When the Internet bubble burst in 2000-2001, many people gave up on the Internet as a viable place to do commerce and there were great domain deals and domain drops that followed. Companies had lost vast fortunes on their Internet ventures (much were paper gains), and many wanted to dump anything they could that would yield some value, and lots of domains sold at rock bottom prices and many more were dropped.
I know of a few million dollar domain names that were sold around then for 5-figures each. People got burned by the Internet, and many were reluctant to spend more money on it. This is when many of today’s premium domain owners acquired their best assets, and these “bets” paid off, as the Internet has become a viable source of commerce.   Sometimes buying assets when everyone else is selling can be a bad idea – like “catching a falling knife.”   However, it can also have great payoffs, which made many of today’s domain investors very wealthy.
As we head into 2009, things seem to be much different than they were in 2000-2001. People know there is plenty of money to be made online, so they are more reluctant to give up their domain names – even if they need cash. This makes it difficult to buy “cheap” domain names to sell quickly at a profit.   Making it especially difficult is the fact that most of the big buyers are on the sidelines right now, spending money sparingly or not spending money on acquisitions at all. Some of the big buyers have even quietly become big sellers.
I don’t consider myself a big buyer, but I have not been making many domain investments lately.   I would rather have cash in the bank than a domain name that doesn’t generate much revenue but should be worth good money based on the name value alone. With the economy in its current state, I think most domain names of significant value have value if there is a buyer who has a plan for the domain name.   I don’t think there are as many people out there buying domain names at market value believing the value will increase.   Most people I know are buying domain names only if they are at a steep discount.
Had I not built Burbank.com and Lowell.com, I might be panicked.   Judging by the number of Yellow Pages submissions and inquiries I have received in the last 2 weeks alone, I know the revenue is going to be there in 2009 (at least I assume so). My development company now has a sales representative (albeit not on the ground), and we are going to get in contact with these leads and new prospects almost as soon as the calendar changes to 2009.
At the moment, revenue isn’t huge on these geodomains (under $1,000/month in revenue), but it’s growing as is the traffic and interest in advertising. The point of this post isn’t necessarily that you need to develop websites to make money, because that might not be true.   The point is that if you rely on domain investing for a chunk of your revenue or for all of your revenue, you should make contingency plans to generate money in the downturn.   Like a duck on a pond, all might seem calm on the top, but there are some pretty strong things going on just below the surface, and 2009 is going to be an interesting year.
What are your thoughts?

People frequently ask me what I think are the most important domain extensions to own for development and for protective purposes. My off the cuff first response is typically “.com and maybe .org.”
I registered a set of domain names for a new company a month ago, and I looked back on the names I bought this morning. I registered the .com for the primary website, as well as the .net, .org and .info for protective purposes. I believe these extensions have garnered the most recognition and trust amongst consumers, and I believe they are the most important to register. I don’t think anyone would try to pass themselves off as this company, but these are the extensions I care enough about to register.
This isn’t earth shattering news by any stretch, but just a tidbit of information about my new registration habits and thoughts.

Thank you to Chef Patrick for thinking of me for an interview!

I don’t like to write sappy posts, but I have much to be thankful for this year. On the personal side of things, I married a great girl a few months ago and things have been going very well. We are both happy and healthy, and have a lot of good friends and family who are close with us. Our puggle Lucy has stopped peeing on the floor, although she has more energy than a work-from-home guy can take sometimes!
While the economy has been in a tailspin of late, I really can’t complain about business. I launched Burbank.com, TropicalBirds.com, Lowell.com, several mini sites, and I own a few other pretty strong domain names that will be developed in the coming months. I also had a pretty strong year in terms of domain sales. I’ve made a number of new friends in the domain industry, and I have established many new business relationships with quality companies and people.
For me, 2008 was a year of change (personal and business), and I think the focus in 2009 will be to strengthen the core business and emerge stronger. Outside investment has been shaky lately with many added risks (markets down, companies facing liquidity problems, buyers not buying as much…etc). Right now, I would rather spend money investing in my websites and technology for my websites than buying new domain names. Sure, I will buy if the price is right and/or I want to develop, but I (and many others) are buying to hold less often than before.
I tend to always think ahead (almost to a fault), and I rarely look back at what’s been accomplished. 2008 has really been a good year for me (with a few exceptions), and I am very thankful for it. I know the predictions for 2009 haven’t been great, but I will keep myself focused on growing and strengthening my companies.