My Thoughts on How the Coronavirus Will Impact Domain Investors

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I think the biggest issue facing domain investors right now and at least in the next few months is the coronavirus outbreak. I am hopeful that you and your significant others will not be impacted by the virus, but I think the virus is going to impact the entire business of domain investing and domain name sales.

In the very near term, I believe people and companies aren’t really focused on buying domain names. In the next few months, I believe businesses will decrease their capital spending, which probably means fewer domain name acquisitions. As the general economic conditions deteriorate due to coronavirus-related contraction, entrepreneurs and others will be focused on decreasing their spend and consolidating when possible.

Put simply, I think domain name acquisitions will likely be put on the back burner unless the acquisition is essential or makes great sense financially.

The year started off a bit better than I expected, despite having two relatively large sales fall through a bit unexpectedly. In the last couple of weeks, inquiries and offers have tapered down. I remind you that my portfolio is relatively small at 1,000 domain names, so what I am seeing does not necessarily equate to what others are seeing. My hunch is that others are seeing the same thing, but readers can comment on that.

My spend is about the same year this year (to date) as it was last year. That said, my spend in 2019 was much lower than it was in 2018 because I have been relatively bearish on the market. I am buying strategically and will continue to do that.

Ultimately, I think the coronavirus outbreak is going to impact the domain investment business in a big way. Once there is more testing performed on people who think they have been exposed to the virus, I think the numbers are really going to scare people even more and that will hurt the economy. While I believe domain names should be a necessary purchase for businesses, I don’t think all businesses feel that way.

Hopefully, investors are prepared for an industry downturn. I would imagine the lessons of the 2009-2010 downturn stuck with investors. Since that period, the market has changed – people are relying less on PPC revenue, so that should be helpful. I think domain names are in stronger hands now than they were then.

This is a rapidly changing environment, so things may change quickly. There will be good domain name buying opportunities, and the bold will be rewarded. How long that takes and how that unfolds is anybody’s guess.

What are your thoughts on the domain investment space in today’s coronavirus outbreak environment?

48 COMMENTS

  1. I have not seen any sort of a slowdown in the number of inquiries, offers or interest in the names we represent. The number of people at companies answering their phones, or out of office messages turned on are nothing out of the ordinary. Furthermore, I went to Cayman last week, and the airports I went to were quite full of people. I think a lot of this hysteria has been turned up by the media. If it was not for the news I would have no idea it was happening. We plan on working as hard as we always do. Business as usual over here.

    • When you have 15 people, and the 15 within a couple of days is going to be down to close to zero, that’s a pretty good job we’ve done. It’s going to disappear. One day, it’s like a miracle, it will disappear. This is their new hoax. We had a great meeting today with a lot of the great companies and they’re going to have vaccines, I think relatively soon.

      I think people should take hydroxychloroquine. If it were me, in fact, I might do it anyway. I may take it … I have to ask my doctors about that. But I may take it.

      So supposing we hit the body with a tremendous — whether it’s ultraviolet or just a very powerful light — supposing you brought the light inside the body, which you can do either through the skin or some other way.

      I see the disinfectant that knocks it out in a minute, one minute. And is there a way we can do something like that by injection inside or almost a cleaning? As you see, it gets in the lungs, it does a tremendous number on the lungs, so it would be interesting to check that.

  2. I think this is when a company needs to put its foot to the floor. A LOT of things are moving online right now, so it’s a shining time for companies to seize the opportunity. Yes, people use online schooling already but a lot of people are going to experience it for the first time and may just really like it. Conferences are being moved online instead of in-person. Tech, the tools and services offered have a lot of opportunities now and in the near future. Telemedicine can shine. Online shopping can explode. New brands, products and services are often created in situations like this and I really see this situation as a good thing for domain name owners and the people that want to help in innovative ways, solve problems and be helpful. A lot of this is going to take place, online, which requires a domain name.

  3. “In every adversity there is a seed of equal or greater equivalent” W.Clement stone. likely will be opportunities albeit fewer and certainly different even perhaps unforeseen or unexpected. Vision creativity and doing much research before investing money is best advice. A good example of such opportunities is Sports betting and to see how brand domains may fit into this growing market of sports betting. Certainly seems that with more announcement of fans being prohibited from attending events that many will turn to online betting fantasy sports activities to feed their hunger for gambling. Some domainsers that hold sports betting names like the recent bettingtips.com and Golfbet.com are two examples that not all sectors are down when it comes to buying domain names.

    • amen and i concur…gambling, food, liquor, health and sex are supposed to be recession proof…streaming will continue to rock, and telemedicine should finally reach critical mass

  4. I haven’t seen any slowdown. Sold $10K in names in February. This morning, sold a .ai name for $32,500 on a payment plan after receiving the first payment (we’ll see how the rest go).

    Perhaps the slow down in business activity has given business folks more time to surf the internet and see domain names they’d like to acquire for their companies.

    Also, domain names are rarely budgeted-for capital expenditures — in my experience most domain names sold to corporations get paid out of the CIO or CMO’s operating expense budget on a whim.

    • congrats on the .ai…i’ve sold a bunch…still getting offers, but not selling any for less than 10 k usd…i see where think.ai is in auction with 3 days to go…has it reached 12 k yet?

    • Sold $15K in names this week, all 3 on afternic, no slowdown in effect.

      Good established buyers also, one being a health co. with 20K employees.

    • I have a little over 1,000 names also, and I have definitely seen few offers in the last several weeks. Had a $4500 sale about 3 weeks ago, a 10k offer on a domain I was asking 75k for, the offeror cited coronavirus for the reason he wouldn’t go higher. I had a price inquiry from a broker on another name, but that’s been it since that sale other than people not knowing it’s a domain sale lander.

      • Corona could be a good end user reasoning to get price down, I see a lot more utility, app, software development if we can’t be out in public, hopefully that trickles down to some good domains being acquired. People are still stepping over each other in the aftermarkets, borrowing is still cheap, house prices are still strong.

        Sure stock market is selling off, but it couldn’t go up forever, this is a good reason for a healthy walk back, some P/E ratios were getting above rational norms. Tesla doubling it’s market cap in the course of a month, it can’t be sustained.

        2008 was a different time, you had actual banks going under, we are not there today Mr.Snoopy, you should stop overpaying for your auctions then.

  5. More people will be working at home…Amazon, Google, Facebook,Microsoft are all good bargains now.

    A pessimist sees the difficulty in every opportunity; an optimist
    sees the opportunity in every difficulty.”

  6. another opportunity sector IMO is credit lending funding etc as more businesses and individuals hit financial walls as a fallout from the corona virus scar. And lets not forget political domains So I think your article is correct BTW there is cause for pause. At the same time wise actions could yield good return IMO. Where there is activity there is opportunity!

  7. If there is a global recession because of Coronavirus, domains, stocks, bonds etc will all take a hit.
    Only difference from the 2008 recession to now for domains, is that more people and businesses are online now and more still coming online. So, domains probably won’t be hurt as bad as they were in 2009-2010 IMO.

  8. Recession is now getting more likely. Domain prices will slump just like in prior recessions if that happens, don’t kid yourself.

    Expect startup funding to see large falls. Most exposed categories are LLL.com, .io/.co and one word .com in my view.

  9. In the last 2 weeks I had some new inquiries from buyers that already inquired in the past and probably because of the slump in the stock market thought I had reduced my asking prices. I quoted them slightly higher prices and I guess all of a sudden they realised that domain prices do not correlate with the stock market 🙂
    Eventually I closed 2 pretty nice deals this week at a premium compared to what I quoted them 6-12 month ago. I guess like in every “crisis” there will be winners and losers, the “stay home” economy will certainly be a winner, more people online, more amazon shipping, more netflix apple disney streams, more overall online traffic will probably even result in higher parking revenues.
    don’t buy domains with borrowed money, don’t overpay, don’t spend too much on auctions and keep some powder dry so you don’t have to liquidate names. this will pass as everything else did before.

  10. FWIW, through the first week of March, I am tracking just shy of double where I was last year, so the year is off to a fine start even with two deals that fell through.

  11. While you can argue that more activity than ever is going online (hence domain names will remain in demand), I am old enough to recall what happened to investment in IP immediately following 9/11.

    I was working in an IP law boutique at the time, and in the 12-months that followed 9/11, a huge percentage of clients were reducing filings (patent, TM, and copyright), ceasing responding to PTO Office Actions, quickly settling disputes, and cancelling non-essential TMs coming up for renewal. It was very noticeable.

  12. I had one of my biggest sales in 5 years, a sports betting domain, last week. I just hired an assistant as none of my bet/casino/odds/gaming domains are listed for sale, and i don’t have time to field inquiries…

    Where the domain market will be hit: startups with less than 10 million in funding, as they will need to extend runway/cashflow

    many sectors: travel, hospitality, energy , etc will/are taking hits, so domains will be low priority

    if the market takes a dive towards 20,000 , maybe investors like brent oxley will make more domain acquisitions..but i have zero idea

    i’ve made some domain acquisitions this yr..mostly betting…hope my bet pays off…so far, so good, but who knows?

      • nope…not bettingtips.com…unlike the Swedish buyer of that domain, the outside counsel and brokers required an NDA… most of my 6 figure sales have required NDAs…i don’t mind signing them if that’s what they request, and attorneys usually do, as it gives them something else to pad the clients’ bills

        i’m surprised william hill didn’t require the gent in the uk to sign an nda per his sale of bettingodds.com to them for over 450 K, or maybe they wanted to use the sale per PR with their foray into the US markets..same week they acquired horseracing.net for 60 k usd, if i recall

    • Hey Steve, if you get this, I’d like to ask you for pricing advice on betworld dot co. You know this market, so your guidance would be appreciated.

      • markus, betworld is super, and def has value in most extensions…
        it’s a high 5 figure valuation or more in .com
        it’s more art than science when trying to provide valuations outside .com, unless a party is buying up all the avail betworld domains in multiple extensions…these are the extensions in bet domains that have been acquired from me in 2020…brokers onn behalf of their clients approached me initially with offers:
        3 .com
        1 .app
        1 .global
        1 .io
        1 .casino
        1 .uk
        1 .de
        1 .org

        i think .co is a super alternative if the parties can’t get the .com and/or they wish to own the brand and decide to buy betworld in myriad extensions…the owner of sportsbet.com, which hasn’t fully launched, owns sportsbet in at least 15 extensions

        good luck

  13. I’m having my best year yet with 11 sales so far on the Uniregistry Market for a total of $31,340. I can’t detect any sign of a decline in sales. A healthy number of leads in my Uni dashboard.

    The last domain I sold was for $6400 and begins with the letters “bio”.

    Maybe domains related to health, hygiene, survivalism, home delivery and the like will see a small uptick in sales. Conversely, travel related names etc might decline a little for a while.

    Ironically, a domain I sold in January was a hyphenated domain containing the word “travel”, but was for only $500.

    It seems likely that domains related to bricks and mortar business might move more slowly, while names related to online activities might be unaffected or rise.

    But everything might change for the worse if things deteriorate and covid becomes a pandemic. Nobody knows.

    SARS in 2002-03 seemed to have an economic impact that lasted about 6 months, but Covid-19 might end up worse:

    “Stocks of U.S. airlines—a proxy for travel-related shares—dropped more than 30% from pre-SARS highs during that outbreak [Nov 2002-Jul 2003], about twice the decline of the broader S&P 500 index. All stocks, it appears, were impacted by the outbreak. It took about three months for shares to bottom and another three month to achieve previous highs.”

    BARRONS

    https://www.barrons.com/articles/travel-stocks-coronavirus-china-airlines-health-care-51579714639

    • Sars was different, I honestly wasn’t worried about it, or see this much change of travel, and daily schedules
      as we are seeing here today.

      People still need to eat, breath, and be productive.

      Bitcoin is not proving to be what we thought during a pandemic. Domains have matured since 2008, maybe we have turncommerce to thank for that for sucking everything up so no end user can get a freebie hand reg.

      • Bitcoin is about the highest risk asset on earth, it will continue to collapse if things get worse. Crypto people are fooling themselves. They think Bitcoin should go up whether markets are strong or weak. Foolish people, and that idea will make for an even larger crypto crash as the true reality of those assets sets in.

  14. This has been a banner sales year for me so far. This month may be record month for me and sales.

    But, I have a sale pending (thru Uni broker) with Chinese buyer and he has disappeared for the last month. I dont know if the virus got him ?

    Good luck to all.

  15. Surely domains biz is going into downturn, but a big unexpected marketplace might emerge with coronavirus keyword as prefix and all sort of suffixes being registered..

    Wouldn’t be surprised if few of the creamy names having suffixes like masks, gloves, tests, cure, symptoms get sold in 5 digits

    • I do not agree. In fact, during other outbreaks and illness scares, hardly any names publicly sold – let alone for anything substantial: https://domaininvesting.com/analysis-what-are-illness-outbreak-domain-names-worth/K

      In the last 3 months, only 3 “virus” keyword domain name sales were publicly reported, according to NameBio: https://namebio.com/?s==ETO5EDM2YjM TheVirus.com and LoveVirus.com are 2 of the 3 and I don’t know if those sales have anything to do with this current outbreak. In addition, there have been ZERO publicly reported sales of domain names with “corona” or “covid.” Now, of course, sales could be happening via platforms that do not report sales. However, a quick search of GoDaddy’s appraisal tool for comparable sales using the terms Covid.com and coronavirus.com do not show any sales either.

      Put simply, there are domain name companies that will make money from this outbreak and panic, and those are almost exclusively registries. Registrars also make money, but margins on domain registrations are typically thin.

      When it comes to health supplies and other medical related products, I would only buy from well-known brands. Something like WhateverVirusCures.com or WhateverVirusSupplies.com sounds scammy to me. I would stick to well known brands rather than shopping on a website that has a clearly new domain name registration. I am sure others do things differently, but that’s how things go in life, too. Some people are quarantining themselves, some people have food/supplies on hand in case of a quarantine, and others go about doing things as if there is nothing happening. I am sure there are people doing their own things to prepare. Such is life.

  16. One Chinese buyer defaulted but others came through (auction sales).

    End user top sales (six and seven figures) often take months and years to close. The effects of Coronavirus will be felt months from now.

  17. Sorry, but you can’t put lipstick on this pig.

    I would say that many companies will FREEZE all non-essential spending in the days/weeks ahead.

    So while you may not see the impact RIGHT NOW cuz we are still in the early days, you soon will.
    This will not help domains. It may not hurt as bad as other sectors, but don’t think we won’t take a big hit.

    Domains won’t be high on their priority lists! Sorry to burst the bubble. But reality will hit pretty soon.

    • agree…but black swan events attract some of the most daring investors and entrepreneurs…you can be sure bezos, musk, and thiel, etc will find areas to put their fortunes in areas with demand, and not reliant on global supply chains
      per domains, i have no idea, but with vcs reducing investment funding for at least the next quarters, you can’t expect startups to upgrade from .io to .com, or get___.com, or my___.com to ___.com

    • Agree, spending/finance areas (including domains) is going to freeze up if things get worse, much like 2001 and 2009.

  18. 2000 plus point dow drop, yet auction for .ai domains today had record sales, with over 90 percent of the bids occuring today. think.ai went for over 27 K USD..I picked up a few bargain-priced .ai names in the healthcare sector…minimal risk…prob won’t buy any more .ai domains…i like the ones i have…just surprised so many of these domains had bidding wars while the market tanked…of course i realize 27 K is small-time compared to .com sales/buys

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