Why Domaining is Not a Mainstream Industry

By on March 24, 2008

I was reading the State of the Industry report at DNJournal the other day and it helped to underline something that has been on my mind for a while now – on a global scale, domaining as a mainstream industry has a long way to go.

There still exists a distinct lack of structure, security as well as multiple strong monetization methods that can entice a regular person to start investing in domain names. A lot of people analogize domaining as the “Real estate of the web” but in my opinion this lack of structure, security and mainstream appeal is what truly differentiates domaining from real estate investment.

People with money generally look at real estate as long term investment. Moms and dads, factory workers, nine-to-fivers all consider investment in real estate a steady, solid, long-term investment. They have solid security models in place that will almost guarantee they can get out of an investment a year down the road with minimal loss at least. They have a solid rental scale that can determine their investment value almost to a cent. In addition, they can sleep at night because no one will suddenly up and decide to issue a real estate UDRP equivalent against their investment causing them to lose their assets.

The domaining industry as a whole should be aiming to get these moms and dads, these factory workers, these nine-to-fivers to look at domaining as a regular way to invest for their future. Only once regular people are buying into domain names with long term plans of development or resell value we can say that we are getting closer to a mainstream industry. Only once mainstream investment is achieved across the board can we boast to be part of a mainstream industry.

Bob DeCecco, of Typed-In pointed out the obvious when he talked about the lack of a broader representation of monetization and investment methods; “I was surprised at the lack of venture capital and private equity representation, as well as cross selling of services beyond ‘parking companies’ (e.g., online advertising companies, IYPs, online directories, ad networks, etc.”.

What are the monetization options generally talked about when it comes to making money from your domain names besides development? PPC/parking seems to be the answer most of the time? The launch of Fusu.com is definitely a step in the right direction!

To add to the problems with domain name monetization we have a lack of security in the domaining industry as a whole. There is a long thread over at NamePros about why LLL.com domain names are less safe with their resell value having reached 10k+. This definitely has to be addressed by ICANN, registrars and people involved in the domaining industry overall. Even though the situation might not be as drastic as the thread poster may lead us to believe, it is still plausible and as such renders our industry ridiculously unsafe. Add to that the Snowe “Anti-Phishing” Bill that legislators are trying to pass and what are we left with? An industry where new investors can blow incredible amounts of money without knowing whether they have made a sound investment.

ICANN, registrars and domainers in general have to take a long hard look at ourselves. Where do we want our industry to be 10 years down the line. There are so many positives in domaining and it would be a darn shame to allow them to fade away due to a lack of structure, legislative protection of domainers and increased variety of monetization methods.

About the Author: John Motson runs a domaining blog over at dnxpert.com. He regularly provides his newsletter subscribers with free lists of hand picked expired domain names. John is an author of the guide to successful domaining Domaining Manifesto book.

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About Mark Fulton

Mark is the Founder of DotSauce Magazine and a full time web developer, domain investor, SEO and online marketing professional residing in North Carolina, USA. Visit MarkFulton.com for information on freelance website development, SEO and consultation services.