In my opinion, today’s article at Forbes was another example of someone looking in, writing from afar, judging an industry on a single event or personal opinion. Deborah Jacobs spent hours “researching” an article for Forbes about domain names. She talks to a few people including Rich Schwartz and Mark Ostrofsky (who didn’t seem to enamored with the auction either) and comes up with an opinion. The opinion is that domain owners are squatters and that domain names have lost their glitter. She bases the entire story on the “data” that high end domains don’t sell for as much as they did a few years ago. And the example she uses? Dvds.com. It sold for $300,000 years ago but it’s at $50,000 now. So let me get this straight, a form of media that is slowly fading out is losing value as a domain as well? In the comments of the article I asked her if the paper industry was in dire straights because telegraph paper sales have taken a tumble over the last 75 years. In short, she couldn’t be more wrong.
Adam Strong posted what I already knew. He is having the best year he’s ever had. And he was in this industry back in the “good old days”. I know for fact that Andrew Rosener is having an incredible year. I personally did six figures last year and I do this as a hobby. Godaddy, Namejet, and Flippa are doing millions a week in sales. This industry is solid. Solid enough for thousands of businesses to make a living off of it. Yes this industry is evolving but what industry doesn’t. Buggy whip makers had to start making brake pads but they never left the transportation business.
As for the word squatter. I’m used to it. I don’t even bother to use the land example. Let them know I own a piece of land that is empty and there are houses all around. When I bought it there were no other houses. I imagine that someone else would like to build a house on my property for the amount I paid for it but I want triple now. I guess I’m squatting there too. I admit that when I tell people that I invest in domain names many of them think I’m in porn. I also admit that I while I highly respect Rick Schwartz and all that he’s accomplished, he may not be the best posterboy for the industry. He is what everyone thinks we are. A guy in dark sunglasses, looking tough. A previous salesman and someone that got rich in porn. We know him better. As a kindhearted, family loving, passionate about what he does kind of guy. But the package is a bit intimidating to the outside world. We all have different personalities and depending on which domainer you interview, you will get a completely different perspective on the industry. But put simply, we are still investors that buy an asset and then try and sell it for more than we paid. And we would be buying and selling used banana peels and old Miracle Whip containers if the market was strong enough. We’ve all come from an entrepreneurial background. We do it because we have a great present and a potentially great future. Most of us are not trying to dig ourselves out of a hole as the author implies. It’s actually the opposite, almost everyone I know have been reinvesting profits and haven’t had to bring in outside money for years.
In summary, once again we have another naive article written by someone that sees all the money but can’t figure out how to get a piece of it so she calls it Fool’s Gold. It’s like going down to the stock market and only talking to the half that made the bad trades. She had an opportunity to focus on the positive but chose to go the negative route because she doesn’t understand domains well enough to know why anyone would pay so much for a marker on the Internet. She says some purses cost more than many of the domains from the auction and somehow I think she would feel more comfortable with that purchase. And that says it all.
PS: She has since taken down the “Squatter” reference to Rick. Wise legal move. You can tell she is a lawyer