Mike Mann shared a well thought out Facebook post this morning that would seem to make a good case for .com domain name investing. The post reads like a pitch to a finance firm, and I thought it was worth a share.
From Mike’s Facebook page and Twitter account:
“The bid:ask spread is huuuge in the super premium .Com domain trading space, which helps make the investment very risky, expensive and time consuming; however it also leaves enormous margins to arbitrage for potentially enormous future profits. It’s too hard for others to compete, and there is still considerable room for innovation in tech and marketing and helping the public discover the true long term value of this special asset class. Super premium .Com domains are incredibly profitable long term investments if handled properly; they have little relationship to the hundreds of millions of crappy domains for sale in the world, at totally random not professionally appraised prices, in poorly organized marketplaces.”
People regularly ask me about investing in domain names, and my answer is not usually as well refined as what Mike wrote. My only criticism is that Mike’s comments focus quite a bit on the value proposition of investing in .com domain names vs. other domain name extensions. I would imagine the focus could be shifted more towards the value proposition of domain names in general rather than extensions, since someone probably doesn’t need to spend much time convincing people what seems pretty clear already. I don’t know who Mike is addressing with this post, so there is likely a reason for this focus beyond the surface of it.
The next time a hedge fund analyst or someone in the finance space asks me about domain investing, I am going to share Mike’s Facebook post with them. It will save me some time, and it was written in a manner that they will understand.