Tuesday, March 11, 2008

Are Domain Names Recession-Proof?

The Wall Street Journal ran an article today about whether there is such a thing as a "recession-proof" industry and noted in the second sentence that domain names are currently discussed as possibly being recession-proof. It's an interesting debate. I think it's very possible that domains are more recession-proof than other industries, simply because of the fact that global growth of internet use will continue at a very fast pace for the foreseeable future. And for short, generic domains (and numerics are the ultimate generics), they aren't making any more of them and increased demand will inevitably bring upward pressure to bear on prices. Anything could happen of course, but the most likely negative effects of a global recession on the domain name industry is to slow the rate of increase in prices. Or, it could spur people looking for "safe bets" to turn their capital to the domain market en masse.