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The Value of Domain Name Circulation

In the world of monetary systems, circulation is essential for growing healthy economies. Wealth that is earned can be put back into circulation via banking and investment industries. The dollar is always at work, helping someone somewhere earn, and one’s wealth is measured in ownership and control of enterprises that participate in the economy.

The opposite of circulation would be collecting your paper money under your mattress. Yes, you’re wealthy, but if the economy tanks while you’re holding that paper wealth, you just may lose the value to multi-digit inflation as has happened numerous times in countries with sick economies. I was in Brasil just after the government lopped a few zeros off the value of their paper currency in response to huge inflation. It was not pretty. That 1,000 bill in your hand was suddenly worth 10. Had it been in circulation, your holdings would have probably survived much better than that 1,000 bill.

Are domain names the same? Does circulation help maintain a healthy web, and thus help maintain a successful web economy?

As I advise businesses on web issues I often get involved in choosing and buying domain names. Lately, most domain names are already reserved. But an alarming number of those reserved domain names are unused. Can this be healthy for the web?

I think a domain name should be in use, or available to be used. As long as meaningful domains function on the web, people will use the web. Imagine a web where most domain names did not resolve. Time after time the consumer tries a domain name, and nothing seems to resolve. Search engines take over.  Now that search engines are monetizing search with advertisements, paid placements and promotions, meaningful domain names are more desirable. They allow us to reach the consumer in a sea of promotional ads and attention-stealing search engine trickery. They have more meaning.

But if a large number of domains are reserved and not used, what happens to the domain name system? It is not working for the consumers as it was designed. It becomes less important to the masses, despite the individually held domain names being important to their “owners” (the ones hiding them under their mattresses). Just as governments can lop zeros from the end of currencies they control, they can change the way the domain name system works. Will that be good?

I think we should try and keep domain names in circulation, working on the web. If you’re not using it, let someone else use it. If there is a monetary value, let the market trade on that value. Keep the domain names in circulation, to help keep the web healthy for everyone.


  1. Ben Wilks wrote:

    I agree it would be more healthy, but is the problem really worse now then before? Domain distrubution networks such as DDN will slowly make a big difference as the degree of seperation between buyer and seller is bridged. I cannot see domains being released, but a more accessable and open aftermarket with better tools for seo’s, domainers and website owners to build their businesses off. More synergy outside current distrubution networks. Similar to supermarkets and food ordering once your fridge starts emailing a local distributer for automated refills. Efficiency is key.

    Large domainers should band together and fix the space as a collaboration IMHO. Someone needs to put the ego aside and step-up. The sooner they improve the direct navigation space the better the value of domains, useage and public relations.

    If just the top 10 domainers got onboard it would have a huge impact. Or even offer a range of services (ppc, subdomains, via CMS) to get third-party content on their domains for a fee. Win, win.

    I have faith either way. I think hedging yourself between domains and seo is a good spot to be in so long as your diversified (also in the real world somehow) and plant yourself in the middle of the road.

    Bottomline John, I think things are improving, even though we have along ways to go. Time will tell, but the sooner aftermarket is gone the sooner these problems will solve.

    For some reason I think seo and domains are just getting started. The web tools of tomorrow will dwarf any shortcomings at present. We have come a long way, but it’s just beginning for collaboration and markets outside of search engines and mainstream media. But the major domainers must get this rolling and with the help of the seo community. In the future the lines between domainer and seo will blur quite a bit.

    Just looking at seo and domaining, they are so complimentary, yet so far from working together or totally understanding the implications of each others skill sets and assets. The ego and misinformation shrouds both in secrecy. As this divide is broken, expect some massive advancements in both search and direct navigation.

    What you reckon John, am I mad? can you see what I am getting at here?

    John Andrews replies:  I’m not sure yet, Ben, which is why I will be at the Domainer’s Conference in Seattle this month. I see the potential (SEO & Domainers). I see more of the differences between the SEO perspective and the domainer’s perspective every time I read domainer blogs and such. There aren’t many talkative domainers compared to SEOs… heh heh. That should change in the future, but I’m not sure it will come soon. Like SEO, there’s plenty to be lost with loose lips. I don’t know any BigDomainers yet personally, and I  would like to change that so I can learn more about the attitude behind the business position. You can’t argue with the idea that every SEO is at least a small time domainer, and that every domainer could monetize more via SEO. That’s enough common ground for the cross-over to grow much larger than it is now.

    Tuesday, July 31, 2007 at 10:25 pm | Permalink
  2. Jamie wrote:

    Can you clarify what you mean by a domain being “reserved and not used”? By this do you mean parked domains with ads served on them?

    John Andrews replies: Not really. Reserved but not used, as in does not resolve, or resolves to a virtually empty  page, and old, no longer meaningful page, or something like that. I know there’s a quality judgment involved with that, and I’m not trying to set a standard for it.  Butr it is pretty obvious when a domain name is not being “used”. For example, if there are ads on it, I consider it “being used”. If it has supportive back links, it is being used. Parked pages are obviously being used, whether or not you agree with the business model.

    Tuesday, July 31, 2007 at 10:35 pm | Permalink