Reglikedomain industry desk

The Domain Name Bull Market Will Continue — 5 Reasons

With all of the uncertainty in financial markets, here are 5 reasons the bull market in domain names ought to continue.

Many financial markets are up and down, but domain name values continue to rise. Will this trend continue? Here are five reasons it ought to continue on its upward trajectory.

1. Supply and Demand. Firms are creating web sites in record numbers. This includes not just fresh web startups but also bricks-and-mortar firms that realize they need a web presence. Since the ideal domains for their businesses are by now registered, they are sending offers to current registrants. Good domains are resulting in multiple offers and thus pushing up prices. I recently met someone who started a hosted web applicaton. He dropped $10,000 on a good two word domain without blinking an eye — he realized that no one would take him seriously without a decent domain name.

2. It’s easier for lay people to buy following market domains. The process for buying an by now registered domain used to be very difficult. Now, thanks to services like Domain Distribution Network, many registrars allow clients to purchase by now registered domains from within their shopping carts. It will only get easier in the next few years.

3. The weak U.S. dollar makes domain purchases cheaper (for people outside the U.S.) Europeans, Canadians, heck — just regarding anyone outside the U.S. — is able to spend more in U.S. dollars for domain names. Although this doesn’t necessarily push up the “real value” of domains worldwide, it is creating added competition amongst buyers.

4. There’s a flood of capital looking for investments. There’s a lot of capital that investment managers need to put to work. And debt is still relatively cheap. 5 years ago few investors would suggest domain names as a viable asset class. That has changed.

5. Big firms still don’t understand the value of a good domain name. When they figure it out, they’ll pay top dollar for good generic domains.

6. (Bonus) Ad dollars continue to shift to online advertising. Enough stated.

Also on the wire

Other reporting from the domain desk.

User domains sales (and some unknown buyers) — Latest endDomain SalesUser domains sales (and some unknown buyers) — Latest endUDomain SalesUnder Armour, Mary Kay, SAP and more: Big names buy domainsSDomain SalesSales at NameJet last month — 10 notableLDomain SalesLawsuits.com Goes Up For Sale.Domain Sales.in extension crosses 1M registrationsDomain name sales up to £30,000 — End userDomain SalesDomain name sales up to £30,000 — End userUDomain SalesUser domain domain sales at Afternic — 31 endAnd (more) economics of domain name portfolios — Mike MannDomain SalesAnd (more) economics of domain name portfolios — Mike MannIDomain SalesIn Spanish Sells for $90,000 on Sedo — “Cooking Games”