Idea: 52
Saturday, 21 February 2015
By. David Fauchier
Inspired by Brainstorm #8: “Illiquid Assets?”
AirDNS
— Airbnb, for domains!
Because expensive domains are illiquid assets, a managed domain leasing service…
I’ve always thought of domain names as real estate for the web, and often regretted not following up on buying some up 10/15 years ago. I was just a little kid, my pocket £2/3 weekly money didn’t stretch far enough to do it myself, and I remember pitching my dad (maybe my first pitch!?) who just didn’t get it.
Recently though, I’ve realised there is a big differences to the economics of the two:
Since you pay annuities for the domain every year, success hinges on fast turnover. Hence domains are ‘priced to sell’. However this incentive decreases as the value of the domain increases: $20 registration fee annually is significant for a $200 domain, not for a $2m one. Uniquely, the registration fee is the same regardless of a domain’s market value.
The market incentives dictate that illiquidity will increase with value. It’s in an owner’s best interest to hold onto a valuable (but non-productive) domain for years until the right bidder comes along and pays top-dollar for it. The reverse is true of cheaper domains.
What if as an owner you could lease your domain — making it a yielding asset, while retaining ownership? And as a business, what if you could lease the domain for a year or five?
Turns out that some sub-par competition is already doing just that:
— GoForThe.Com
— NoktaDomains.com
But these are long-term leases. A unique angle would be to facilitate short term leases or rentals. Use cases:
— Startups who don’t know if they’ll be in business in 6 months time (it makes no sense to drop $2k on a nice domain, but you sorely want to — it confers a lot of credibility).
— Temporary promotional domains, imagine renting blackfriday.com for 24 hours on that Friday…
— Can you think of any other use cases?
Another differentiator, off the top of my head:
— Visibility into how the domains have performed in the past (inbound traffic stats)
— More generally, building up a database of the best performing domains
— Can you think of any other differentiators?

