For the Chinese it was the year of the Rat, and the year they hosted one of the best Olympics ever.

In domaining, China has seen significant growth in its ccTLD, the dot CN. This emerging superpower is pulling out all the stops to be dominant in almost every sector.

As for the Western world, Gordon Brown, the British Prime Minister summed it up when he said the “world spun on its axis”. Of course he was referring the financial crisis.

We have seen the world’s most powerful economies plunging into recession, banking giants begging for mercy, record job losses, real estate prices plummeting, and the list just goes on.

Here in the domaining world, we at first started boasting how domain names were recession proof. However, as an accountant, it is only too clear to me that profitability and liquidity are two different things. A business could be very profitable, but could still go bankrupt if its cash flow is not properly managed.

With a severe shortage of cash in the economy, it was just inevitable for the domain industry to start feeling the pinch. Some great deals appeared out of nowhere. Domains that would sell for high $xx,xxx were sold for low or mid $x,xxx.

In reality, some domain names were overpriced to start with. And am not including the ridiculous priced rubbish domain names. This credit crunch, if it did any good, corrected a lot of things. Debt was simply out of control, housing prices were going through the roof, and well, some domain names changed hands for some ridiculous amounts.

Sometimes you really had to wonder if a transaction really took place, as the domain name and the sale price just did not add up.

Domain parking also saw some very dark days. Personally, I have made a decent fortune with domain parking, but am not a big fan. I just simply hate the lack of transparency. Despite the increases in online advertising, domain parking service providers are seemingly gradually reducing the percentage they pay to domainers.

This has caused a lot of domainers to breathe a sigh of relief when Google opened up its Adsense channel directly to domainers. Some questioned if this is Google trying to cut out domain parking service providers, while some said it is Google trying to “clean up” the domain PPC Channel.

This is indeed a bold and definitive move by Google. People will inevitably come up with all sorts of conspiracy theories in the absence of an official reason or intent from Google.

Some have used this new development to preach the gospel of fear as a doomsday for domaining on a whole.

In my opinion, from an accounting/business perspective, this move by Google is nothing more than a mere safeguard against the exposure to the risk of loss of income.

There are some domain parking companies that control a lot of domain names, and subsequently a lot of traffic. These parking companies churn out hundreds of millions of dollars each year in revenues.

Now although some have claimed that the domaining channel only represents a small percentage of Google’s PPC revenue, the loss of some of this revenue could have very adverse effects on Google’s financial statements.

If one parking company decides to switch its entire portfolio of domain names to another search provider, such as Yahoo, then this could mean a significant loss of revenue for Google, in the region of hundreds of millions. Google’s profits would take a hit, their balance sheet devalued, and even the price of their stock could fall.

By opening the Adsense channel to domainers, Google has some sort of fail-proof safeguard. Should any domain parking company switch alliance; Google would just simply have to sweeten the deal with domainers to entice them to have direct accounts with Google. This deal sweetener could be in the form of bigger payouts, better parking templates, improved customer services, and even some search engine incentives.

The ball is now in Google’s court.

The proposed deal between Yahoo and Google as we know did not go ahead. This means that these 2 powerhouses are still competitors. Yahoo, in my opinion, is like the Titanic. It saw the iceberg (competition from Google) too late, and due to its size and inflexibility, Yahoo could not reposition itself fast enough to be a more robust competitor. Google has taken full advantage of the situation, and has been relentless in its efforts to be the dominant player in the online advertisement markets.

Domain development was a very hot topic in 2008. With the demise of domain parking, domainers will be forced to be more creative and innovative.

2008 was a great year for domain auctions. We saw quite a few new domain auction providers popping up, and most of them seemed to have done very well. Domain auctions going forward will be a very popular method of marketing and selling domain names.

The domain aftermarket remained strong, despite deplorable economic conditions. Here are the top 10 reported domain sales for 2008 (Source: DNJournal.com):

1. Fund.com – $9,999,950
2. DataRecovery.com – $1,659,000
3. Kredit.de – $1,169,175
4. Cruises.co.uk – $1,099,798
5. Invest.com – $1,015,000
6. SkiResorts.com – $850,000
7. Printer.com – $800,000
8. iReport.com – $750,000
9. Casino.de – $625,000
10. Jobs.ca – $600,000

The top ten domain sales for 2008 grossed $18,567,923, which represents an average of $1,856,792 per domain name.

Domains will continue to sell and will be in even greater demand in 2009. People and businesses will inevitable have to realise that the future of any business will depend on a strong internet presence. This ebusiness success will start with a quality domain name.

eBusinessDomains.com was launched in 2008. We are aiming to take domaining to whole new levels in 2009 and beyond.