Domain Industry History
Since its informal start in the late 1990’s, the domain industry has gone through 3 or 4 lifecycle changes.
Early industry pioneers were focused on investing in domain names under the belief that those domain names would eventually become valuable assets offering attractive ROIs when resold. Many of them became very successful. They were known as “Domainers”, whom we now like to call “domain investors”.
Then something else began to happen. As the internet grew, these investors realized that many of the domains they were holding were receiving more and more “direct navigation” traffic. Direct navigation is when users type the domain name directly into their browser address bar assuming that a website exists that offers the content they want. For example, travelers looking for low cost airfare might type-in lowfares.com. Or a homeowner looking for elaborate new light fixtures might try directly navigating to fancylighting.com. Either way, by typing a website or keyword phrase directly into their browser address bar, the user hopes to save time getting to the content they desire by bypassing the search engines.
It is helpful to note that lowfares.com is an example of a domain on which the owner, Oversee.net, developed and maintains a content-rich, branded website whereas fancylighting.com is an example of a content-lean, unbranded “parked” page. Domain investors who have no time or interest in developing full websites on their domain properties have come to rely heavily on “parking” services to monetize their direct navigation traffic. We’ll talk about this next.
In 2001 and 2002, the growth in direct navigation traffic spawned the second stage of the domain industry lifecycle, which involved the creation of domain parking services. Domain parking services began offering domain investors highly scalable technology solutions that render optimized landing pages on undeveloped domains. Those pages contain relevant keywords and PPC ads designed to take the user to exactly what they were looking for when typing the given domain name into their browser address bar.
DomainSponsor, which produces the Webfest Global (formerly DOMAINfest) series of conferences, was the first company to offer parking services and has grown quickly over the years. It now renders over 600 million landing pages per month to direct navigation users from around the world.
It is important to note that domain parking provided early domain investors with monthly cash flow while they waited for the right time to sell their domains. Many of these domain investors used this cash flow to fuel more aggressive domain buying strategies, thus leading to a new, third stage in the industry lifecycle in which investors dramatically increased the size of their domain portfolios.
When portfolios increased in size, other service providers entered the industry, such as registrars offering bulk account management tools and new domain parking companies. Registries also took interest in the industry during this cycle since domain investors represented a prime target market for what they were selling; domain names.
The most recent evolutionary phase of the industry is now being spurred by the desire of many domain investors to diversify away from PPC parking revenue. Part of that diversification involves developing full websites on choice domains, and/or finding ways to monetize their traffic via CPA and CPL models.
Of course, one constant throughout all the stages of the domain industry has been the presence of a domain name aftermarket. Domain brokers and auction services have facilitated high profile transactions every year, with some sales reaching as much as 8 figures for a single domain. At the low end of the scale, aftermarket services specializing in recently expired domain names sell thousands of domains a day to domain investors, individuals and business owners. Many aftermarket services allow individuals to post domains for sale in the 3, 4 and 5 figure ranges.
In summary, domain investors are at the heart of the domain industry. By some estimates, domain investors own well over 30 million domains across all types of TLDs (.com, .net, .de, .mobi, etc). It’s not surprising that a variety of companies have sprouted and flourished providing services to these domain investors.
The evolution continues, as domain investors look to diversify their revenue streams by tapping into the technology and online marketing best practices used by a wide range of online publishers.
Webfest Global is dedicated to helping these domain investors make a successful transition by providing unbeatable networking and learning opportunities.
Domain Industry Resources
DN Forum, DomainState, NamePros, AcornDomains, ConsultDomains.de - Meet and learn from domainers all around the world in one of these domain industry forums.
DN Journal, DomainNameWire, DomainNameNews - Just a few domain industry news sites covering all facets of the domain industry. You can do a little digging and find lots of blogs, too.
DomainSponsor - A pioneer in domain name monetization, and the founding sponsor of DOMAINfest.
ICANN - The world governing body for domain names.
ICANN Wiki - A grassroots industry resource fostering global collaboration and transparency with the ICANN community.
Verisign Domain Industry Brief - Provides meaningful, fact-based analyses on topics of interest to the Internet community.