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?