Peak Oil Theory Bell Curve and the Future of .Com Domain Prices

The Hubbert Peak Theory

(Of course this article was written before the onslaught of new domain extensions)

In 1956, Marion King Hubbert stated that for any individual oil field, or for any country, or for the world as a whole, the rate of petroleum production tends to follow a bell-shaped curve. This became known as the Hubbert Peak Theory.

There Are Some Similarities Between .Com Domains And The Oil Industry.

Obviously the peak is at the top of production. Essentially the Hubbert peak theory shows that once oil findings peak, so does the amount of oil that can be produced (duh). And, that once we are on the downside of the bell curve, which we are, we should be examining other alternatives, because there will be no more oil.

Now, What Does This Have To Do With .Com Domain Names?

Well, there is a finite amount of oil, and for the most part, there is a finite amount of .com domains (unless you count as an option).

Peak Oil Theory Bell Curve

Hubbert theorized that after all fossil fuel options (oil reserves, coal reserves, and natural gas reserves) are identified (there hasn’t been a major find in 30 years), production increases almost exponentially at first. Then as more value is recognized (i.e. demand) man creates more efficient ways to “drink the oil” and extract at a greater pace. At some point, the peak output of a field (or a country or the world) is reached (the top of the bell curve), and then production begins declining until it also has an exponential decline.

As the decline begins, even more efforts are attempted to get at the remaining oil reserves, i.e., Canadian sand tar and injection of various liquid or gases into previously dug holes to force any residual to more easily be captured and extracted. At some point efforts turn towards such proposals as drilling in Alaska, off the shores of California or areas like Sudan.

Lastly, alternatives to oil are being more closely examined, such as solar, wind, nuclear, etc.

Peak Domain Theory Bell Curve

Back to domains… The same thing happened here. At first there was the discovery of domains, followed by a slow build up of the “extraction” of domains. Not long after that there was more sophisticated mining of domains including scripts to take keywords, add a .com after the keyword and then check for availability. Before too long, in a very short period of time, we hit the peak in that every dictionary and “money” keyword (and keyword phrases) were totally depleted.

The peak of domains was hit, and now on the downside of the bell curve more innovative activities are incurring such as examining dropped domain lists and then subsequently using high tech programs to bang the domain databases on the day of the drop, or even going to individual domain owners, one by one, and asking if they would sell their domain. This last method is akin to the injection of air or liquid into a dry well, in order to see if anything is left.

Lastly, as the .com reserves of domains were being depleted, alternatives were being created, and we know them as .mobi, .info, .biz, etc. Most of these domain extensions were only slightly more effective than cold fusion research.

There Are More Similarities Between Oil And .Com Domains

Oil consumption peaks in the US was approximately in 1970 (remember the gas lines) and world oil depletion should be occurring right about now, although oil-producing companies continue to “enhance” their oil reserve projections, not surprisingly, upwards, which masks the true amount of oil available.

Also, in the 70’s, about half of all global consumption was used by the US. Domain consumption is predominantly a US activity, as indicated by ownership.

As the world realizes an oil shortage, especially with the continuing massive consumption of oil by the US, and the staggering increase of oil by China and India, the price of oil should not only increase, but increase rapidly. Plus there over 700 million motorized vehicles worldwide. We have already experienced the first of a price increase in gas and related oil products over the last year or so.

So What Does The Future Hold For .Com Domains?

I heard on the show, “A Crude Awakening: The Oil Crash,” about oil, that the stone age ended not because of the lack of stones, the age of using animals, such as horses, ended not because of the lack of hay, and they theorized that “necessity is the mother of invention,” and that advancements were made in the past, and we should be able to “figure out” some sort of solution to the dependence on oil. Maybe…

The .com domain age won’t really end, for the most part, because unlike oil, .com domains live on and are recycled, resold and redistributed from sellers to buyers.

The “Crude Awakening” documentary also emphasized how “cheap” oil still is. They used a simple example comparing oil to Starbucks. Gas is about $3 a gallon and Starbucks in $50 a gallon. Their conclusion? We have it cheap and prices will go up substantially.

In Conclusion…

Will oil products ultimately go the way of the 8-track, 5 GB hard drives and pay phones? Definitely.

Will domains fall to this extinction as well? Probably not, in that domains are limited in their numbers and they are not consumed. In short, unless some QUALITY alternative to .com domains is somehow created (which could happen, but hasn’t so far), .com domains should continue to increase in value as scarce and valuable resource.

Conclusion, while the consumption of all quality .com domain names has peaked, the value of the domains continues to rise. Hold onto your domain portfolio as long as you can.

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