October 2012         DNJournal.com     The Domain Industry News Magazine

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Mixed Bag for 3Q-2012 Domain Sales with Strong Gains in the Median Sale Price and Number of Transactions But a Dip in Total $ Volume 

The domain sales story in the third quarter was a tale of two markets. The high end of the market, weighed down by continued sluggishness in the general economy, remained almost shuttered, but the mid range was a bee hive of activity, producing big jumps in the number of sales transactions reported and the median price of domain sold across all extensions. 

The lack of action at the high end resulted in the total $ volume of 3Q-2012 sales falling 17.6% from the same quarter a year ago - dropping from $25.5 million to $21 million. In 3Q-2012 the highest reported sale was Platinum.com at $250,000. In contrast, 3Q-2011 produced last year's biggest sale - Social.com at $2.6 million and two others that combined for over $1 million more - Aktien.de ("stocks" in German) at $725,000 and DataCenter.com at $352,500.

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Those sales illustrate how just a few sales can dramatically skew total $ volume numbers from one quarter to another. A better indicator of overall market health is the median sales price (the price at which half of all sales were higher and half lower). That number, buoyed by a busy market for mid-priced domains, jumped 20% in 3Q-2012 compared to the same quarter a year ago (rising from $2,588 to $3,103 across all extensions). 

Keep in mind that we do not track sales below four figures (to be specific we track .com sales of $2,000 and up and all other extensions from $1,000 or more). As a result our median figures are higher than they would be if we tracked the entire universe of domain sales and conversely, total dollar volume is considerably less than it would be if we tracked sales at the lowest end of the market). However by tracking the same metrics quarter after quarter, year end and year out, we have a good snapshot of overall market activity and trends. 

Another indicator of a bustling aftermarket was the huge jump in the number of transactions reported in 3Q-2012 - 4,342 across all extensions - a 65% rise from the 2,634 reported in 2Q-

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2011. Of course, while this is good news for brokers, sales venues and escrow companies, it is not necessarily good for some sellers who were pressured to put more names on the market to offset shrinking revenue from domain parking.

Now let's drill down further and break out results for .com only, for country code domains (ccTLDs) and for non .com gTLDs (such as .net and .org). The .coms alone fared better in the year over year total $ volume comparisons than the market as a whole did. While the entire market dipped 17.6% (as noted above), .com sales were down only 10% in 3Q-2012 vs. 3Q-2011 (sliding from $18 million to $16.1 million). That $16.1 million in 3Q-2012 also represented a 4.5% increase over the previous quarter (2Q-2012).

The .coms also saw a huge jump in transactions year of year, soaring 161% from 1,089 reported in 3Q-2011 to 2,841 in 3Q-2012. On the other hand, the median price paid for .coms remained virtually unchanged from last year ($3,002 in 3Q-2011 vs. $3,000 in 3Q-2012). 

The next biggest category was ccTLDs with $3 million in total $ sales volume. That was a surprisingly weak quarter for the country codes, off 40% from the $5 million reported in 3Q-2011. However, the lion's share of that fall can be attributed to a single sale in the 3rd quarter of last year - Aktien.de at $725,000. Even so, the ccTLDs were also off 14% from the previous quarter (2Q-2012 when $3.5 million in sales were reported). Year over year the country codes also saw their median price slip 2% (from $1,865 to $1,830) and the number of transactions fall 29% from 1,156 to 823

The non .com gTLDs had lower total $ volume and fewer transaction than ccTLDS but this category enjoyed a higher median price. The total $ volume figure dropped 25% from 2.54 million in 3Q-2011 t0 $1.9 million in 3Q-2012 but the median sales price rose 5% from $1,800 to $1,888 and jumped 11% from the previous quarter (2Q-2012 when it was $1,700).

Since we have three quarters of 2012 now in the books, one other number we can look at is total $ volume for the first nine months of this year vs. the first nine months of 2011. That figure was off 9% this year from $70.7 million to $64.3 million. Again, that edge for 2011 came from a much better performance at the high end of the market. There were three 7-figure sales and nine others of $500,000 or more in the first nine months of last year. In the first nine months of this year we saw only one 7-figure sale 

Image from Bigstock

(PersonalLoans.com at $1 million in February) and one $500,000 sale - Jackpot.com at an even $500,000 in April. 

With ICANN planning to start rolling out hundreds of new gTLDS some time in 2013, one of the most interesting stories in the upcoming year will be how that development will (or will not) impact the sales performance of current TLDs.

*****


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Ron Jackson
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