Tuesday, June 9, 2009

Peak Domaining Theory? I disagree.

DomainReport.ca - I was reading some recent domain blog posts about the idea of 'peak domaining', the fact that type in's and typing in domain names to navigate will become obsolete.



In fact, reading these posts gives you the idea that domain names are becoming less relevant, and prices have reached a peak.

Thought I respect their opinions, I couldn't disagree more.

I used to wonder if there would ever by a system developed to do away with domain names for navigating on the internet. After coming back to this point many times over I just can't see it happening. It's possible that it could happen, I just don't see any way for it at this time.

Sure, the economy is down now. Online advertising spending went down in the last quarter. But the fact some people are predicting 'peak domaining' makes me think the opposite, that we are in for more growth in domain name values.

Here are some of my points against the idea of peak domaining.

I am seeing domain names in offline advertising now more than ever before, both country code domains and .com .net .org. Meaning, businesses aren't relying on only Twitter and search engines to be found.

There are other ways to navigate the internet for sure - links, portals, icons, favorite lists, search engines - ways that negate having to type in a domain name. But I'm sure most of us still type in at least one domain name every time we're on the net. What about new sites and urls you see on tv or offline - you have to type those in at least one time to see what's there.

New people are coming online all the time (think young kids growing up, or older people finally hitting the web, people in developing countries), and people get interested in new subjects all the time. What do they do? They'll do at least some type-ins to find subjects that interest them - hmmmmm, I wonder what's at wine.com, or travel.co.uk, or hockeycards.com. There are billions of people with billions of interests, and all kinds of subjects can get typed into the browser out of curiousity.

Search engines and portals can't be perfect in returning results. If you are a business owner depending on organic traffic from search results, you better be found on the first page and high up. To supplement this, you could also get a quality domain that people will remember when they see it in the newspaper, or that will get some type in traffic.

Most people aren't internet search/browser/domain experts. Many will type in the domain even if there is a link on the page in their favorites. Why, I don't know.

As for voice recognition, do we really want to surf the web by talking to our computer or phone? To me, it's usually more of a quiet experience, like reading a newspaper. I don't want to talk to my tv, book or dishwasher either.

Recent reports from sites like dnjournal and afternic have noted that small to medium size businesses are increasing or at least maintaining their domain name buying levels during this economic downturn. Many small and medium businesses still don't have a website.

There are lots of examples showing that premium domains can fail as a business. A domain name needs a good business model behind it to succeed, no matter how good the domain. But still this year we saw the sales of domains like Auction.com and Toys.com to companies that were happy to own these premium domains that relate to their markets. Why do they spend millions on these domains if domains are supposedly becoming less relevant, and we are passed 'peak domaining'?

I see that the domain name will always be needed - a person or business that gets a website will have to have a way to tell someone where they are. Just like phone numbers, which have been in use for decades and are still relevant today. But domains also have the quality of real estate, in that if the property is higher quality (better keywords), it will increase your chances of success.

And the domain name that is needed will need to be relevant to the business name, product, or the owner's name. And there is a finite supply of these domains in every industry in a relevant or desirable extension.

The 'peak domaining' theory is based off the 'peak oil' idea, which says that there is a finite amount of easy oil to be drilled, and we may be passed that point. The other side of this idea is that oil will become more expensive to find and drill as the remaining deposits are more remote, which will increase the price of oil as it becomes more scarce. For domains, once the good ones are in use and locked up by individuals and companies, quality domains will be harder to acquire which should in fact push up prices.

So maybe there is a side to 'peak domaining' I can agree with after all.

I'd like to see everyone else's ideas about this theory, whether pro or con, so please comment.


  1. Excellent post.

    I look at great generic and geo dotCom names as prime real estate on Madison Avenue. They will always be the gold standard for domain names. Why? Because they were the first and will always be the easiest for the public to remember. And the public's ability to remember, not search (big difference), a name is the essence of successful branding.

    I find it amusing when some people try to refer to dotCom as "just another TLD." Think so? Wait until these new TLDs come out. You'll see Darwin's Theory in full force.

  2. Good points.

    My own post was not to imply domains won't be needed or prime domains won't be valuable. In fact they will be MORE valuable.

    But what I am saying is that the sport of domaining, the dream of domaining is over for those who can't move to the next milepost of building them into profitable brands or businesses.

    And that takes a lot more then a mini-site still co-dependent on someone else's advertiser relationships, especially Yahoo which lives day by day and even less likely to survive with the challenge of Bing.

    So the options are very limited for what you can do with 90% of the speculative registrations out there. Eventually renewal fees are due and you have to make a living.

    And especially for those waiting for David's keywords with .TV after to come into value because all the dotCOM potential is exploited, expecting to just follow in David's footsteps of success- it's NOT going to happen.

    You have the same challenges that major businesses face and they have years head start on you- establishing trust, recruiting advertisers, differentiating for advantage, keeping abreast of technology and GUI simplification, meeting different needs and habits of younger generations and a more culturally diverse population-- all in trying economic times.

    In short, you need to be working your ass off building on the foundation and fruits of ten years of labor and experience, rather then waiting and hoping for someone else's foundation to crack and for you just to reap instant rewards.

    The reason big companies will be attracted to the best and only the best domains is because they have the resources and customer bases to take them to the next level. As I said in my post, iReit, Live Current, Fabulous and Marchex all learned this. Because they acquired domains based on a PPC model and without that, many of them don't adapt to becoming viable business plans.

    It's all about how your portfolio stands against the test of tomorrow and not the models of yesterday.


Thank you!