January 2012         DNJournal.com     The Domain Industry News Magazine

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Reported Domain Sales in 2011 Slide Vs. 2010 - Mostly Due to Impact of Sex.com

We've just finished crunching the numbers for the 16,731 domain sales reported to us in 2011 (5% more transactions than were reported to us in 2010), including the numbers for the final quarter of 2011. With that information in hand, we can now share 2011 full year and 4th quarter sales comparisons with you so you can see how the market fared in the year just past versus the previous one (2010).

While more transactions were reported to us in 2011, the total dollar volume of those sales was down from 2010 for both the year as a whole and the 4th quarter vs. 4Q-2010. There are two reasons for that. The biggest one is that the gargantuan sale of Sex.com for $13 million (the largest cash sale ever reported) was logged in 4Q-2010 giving both that quarter and 2010 as a whole a giant head start vs. 2011. The other is that median sale prices (the point at which half of reported sales were higher and half lower) dipped in all categories in 2011.

We believe slipping median prices were a result of the dramatic decline in PPC prices that carried a double whammy. Lower revenue streams dropped the value of domains being sold on the basis of traffic alone. In addition, the drop in PPC revenue forced many portfolio owners to sell off some 

 

Image: jscreationzs / FreeDigitalPhotos.net

of their domains to make up for lower parking revenue. With more domains being put on the market by motivated sellers, the median prices were bound to take a hit.

Before we look at the numbers, for the benefit of those who are new to our regular domain sales reports, it bears repeating that those weekly reports (started in the fall of 2003) are meant to be an educational tool - not a comprehensive collection of all sales made in the domain aftermarket in a given week. No one will ever be able to put together a list of all sales because the majority of transactions are never reported, including many of the biggest ones that are often subject to non-disclosure agreements

However, reported sales allow us to give you thousands of specific examples of what given domain names have sold for. In addition, though those sales represent just the tip on the aftermarket iceberg, the data sample is large enough to give you at least a rough idea of current market trends overall. While reviewing our numbers also note that we track only notable sales, using .com sales starting at $2,000 and all other extensions starting at $1,000 as our baselines. Since our data does not include the lower end of the market the median sales prices from our database are higher than medians would be if we tracked the huge number of two and three digit sales they are made each week.

Having set the stage, let's proceed with a look at the numbers which will show you just how much difference the sale of a single domain (in this case Sex.com) can make in the results for a single quarter and even an entire year. In 2011 the total value of all sales reported to us was $94.5 million, significantly lower than the $112.8 
million reported in 2010. However if Sex.com had not closed in 2010, the number for that year would have been $99.8 million. Still a little more than 5% over 2011, but nowhere near the 19% advantage that Sex.com gave 2010 vs. 2011. 

Sex.com had an even bigger impact on comparisons between 4Q-2011 and the previous year. Buoyed by Sex.com, the total dollar value of sales reported in 4Q-2010 was $40.9 million. In 4Q-2011 that number was just $23.7 million, a whopping 42% decline. Without Sex.com, the 4Q-2010 number would have been chopped to $27.9 million, still ahead of 4Q-2011 but by a much lower margin. 

We'll look at some more 4Q-2011 vs. 4Q-2010 numbers, but first let's dissect the rest of the full year numbers that people have been waiting 12 months to see. Let's start by breaking out the results for specific TLD categories; .coms only, ccTLDs and non .com gTLDs. .Com only sales reported to us in 2011 totaled $67.2 million, down 15% from the $79.1 million reported in 2010. Once again, 2010 can thank Sex.com for that. Without that landmark sale, 2011 .com sales would have actually been a bit higher than those in 2010 ($67.2 million vs. $66.1 million). Median sale prices for .coms were down by the same percentage as total $ volume, slipping from $3,500 to $3,000

Image: digitalart / FreeDigitalPhotos.net

Reported sales volume for ccTLDs was also down, sliding 24% from $22.3 million in 2010 to $17 million in 2011. However, the median sales prices for country code domains held up better than any other category, coming in at $2,000 in 2011, down just a hair from the $2,070 we saw in 2010. 

For the non .com gTLDs, the percentage decline was the least of any category, dipping 10% from $11.4 million in 2010 to $10.2 million in 2011. Median sale prices for non .com gTLDs were off by the same percentage, drifting down to $1,800 in 2011 after being at $2,000 in 2010. 

Now let's look at the final quarter of 2011 to see how it compared to both the same quarter a year ago and the previous quarter (3Q-2011). I noted the 4Q-2011 vs. 4Q-2010 total sales volume numbers above. 4Q-2011 was also down against the previous quarter but there was a much smaller difference there. 3Q-2011 total dollar volume reported was $25.5 million, leaving 4Q-2010 7% behind at $23.7 million.   

Looking at .coms only, 4Q-2011 ran a tight race against 3Q-2011 and wound up trailing by less than 3% with $17.5 million in 4Q-2011 vs. $18 million in 3Q-2011. Year over year Sex.com made it a different story giving .coms $31.9 million in 4Q-2010 vs. the $17.5 million recorded in the same quarter this year. Once again, most of that margin disappears with Sex.com out of the equation - that would have left 4Q-2010 .com sales reported at $18.9 million. With respect to median .com sales prices, 4Q-2011 came in at $3,188. That is better than the $3,002 recorded in 3Q-2011 but down from the $3,500 logged in 4Q-2010.

Image: Master isolated images
FreeDigitalPhotos.net

For the ccTLDs, The $4 million in sales reported in 4Q-2011 was down from $5 million the previous quarter as well as the $5.5 million reported in 4Q-2010. However, median country code sale prices in 4Q-2011 improved on the $1,865 we saw in the previous quarter. It did not eclipse the $2,150 median from the same quarter a year ago though.

The non .com gTLDs had the biggest percentage fall in total $ volume in 4Q-2011 compared to the same quarter a year ago - plummeting 35% from $3.4 million in 4Q-2010 to $2.2 million in the most recent quarter. The non .com gTLDs were also down 12% from the previous quarter (3Q-2011) when $2.5 million in sales were reported. The median price for 4Q-2011 non .com gTLDs was down only slightly from the previous quarter, dipping from $1,800 to $1,788, with a larger deficit against the same quarter a year ago when the median in this category was $2,085. 

So, we have another year in the books. We find it interesting that anecdotally, many companies and individual sellers have told us 2011 was a good sales year for them (especially with respect to sales made under non disclosure agreements which tend to be the biggest sales). The fall off in total reported sales volume can be attributed to the very high end of the market. In addition to the impact of the Sex.com sale, there was a dearth of seven-figure sales reported in 2011 - you will find only three of them on our 2011 Top 100 Reported Sales chart and two of those barely made it - coming in at exactly $1 million each. So, even though fewer names are changing hands at that stratospheric level where few ever play anyhow, most sellers are reporting good results, especially in the market's mid-range. Now it's on to 2012 and we are looking forward to the story the new year has to tell. 

*****


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