I’m not exactly sure how to react to this news. The $7.5 million paid for Diamond.com matches the highest price ever paid for a domain name. Back in the dot com boom days, November 30th, 1999 to be exact, eCompanies paid $7.5 million for domain name Business.com.
Now this brings up the most logical question; are we in another internet bubble? There are a lot signs that says we are but on the other side of the coin, a few signs of froth do not a bubble make.
I can say that this “2nd coming” of the internet is nothing like the first. The first was just crazy. People were investing into anything that had a dot com in their name. It wasn’t uncommon for a new dot to IPO without so much as a business plan, raise $20 million, and then spend the entire $20 million on advertising to build a brand. ROI for ad dollar spent wasn’t even considered back then. That’s why when the net crashed, sites that depend on advertising for revenues, took the biggest hit.
Today, the market is quite different. Companies don’t spend money like crazy anymore. Costs are looked at more closely. They have to see a return on ad dollars spent before spending more. CPM is no longer the dominating way of selling banners. Google’s CPC system now rules.
If we are in a bubble, it’s very different than the last one. I like to think we have learned from that bubble and won’t be making the same mistakes. However, I’m not taking any chances. This is one of the reason I’ve been diverting income from the net to real estate. The only problem is, my market might be in a real estate bubble.
It’s times that these that you just have to go with your gut.