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For many years domain investors have compared domain names to virtual real estate. Owning a premium .com domain is like having a store on Fifth Avenue, or so we've been told time and time again.
I believe that comparing domain names to virtual real estate is outdated and even somewhat damaging to the retail value of domain names these days. This analogy stems from a time before the likes of Google were technology giants, when search engines didn't have the depth and capabilities they do now. A time when people would type in a url directly instead of searching on Google.
I believe more companies are waking up to the realisation that if they don't establish a strong online presence, they're going to be left behind. But should we still continue using this analogy of virtual real estate?
Here are the reasons why I think we as investors should stop using this analogy:
Is it fair to compare domain names more to unique one of a kind paintings or antiques? After all every domain name is a unique one of a kind asset.
Or is it fair to compare ourselves as pawn brokers? This would certainly help end users understand the disparity between aftermarket/reseller/liquidation pricing and end user pricing.
When you consider antique dealers, pawn brokers etc. nobody ever questions how MUCH they paid for an item. They do with domain names because we ourselves keep comparing it to virtual real estate. You wouldn't try selling a house you paid $200,000 for 6 months later for 2 million would you?
I believe that comparing domain names to virtual real estate is outdated and even somewhat damaging to the retail value of domain names these days. This analogy stems from a time before the likes of Google were technology giants, when search engines didn't have the depth and capabilities they do now. A time when people would type in a url directly instead of searching on Google.
I believe more companies are waking up to the realisation that if they don't establish a strong online presence, they're going to be left behind. But should we still continue using this analogy of virtual real estate?
Here are the reasons why I think we as investors should stop using this analogy:
- Physical real estate does not typically have a 5x, 10x or more markup in such short spaces of time.
- It also doesn't have any notion of wholesale and end user pricing.
- Type in traffic is far lower than what it used to be, and quite frankly very easy to fake so how can any end user ever be expected to trust such statistics?
- Brandables are more popular now than ever, and it is very unlikely many people are typing in such domains
- It still gives off the vibe that we are merely domain investors. As an industry we should be striving to be more than just domain investors, we are branding professionals/experts/consultants that provide a real value to end users.
Is it fair to compare domain names more to unique one of a kind paintings or antiques? After all every domain name is a unique one of a kind asset.
Or is it fair to compare ourselves as pawn brokers? This would certainly help end users understand the disparity between aftermarket/reseller/liquidation pricing and end user pricing.
When you consider antique dealers, pawn brokers etc. nobody ever questions how MUCH they paid for an item. They do with domain names because we ourselves keep comparing it to virtual real estate. You wouldn't try selling a house you paid $200,000 for 6 months later for 2 million would you?
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