2014-02-26

Dot Com Domain Names, Better than Gold?

Istanbearish - NYTimes.com: "... we have a chronic problem of too much saving chasing too few good investment opportunities, which means that you only feel prosperous when money thinks it has found more good places to go than it really has — and soon enough figures that out, with nasty effects."--Paul Krugman, Nobel Prize winner for Economics, Mr. Krugman's current academic research is focused on economic and currency crises.

Some have tried stocks. Some have tried gold. Some have even tried bitcoins. At some point (and probably much sooner than most think), most prudent investors and investment managers will want their investment mix to contain portfolios of dot com domain names. Why? -- here's my reasoning --

The digital economy is the only growth economy worth investing in for many investors -- almost everything else is contracting, or at a minimum, margins are contracting; that is one reason why Google sold Motorola to Lenovo. Google would much rather be in the digital economy of online advertising and online services than smartphone hardware. (Take note Microsoft and Apple.) How does the average investor invest in the digital economy? Besides stock in technology companies, which can be up, then down like, e.g., RIM a/k/a BlackBerry, or are overvalued, domain names can be parked, developed, leased, re-developed, and sold. Dot com domain names dominate the internet domain name marketplaces, and bring in the greatest dollars year in and year out, don't take my word for it, check it out for yourself.

Why dot com domain names and not other extensions? Only the dot com domain names have the global branding and power in the global marketplace. Instantly recognized and trusted, dot com domain names, unlike many other domain name extensions, are administered by the registry Verisign, under the jurisdiction of the United States government and US legal system. Virtually every global corporation, company, and business, in the world, with trademark, branding and competitive concerns, has their brand(s) on a dot com domain name. In fact, the .com extension was the only domain name extension originally intended for commercial (i.e., business) enterprises (whereas .gov was for government, .edu for education, etc.).

And unlike new gTLDs which are limited in scope, e.g., ".bike," ".car," ".tattoo," etc., the dot com extension is unlimited in scope--any and all business sectors utilize dot com names. Not only that, but the same dot com domain name can be used for completely different business purposes over time, allowing pivots, and multiple uses and users -- think of the various ways the name mint.com might be used. This increases inherent value, and only dot com domain names have established dominance in the domain marketplace with this inherent advantage.

Because a dot com domain name has recognition everywhere in the world (unlike 2 character country codes, business specific new gTLDs, etc.),  the potential domain name buyer pool is much larger compared to the limited number of buyers and users for all other domain name extensions. Am I saying only in the dot com naming space can one make money with domain names? Of course not. But unless you are willing to devote a lot of time and resources to develop a domain investment portfolio in another extension, I believe the investment potential in dot com domain names exceeds all other domain name extensions. (The foregoing is my personal opinion and does not constitute investment advice nor recommendations for specific investment--see disclaimer below).




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