain names for specific groups of word. Just have a look at the poor quality names remaining available which start or end with the word DOMAIN.
According to Economic Principles when Supply runs out there is an increase in price – as Demand can no longer be satisfied with what is offered to the market. An ICANN being part of the Capitalist world adopting true entrepreneurial vision as the Monopolist it is sees that there is money it can make in releasing new domain extensions. However what it can’t do is increase the supply of .COM names that are attractive for Commerce. Therefore it can be expected that the value of .COM names in particular and the other TLD (Top Level Domain) Names will all increase in value due to market forces.
What this means for current Domain Investors is that their stocks will rise. That the Domain Names held at present by speculators, investors and businesses will appreciate in value. Premium Domain Names (Highly Sought After and Also Highly Priced) have for some time been appreciating in value at the rate of 22% per annum (from 2003 to 2008). It can be expected that trend will continue and that even the less prized domain names will also rise.
That does not mean all domains will appreciate at the same rate. Obviously the more attractive domain names rise in value first – as they are more sought after.
How can you best cash in on the opportunities in the Domain Industry? First you need to get involved. There is nothing to be gained sitting on the side line as a spectator. Those who are active in accumulating and developing domain names will make the most money. The less active domainers will for awhile only make small sums. Yet as Demand proceeds to absorb more and more of the Supply there is likely to be a re-rating of valuations which should see many Domainers celebrating in the streets.
With the opening of the Domain Exchange in Hong Kong the pace in the Domain Industry should soon quicken considerably. Therefore do not waste time thinking about it – jump in now!
