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2007, just as it was in 2006. Their forecasts again proved to be on the money.
The most recent example of that was this month's announcement
that Oversee.net
had acquired Moniker.com. With
the ink on that deal barely dry, we felt Moniker CEO
Monte Cahn (who signed a long term deal to stay on under
Oversee) would be the perfect lead-off man for this year's round
up. In addition to being one of the most popular registrars
among domain pros, Moniker permanently changed the industry for
the better by pioneering the live auction model that has
produced so many high dollar domain sales.
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Moniker
CEO Monte Cahn |
Cahn
kicked it off with his thoughts on another boom year for the
domain business in 2007. "With a total base of more than 146 million domains, the rapid and continued growth and
expansion of new domain registrations worldwide is proof that
the industry as a whole is healthy," Cahn said. "Not
only have .com domains continued to expand at a healthy rate,
but other TLDs and extensions have also seen remarkable growth.
Localization of the internet continues to increase. Not only
have we seen a stronger interest in geo target domains, but
country code domains – with Germany’s .de and China’s .cn
leading the pack – continue to draw attention from both
businesses looking for market share in those countries and
individual domain investors who are expanding their portfolios.
We see even further evidence of this with the increase in demand
for Internationalized Domain Names (IDNs), which allow internet
users with a non-ASCII alphabet to type domains in their native
languages."
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"The
organization, popularity, and growth of the live domain name
auction has been a significant milestone in 2007," Cahn
noted. "We are beginning to see some competition and
“coopetiton” (competitors working together to advance the
industry), with Sedo
and our new sister company, SnapNames.com
(also acquired by Oversee in 2007), bringing live domain name
auction to domain-related trade shows. The various
iterations and concepts we are all bringing to market are
healthy for the industry as a whole. In addition, other partners
of ours such as Fabulous,
NameMedia,
RevenueDirect,
and others have been both buyers and sellers at most of our
events this past year which has demonstrated cooperation, and
alignment never seen before. Indeed, we have come a long way
from our first T.R.A.F.F.I.C. event in 2004, where there was a
manual domain auction process. Now auctions have grown into
multi-million dollar events, with online, proxy and telephone
bidding."
"The
sheer number of events has also grown," Cahn added.
"In 2007, Moniker alone hosted 10 live and online domain
name auctions at both industry and “niche” events. T.R.A.F.F.I.C.
New York was the break-out event of the year netting more than
$12 million during the live, four-hour event and subsequent
online auction. The
publicity surrounding these events has lead to a greater
understanding of the industry as a whole and an increase in the
price of domains. We’ve seen this happen before our eyes at
some of the niche auctions we’ve done. The secondary market
for unique, marketable domains has risen greatly and we feel
that everyone from corporate executives to brand managers on
Madison Avenue are starting to understand the value of a domain
name."
| "These
trends influenced a great deal of growth at Moniker," Cahn
said. "As a result of our auctions and our related Domain
Asset Management suite of services, Moniker experienced growth
in registrations of more than 50% and saw a 109% increase in
domain sales year-over-year. These were led by some of the
industry’s top-grossing domain transactions of 2007. Porn.com
(brokered by Moniker) topped this year’s chart when it sold
for $9.5 million in May and we had other significant success
allowing us to capture 4 of the top 5 domain name sales of 2007
according to DN
Journal’s domain sales chart. |
Cahn
(left) & auctioneer Joel Langbaum at the
Nov. 2007 GeoDomain Expo in San Francisco |
Looking
ahead to 2008 Cahn said, "Moniker
headed into 2008 with excellent momentum. Of course, it started
when we announced that Moniker has joined forces with
Oversee.net, a leading technology-driven online marketing
solutions company and parent company of Snapnames.
With our addition to the Oversee family, we can together
leverage our capabilities, and those of SnapNames, to offer the
industry’s most comprehensive live and silent auction services
as well as the most complete suite of Domain Asset Management
Products and Services available."
"We will also continue to bring auctions to premiere
and niche events throughout the world. This global expansion
will provide new opportunities for us and domain investors
around the world. Whether you participate as a buyer, seller, or
observer, these events will benefit you and the industry.
2008 will also be more and more challenging for the
domain industry from a legal perspective and with regard to
security, trademarks, cybersquatting, customer confusion and
monetization of traffic," Cahn
concluded.
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Sedo.com
CEO Tim Schumacher |
Now
let's turn to the CEO of another industry powerhouse, Sedo.com
Co-Founder Tim Schumacher whose company also took part in 2007's
continuing wave of consolidation. "Sedo
was certainly very happy with how our business in a thriving
environment, developed," Schumacher said. "Apart from
our acquisition of GreatDomains.com,
we didn't have any major events, but instead, we focused on
quietly improving our products and processes and almost
doubling our revenue and the revenue we pay to our clients - did
you know, by the way, that in 2007, we at Sedo paid out over
$100 million for domain sales and domain parking to our
clients?"
"2007
was also a big year for auctions," Schumacher noted.
"We see more and more people pushing their names into
auctions, when they get a bid through Sedo (and this also
does make sense whenever someone owns a name for which there
could be demand from more than |
| one bidder). We also ran more and
more monthly and topic/country-specific auctions, and of course
also the dotMobi premium auctions."
"This was probably also Sedo's
biggest bummer of the year," Schumacher admitted. "We really didn't anticipate that
level of demand, but the auction received so much
attention in the final moments that our auction servers
crashed before the completion of the auctions, rendering our
system incapable of processing many validly submitted bids,
including proxy bids set by user’s using the feature to
automatically bid up to a maximum amount, and sending out winner
notifications in error. It was a tough moment for me personally
as well, because no matter on which decision we took, we knew we
wouldn't make everyone happy, and all we could do is apologize.
We do hope though that with dotMobi's decision to re-run
the auction starting January 23 (which we also believe is the
most fair option to everyone), people will be understanding
and give the auction another shot."
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"Looking
at the entire industry, I believe 2007 definitely was a good
year for the industry again, though things are definitely not as
easy as two years ago and competition is further
heating up," Schumacher observed. "With competition
increasing, consolidation is too. We have seen major players
(e.g. Ireit) going through restructurings and others being
actively shaping consolidation (e.g. NameMedia or
Oversee)."
| And
how about 2008? "Just as for 2007, I see that we move even
further down the road in our "domain evolution
theory", meaning less expiring market, more domain sales
and portfolio sales," Schumacher said. "I also think
the Registrars are starting to wake up and they will play a more
important role, either by partnering (smart!) or by doing things
on their own (smart only if you're among the top 3 in the
world!)."
"Also,
I do think domaining will move more mainstream, with advertisers
seeing the value of domains (especially the improved long-term
ROI vs. paying every month in a PPC model). That's what will
increase our market in the long run... not if there's only a
market for domains between domainers themselves.
In regards to
that, I'd also like to congratulate NameMedia for filing
for their IPO! NameMedia has |
|
| done a great job in the past
years and we at Sedo applaud their IPO efforts and
drive to bring greater attention and awareness to the domain
name industry outside the original domain market. It's good to
see that with companies like NameMedia generating interest
and excitement on Wall Street, individuals and investors alike
are realizing that domain names are not simply a cost of doing
business online or a novelty, but rather a valuable asset that
can be bought, sold and utilized strategically for any number of
activities" Schumacher said. |
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|
We
are glad Tim mentioned NameMedia. We certainly would have had
representatives from the company in this article, but because
they have filed their IPO they are now in an SEC-mandated quiet
period that prevents them from commenting publicly. We wish them
the best with their offering and look forward to having them
back in next year's State of the Industry report. |
Through
their AfternicDLS,
NameMedia made a big push in getting aftermarket domains exposed
in new venues in 2007. That has also been the focus of Fabulous.com's
new Domain Distribution Network.
Fabulous COO Dan Warner has long been one of our go-to guys when
we are looking for in-depth industry analysis. He can speak with
authority on every aspect of the industry but for this article
we focused on the domain aftermarket where, through the DDN,
Fabulous is making their newest initiative.
|
"New
retail sales channels via the registrars and auctions dominated
growth of domain sales in 2007," Warner noted.
"Registrars were finally enabled to actively trade
aftermarket domains at fixed prices with instant settlement and
high quality control. Most of the major registrars were able to
benefit from the robust rollout of new contextual technology,
quality controls, and registrar API’s to flex their muscles in
a largely new and untapped market for them. As an added benefit,
new registrations increased for registrars when aftermarket
domains were listed in-line with the new registration
path."
"Domain
banners (on partner registrar sites) which advertised
aftermarket domains provided a new traffic stream to registrars.
This new traffic sold a massive flow of new registrations,
aftermarket domains, hosting services, and other registrar
products making domain banner traffic a proven and important new
source of income for domain owners and registrars alike. A
source of revenue that is now difficult to discard," Warner
said.
|
Fabulous.com
COO Dan Warner |
"Domain
banner traffic is expected to produce half of the registrar
aftermarket sales in 2008. New registrars are rolling out
aftermarket domain systems and a wide variety of new domain
stock is becoming available through the global listing system to
registrar clients. 2008 with be the year of aftermarket domain
stock and sales. After seeing some portfolios increase net
profits by millions of dollars last year through new registrar
aftermarket sales, domain owners are unlikely to ignore the high
profit gains to be made in 2008," Warner concluded.
| A
key reason that the aftermarket continues to scale news heights
is the availability of domain financing, an area that was
pioneered by DomainCapital.com.
Their Presdent, Robert Alfano, told us "Domain Capital is in the unique position of not owning any Premium domain
names, but |
|
Domain
Capital President Robert Alfano
(left) with partner Gregg Freeman |
adding a service to an ever growing industry. From where we
stand, we are seeing numerous inquiries a day for our financing services and
with the additional Trade Shows, which adds more Live Auctions we are seeing
more financing opportunities from that avenue as well."
"The sky seems to be the limit and we don't see the sales in the secondary
market slowing down," Alfano said. "Even with consolidation taking place the Auctions
allow a well organized and professional forum for domains to trade. I would
say the most significant event of 2007 is the increase of live and online
auctions that are taking place and that are ALL highly successful."
Looking
ahead to 2008 Alfano said, "As
|
| Domain Capital enters our 3rd year being in business we see
consolidation as the possible theme of 2008. When you have an Oversee.net
buy a Moniker in the first week of the new year you can only expect more
acquisitions and mergers. And as we have stated before, we are looking to
continue our growth and support within an industry that continues to grow at
the speed of light." |
Coming
Up Next on Page 2 of DN
Journal's Jan. 2008 State of the Industry Report
-
Our
Experts on the Domain Development Debate
-
WashingtonVC
Founder Michael Mann Wants Domain Owners to Wake Up!
-
Internet
Real Estate Heavyweights Andrew Miller and
Mike "Zappy" Zapolin Weigh In
-
Michael
and David Castello in a Music Video You Won't Want to Miss!
Continue
to Page 2
|
