Domaining in 2009

Subscribe to Elliot's BlogWhen 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 and, 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?

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn


  1. “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.”
    That’s how I look at the domains in this economy.
    But I always believed that domains have and will keep their value given that one does not have just junk domains.

  2. Elliot, I love the way you post a “Live” case study about the development of your geo properties. It gives the rest of us and idea as to how things are going, since you’re willing to share your experience. Too many domainers out there are real ambiguous about their story, making it hard to understand what’s really going on. My thoughts: we’re following the same path as you: less buying, more development. Maybe a little more drinking — 2009 looks to be a rocky year.

  3. Thanks for the income indicator on the geos. Over time it increases exponentially, but the insight into the slow initial pace is valuable.

  4. 2009 is the year where most domainers will finally start catching up with the times and face reality. Many have already gotten burned with investments made over the past 1-2 years… valuations and the outlook overall and such has depreciated quiet a bit. It’s development that will save many. No other choices, no and, or, if or buts… It’s what domains are for, not to be flipped every month, or parked at every one of the 30 parking companies… Domains are addresses for a business. The vacancies signs will be coming down, and businesses will be going live.
    Will be a very interesting year indeed 🙂

  5. Elliot
    There are buyers out there for domains and you don’t have to deeply discount them.
    I’ve sold $150K in domains in the last 60 days. I don’t say it to brag, we typically don’t report our sales. I’m just making the statement to let people know there are buyers out there and they are buying and you don’t have to give your domains away to sell them
    The buyers have plans for the names I would bet – which was my point. There are less buyers buying to speculate now than there were 6-12 months ago (ie names). There are plenty of people willing to spend lots of money on domain names that they can justify buying. Speculation on domain investments is down, which makes it more difficult for people to buy for flipping purposes.

  6. I was expecting this to be an article on your thoughts/projections/tips/insight on domaining in 2009. Instead you just said “less people are buying”. Um… yea… thanks for the “insight.” I guess I’ll just have to read
    However, I will say it’s interesting to know that your incredible geos only generate $12k a year. That’s surprising but I always knew domainers dramatically over-estimate how much traffic/rev their domains were making. The potential and what you’re doing with them is excellent, but I can’t see living off that alone…
    I am sorry that this post didn’t meet your expectations DC Mike, but I appreciate the time it took you to write your constructive comment. I suppose I would have called it “My Projections or Predictions for 2009” had that been the intention of the post. I think Mike Berkens has great insight and he’s a good friend, so I am happy that you read his blog.
    $12,000 isn’t bad revenue with virtually no overhead, IMO. Since developing my domain names – specifically my geodomains has been a learning experience, I am very, very happy that they are making some money and that traffic continues to climb since I acquired and built the websites. With my other domain revenue streams in 2008, I’ve had the luxury of being able to take the time to learn rather than try to make money on these domains, and I am happy to say that I’ve succeeded in that.
    My revenue projections on these geodomains for 2009 are pretty strong, and the only major overhead I will have is commission for my sales manager, which is obviously paid upon sale of advertising space. Sure beats all of those newspaper companies who are top heavy and are barely surviving (ie the Tribune Company).
    Also, who dramatically overestimates their revenue and/or traffic? I don’t recall ever giving out precise traffic or revenue numbers, and I am probably one of the few geodomain owners with developed sites who hasn’t gone out to find advertisers yet. 99.9% of the other owners I know all actively seek out advertisers, and most are very successful at it. For most of those guys (Dan, Dave, Jess, Skip, Nat, Shaun…etc), this is their primary business. I have been a domain investor first, and am shifting to becoming a website operator – which was the main point of my post.

  7. perfectly said elliot…mike dosent get it, lol…your learning, generating things, traffic and best of all sitting on prime names!
    less then a year of owning these names are revenues suppose to be at 1 million a year with little overhead?
    Congrats elliot…happy you can just announce figures so easily and unlike your peers who need to boost i am making this, i have this, i have that….humble, learn and grow…the key to success imo and your on track!
    Thank you… and the goal of my blog is to teach what I’ve learned and help others realize their goals as well. The more we teach each other, the more we will all grow. I might not be doing something right, but I am happy to share that stuff too. I can learn from my mistakes and others can learn as well. I am not revealing trade secrets here, and I have no reason not to share and help.

  8. Hey elliot.
    Nice to hear your feedback. I didn’t think you’re over-estimating your traffic, just many people trying to position themselves as domain experts [when they’re not] or when they’re selling domains.
    Funny that you mentioned tribune though. I’m actually a sr. mgr for the LA Times. I’m sure if you did some research you’d see me on linked-in. Sam Zell (our owner) has stated that each of his 8 newspapers and 20+ TV stations are all individually profitable, but not to the margin levels needed to repay the banks on his current terms. I’m sure he wishes he had your margins (or anywhere CLOSE) so it’s an excellent point for your model. Maybe you should start hiring editors to develop compelling content as well (for…
    Overall, love reading your blog, Elliot.

  9. The key thing is this: take some of the ad money and use it to drive more traffic to your site. Type in traffic is great, but purchased traffic can help secure even more advertisers.
    I have domains that make $1K a month on type in. However that I started purchasing traffic and made 20X more than type in alone.
    I realize purchased traffic is a bad word with domainers. But trust me, it can be very lucrative.

  10. Hi Elliot;
    Happy Holidays to you and yours.
    First, who is to say what or who a domain expert is? I would certainly say that you know a lot. And your experience increases everyday. I want to say thanks to you for being candid and honest about your experiences. I am sure I am not alone in stating that I greatly appreciate your blog. So thanks and keep it up. I see you in the same group as Rick Schwartz and the Castello Brothers: successful, honest, taking some chances, funny, genuine and altruistic.
    OK…enough. I am really not trying to kiss anybodies…anything. I simply think it is cool that you are sharing your experiences.
    As far as the current state of things, geez, who frickin knows? 2009 is going to be an interesting year indeed. I have to say, that a good domain is a good domain in any kind of an economy. It certainly doesn’t cost much to surf and I can’t see anything but an increase in internet surfing, searching and direct navigating.
    The bottom line is still creating a unique, viewing, reading, experience for your site visitors, period.

  11. It’s similar to the housing market. Flippers aren’t flipping much any more. The high-end/high-dollar properties aren’t moving much just like +6 figure domains aren’t really moving at auction. The wholesale and retail mid-market keeps on chugging though. People still need and are buying homes and people still need and are buying domains. 🙂

  12. Nice Post Elliot and some real strong comments there from many readers.
    The truth is yes there are some buyers out there but most are in hiding!
    I know of a few people and large organisations within the industry that are buying domains at present but they are few and far between.
    I also have thousands of great names that Im struggling to sell as most people say they cant risk there cash as they dont know if there shall be improvement in 2009!
    2009 is going to be a very tough year for all industries and that includes the web – We arent going to see the bubble pop but sales shall get smaller as most end users are keeping there cash as instead of investing but if you can buy a cheap asset now is the time!
    Your geo names shall grow and I believe that $1K per month is good as they have only been operating for months these are names that shall generate 7-8K easy in around 18-24months (IMO)
    Well best of luck to you and thanks again for another great and interesting post!
    Happy Holidays & Good Luck for 2009!
    Warm Regards,

  13. Definetly agree with your post here. Just seems that the buyers are not nearly as active as two years back…. Too many question marks in people’s minds…. I used to be able to sell domains very easily but I have not made a decent sale for a domain or even a developed site in at least a year. I’m still buying domains but I have been trying to slow down until I can sell some off a few and compensate the expenses – but the buyers are far and few in between.

  14. Elliot…thanks for an inside look into some of your income. Making money is the bottom line of why most are in the business…your 1k a month is great IMO since your busy with alot of other projects at the same time…also it will be much easier to go from 1-2k than it was to go from 0-1.
    keep up the great work and Happy New Year!
    Thanks…. just as an FYI, my quote was “under $1,000/month in revenue.”

  15. Elliot,
    I really appreciate your transparency in discussing your development projects. You’re a true asset to the industry.

  16. Elliot,
    I’m just going to add all the cudo’s from the above posts. I really appreciate your posts and your willingness to open up about what you are developing.
    Your recent post about minisites prompted me to invest in Xsitepro and produce my first website verses just parking which is a losing cause for a low value domainer such as myself.
    I will say that my predictions for 2009 are more hopeful in nature. My thoughts are that your future is what you make it. There may be less sales in domains, (I just had my first in December) but I figure that there must be a way. As long as I am drawn to these domains, I can only improve… I love this developing thing. I guess I will just keep working at it. First time in my life that work doesn’t feel like work. I’m told that this is a good thing.

  17. Kudos to you my good friend. I agree with everyone else on the outstanding job you have done in sharing your truely honest insights and experiences with us all. Good Guys Do Win and we hope the economy gets better for us all. It can’t go, but up, so Happy New Years Everyone!

  18. unemployment is going to be higher and consumers will continue to be saddled w/ significant credit card debt (and unable to tap home equity) will make for a very difficult 2009 – liquidate your domain portfolios and buy gold.
    Historically gold has been a bad performer. Gold was worth more in the 1980s than it is today (if you take inflation into consideration). It had a price of $675/ounce in January of 1980 and today is around $850/ounce – down from highs of $1,000 +/-. I personally maintain a diverse portfolio of domains – developed and undeveloped, real estate, cash, some gold, and some stocks/funds.
    I would drop names that don’t generate revenue and wouldn’t make good development candidates. No sense in keeping domain names that won’t ever be worth more than the registration fee.
    BUT many companies are still paying good money for domain names. Speculation on high value names is down, but there is still a strong market for good domain names.
    I am not liquidating my assets nor anything even close to that. I am buying less but not selling more than I need to sell.

  19. ask bear stearns and lehman about history.
    I suppose if you make risky investments, you have a good chance of failing. They and others got very greedy and that’s what happens. The more you have, the more you want, and if you do things that are more risky in an effort to earn more money, you run the risk of getting burned.
    I wish all of those people who spent thousands of dollars buying .mobi and .whatever luck with their investments. Know what you are buying and ask plenty of questions.

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