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In
our July newsletter
I wrote "the
domain aftermarket may have turned a corner
in the 2nd quarter of 2013," noting a 7%
increase in total sales $ volume reported to us
from the same quarter last year, as well as improved
median sales prices. Now that 3rd quarter sales data is
in I can say we have turned the corner and that
when we saw that 7% increase in the second quarter we
hadn't seen anything yet. With
the high end of the market finally making a
comeback, total sales across all extensions not only
improved in 3Q-2013 - they exploded. In 2Q-2013 $22.4
million in sales were reported to us. In 3Q-2013
that number jumped to $30.8 million - a 37.5%
increase. |
Growing
sales image
from Bigstock
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When
we looked at .com sales alone the numbers were even
more impressive. In the previous quarter (2Q-2013) $16.8
million in .com sales were reported. In 3Q-2013 that
numbered rocketed to $25.8 million, a 53.5%
rise from one quarter to the next. Better yet,
the 3Q-2013 results were 60% higher than the $16.1
million in .com sales reported in the same quarter a
year ago (3Q-2012).
As I noted above, a key
driver was the return of the high end of the market
after a long recession fueled absence. In 3Q-2013 we saw
IG.com sell for $4.7 million and 114.com
go for $2.1 million. Three other sales came in at
a half million dollars or more. What's more, the 4th
quarter we are in now got off to an excellent start with
Rick Schwartz selling eBet.com for $1.35
million and six other sales hitting six figures in
the first half of October alone (two of those nearly
reached the half million mark). You can see the latest Year
to Date Top 100 sales here,
and more detailed weekly reports from throughout the
year can be found in our Domain
Sales Archive.
| While
.com was shooting the lights out the other
categories did not fare as well. The ccTLDs
were down slightly in 3Q-2013 from the same
quarter a year ago, dipping from $3 million
in reported 3Q-2012 sales to $2.9 million
(a 3.4% decline). The drop from the
previous quarter was higher, with 3Q-2012 down
12% from the $3.3 million recorded
in 2Q-2013. |
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British
Internet Flag image from Bigstock |
Why
is this happening? There are two possible
culprits. One is that there has been something of
a cloud over one of the strongest country codes - Great
Britain's co.uk - because Nominet (the
governing body of the extension) has expressed
interest in allowing registrations in the top
level .uk extension for the first time.
Many feel that would undermine the value of
existing .co.uk domains. Then there is the
impending arrival of hundreds of new
gTLDs. Some potential ccTLD buyers could be
waiting to see if they can get their preferred
term for less in a new TLD.
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As for the non .com
gTLDs (.net, .org, .info, .biz and others), the
results were a mixed bag. That group fell 4.5%
from the previous quarter, down from $2.2 million
to $2.1 miillion, but they jumped 10% form
the same quarter a year ago when reported sales in this
category came in at $1.9 million.
One other note on non
.com gTLDs - this is the category that the new gTLDS,
that have just started arriving, fall into. Currently,
reported .com sales are 15 times higher than all
extensions in this category put together. When
you consider that .net, .org and the rest have been
around for one to two decades without denting
.com, it doesn't appear likely that the coming new gTLDs
(even though there will be a lot more of them) will
threaten .com's dominance for a long time to come (if
ever), More of something doesn't necessarily make it
more valuable - demand has to be there too.
Whether or not there will be enough demand to keep
hundreds of new gTLDs afloat will almost certainly be
the industry's biggest story over the next few years.
We have some more
3Q-2013 numbers to get into but first, for new readers,
let me lay out the parameters of the data we collect and
report. To keep the size of our weekly
domain sales report manageable, 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. Conversely, total dollar volume
reported to us is less than it would be if we
tracked sales at the lowest end of the market.
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keep in mind that no one has data on the multitude
of sales that are never disclosed or are
completed under non disclosure agreements (most
of the largest sales are subject to NDAs).
Reported sales do give us some valuable insight
into the market but they still represent a small
fraction of all of the sales taking place. Escrow.com's
Andee Hill illustrated that point when she
spoke at October's T.R.A.F.F.I.C.
conference in Florida and noted
that they close more sales in a week than
some aftermarket sales venues report in a year.
We only see the tip of an iceberg that is
much bigger than most people realize.
Now, getting back
to the 3Q-2013 numbers, let's look at the median
sales prices (the number at which half of all
sales are higher and half |
Tip
of the iceberg image from Bigstock |
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lower), a more stable gauge of sales trends than
average prices because averages can be skewed
dramatically by just a handful of sales. For .coms,
the median sales price of $3,088 in 3Q-2013
was virtually unchanged from both the
previous quarter and the same quarter a year ago
(less than 1% difference either way). For the ccTLDs
the 3Q-2013 median price of $1,934 was down
3% from the previous quarter but up 6%
from the same quarter a year ago. For the non
.com gTLDs the median price was down in both comparisons.
At $1,800 in 3Q-2013, it was off 10%
from the previous quarter and down 5% from
the same quarter a year ago. Lower medians for
this group could indicate that the arrival of
hundreds of new extensions in this category (and
thus countless cheaper alternatives) - are having
an effect on prices. |
One other metric worth
looking at is the number of transactions
reported. In 3Q-2013 4,227 transactions were
reported to us across all extensions. That is 6%
fewer transactions than the previous quarter (and
about the same from 3Q-2012). When you consider the much
higher total dollar volume we saw in 3Q-2013 was done on
fewer transactions, that means average prices increased
strongly. We saw transactions go up considerably
during the recession, most likely because many owners
were forced to let domains go, sometimes at fire sale
prices. That no longer seems to be the case.
The results were the
same for .coms only, with 6% fewer transactions
that the previous quarter and the same quarter a year
ago. For the ccTLDs, the number of transactions
reported was down 4% from the previous quarter
but up 7.5% from the same quarter a year ago. The
non .com gTLDs, like the .coms, saw fewer
transactions in both quarterly comparisons, falling
10% from the previous quarter and 3% from
3Q-2012.
With 3Q-2012 now in the
books we are entering the home stretch for 2013.
If we can close this year with a fourth quarter that
shows as much improvement at this one did, it
could be a Merry Christmas and Happy New Year for
domain investors indeed.
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