Its January 1 & We Are $750,000 In The Hole

We wish you a Happy New Year and now that the clock has hit 1.1.11 its another year and we start it out $750,000 in the hole.

We own around 75,000 domains and with a carrying cost of lets just call it an average of $10 a year meaning that we will owe $750,000  in registration fees in 2011.

Its a huge nut although some domain portfolio holders have hundreds of thousands or even million or domains, so they woke up this morning to a bill in the millions of dollars.

Its no wonder that some domainers are supporting the CFIT litigation against Verisign whose contract allowed four  7% rate increases in a time where there was 0% inflation.

Its good to be a monopoly.

But that’s another post for another day.

So we welcome the new year, but are reminded come Monday we have to go to work and make over $2k a day just to pay Verisign its fees.

Happy New Year.

Comments

  1. says

    Simple solution folks, just add the string “thebigliesociety” to your junkmail filter and at least the emails will stop, making it spam free to subscribe to blog posts here and elsewhere again.

  2. says

    Domains and computers work in unison. Domains registration was must higher until more registrars were accredited, and people took notice that domains had investment potential. Computers used to cost several times more.

    Introducing more variation and reducing prices stimulated the growth of domains and computers. It wouldn’t make sense to raise prices high again. The housing market didn’t last under those conditions.

    7% and 10% increases increased overhead costs for elite domain investors. If prices do skyrocket, they’re smart enough to determine which domains to retain, and which to move.

    I operate on a much smaller scale. Even domains that don’t perform still remain in my portfolio. Whereas, I will look to sell names I know will attract buyers.

    When the interest rate increases a half percent, businesses will reduce their investment. However, they will increase their investment at the moment in which the rate decreases.

    Price is not always the factor. When there is quality domains available, people will spend the money to acquire them. There only one name in each extension.

    Reducing supply will increase demand. Increasing prices will increase supply and decrease demand. Domain registrars that rely on new registrations and renewals will suffer the most.

    Domain investing is a business just like any other. Increasing the price to $70 is not going to happen. Many companies use the Internet as a secondary revenue generator. Such companies that sell houseware products only make 11% of their revenue online.

    The Internet is an advertising gold mine. However, advertising dollars are still spent on print and commercial advertisement. The domain industry is a pebble compared to the stock industry or the housing market.

    Essentially, domains serve as advertising tools which inform customers, generate sales and to function as online businnesses. Raising prices tenfold will cause registrars to fail and change the advertising landscape. CPC cost will increase, and competition will increase.

    In my opinion, raising registration prices will severely impact the domain industry. Cell phones, computers, the Internet, and cell phones have a similar history.

    As more companies were introduced in various industries (i.e. Porter’s Five Forces), prices were then reduced to meet consumer demand. If registration fees increased to $70, I could only retain 30 domains. I would drop the rest. You have to evaluate performance and future potential. Anyhow, enjoy the affordable cost. Don’t look too far in the future.

  3. says

    A few random modification in last post. My Iphone actually performed better than usual. Drop the ‘s’ in domains in paragraph 1.

    Change ‘there is’ to ‘there are’ in paragraph 6. Lastly, competition for CPC would actually decrease if registration prices increased. Thanks.

  4. says

    “Domain investing is a business just like any other. Increasing the price to $70 is not going to happen.”
    ===

    FREE domains will likely change the game, but there may be a ((“cost”)) to maintain FREE domains. Price is not cost.

    Domainers really need to head to the the ICANN meeting in San Francisco in March 2011.

    ICANN I* insiders are sort of like Church.Pot.Luck.Dinner attendees who have
    no clue where their meal is coming from. Heading to the ?free? buffet line 75
    times before others get a chance to eat may be viewed as “excessive”.
    Obviously, some domainers seem to think that demonstrates their ability to
    game the system. ICANN insiders label those domainers as “scumbags” and
    “trailer park trash”.

    The Eco.System will make adjustments now that it sees how humans behave.
    As noted, small changes, can have a big impact on “domain investing”.

  5. says

    Everyone seems to be dark on the domain outlook. The Internet is in its infancy stage. Domain names are always going to be in demand.

    As long as there are search engines, commercials, branding and business, domain names will retain their value.

  6. Doug says

    This is a huge problem for domainers

    Cost per click is going down

    Cost to renew is going up

    Both registers and ad parking should wake up!

    Huge daily expense mike Berkins

  7. says

    When one makes high profile sales, there is nothing to worry about incurring average daily fees. A handful of 6 figure sales will cover all fees.

    The batch of 1491 are super elite domains, with some domains worth the 7 figure range. Whereas, the recent 7% fee increases the amount to $55k in additional fees.

    A few $60k sales will cover reg for 2 months. Parking revenue is more than enough to cover fees because there are many high revenue sites in the bunch.

  8. John Berryhill says

    “Its no wonder that some domainers are supporting the CFIT litigation”

    And may I extend a hearty “you’re welcome” to those who aren’t.

    Just another thing that us “slightly retarded” attorneys with “no morals” does with spare time.

  9. says

    “Domain investing is a business just like any other. Increasing the price to $70 is not going to happen.”
    ===
    FREE domains (and Services) will likely change the game, but there may be a ((“cost”)) to maintain FREE domains (and Services). Price is not cost.

    ://domain.opendns.com/MostWantedDomains.com
    ://domain.opendns.com/TheDomains.com

    ://domain.opendns.com/MostWantedDomains.COm
    ://domain.opendns.com/TheDomains.COm

  10. says

    As we enter 2011…
    …anyone with 75,000+ domain names that is NOT running…

    their own .COM Clone Servers and…
    their own Reputation DNS Platform and…
    their own Public DNS Service (ala Google, Amazon, etc)…
    their own CDN Cache Network (ala Akami)…

    and their own Set.Top.Box Internet@TV CPE DNS…

    is not a player to be taken seriously…

  11. says

    BTW – Some claim 5,000 domains (.COM?) is the magic number where owning your own Registrar becomes essential.

    that is apparently now totally turn-key and a numbers game…like the rest of the “domain industry” and Eco.System

    18 cents is the annual cost of a .COM domain – various forces will likely reduce that to 15 cents which matches well with $100 debitcard account limits by governments

    people with 75,000+ domain names are obviously probably invited to the various meetings in Washington D.C. where the details are worked out

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