(Editor's Note: This article originally appeared in 2004 but was completely revised and updated in July 2006).

Sedo has long considered the United Kingdom a key market and has been active in the UK for almost five years. Last year, Sedo even hosted the UK’s first ever domain event, which was a fantastic opportunity to learn key insights into the market, exchange ideas and suggestions from key players, and to communicate what our UK users can gain from Sedo’s overall experience operating in the secondary market. 

The UK is not just one of most important industrial nations for the “Old Economy,” it has a vibrant economy and a well-educated population that is extremely internet savvy, making it one of the strongest internet markets world-wide. Despite all this, some of the best bargains in the aftermarket are to be found in the UK, especially among .CO.UK domains. We would like to take this opportunity to explain why this is, and discuss a little bit about the UK domain name market in general. 

Overall Structure 

The .UK country-code top-level domain (ccTLD) is managed and operated by Nominet, a private, not-for-profit company, on behalf of the UK government. The company was established in 1996 and rather than open the .UK ccTLD for public registration, Nominet created sub-domains of .UK for specific uses, such as .CO.UK for commercial uses, .ORG.UK for non-profits, and .GOV.UK for governmental sites. Registrations are handled a bit more centrally than for other TLDs, with owners being registered with both a domain registrar, which runs issues such as performing an initial registration and DNS/URL redirections, and Nominet, which handles official ownership and ownership transfers. 

Primary Market 

When Nominet first came on the scene in 1996, 2000 .UK domain names were registered within the first month of operation. Nearly ten years later, one can easily say that .UK registrations have kept up the momentum. In May 2006, the five millionth .UK domain name was registered. Registrations in general for the .UK market have held their own since 1996. Nominet has been a busy place since then, as according to them, they average 144,000 domain registrations each month. Nominet expects this behavior to continue. 

.UK Market Share 

The domain name market in the UK is well developed and one of the top three markets world wide along with Germany and the United States. A recent industry brief from .COM registry Verisign has shown that .CO.UK domains hold the number four place out of all registered domains, just behind .DE and .NET and .COM. Statistics from Zooknic show that British registrants have the second highest number of domains registered (after US registrants) across all TLDs. 

The overall strength and growth of the UK primary market, and especially the high UK market share (relative to other countries) makes the UK one of the most important secondary markets as well. In fact, with the recent introduction of .EU domains, UK residents were second in the number of .EU registrations with nearly 300,000, close behind Germany, whose residents registered 500,000. With such aggressive additions to their portfolios, it is not only the .UK that is doing well, but UK domainers in general! 

Secondary Market 

Anyone who visits DNJournal.com often does not need to be told that the success and growth in the primary market has been mirrored in the domain name aftermarket. Sedo’s recent experiences alone show that the secondary market has picked up dramatically and is now in a strong growth period. Unlike its competitors, Sedo fortunately has never had a “slump” period in its past and has continued to expanded due to its strong international position. This success is in large part due to the continual growth of the secondary market in the UK. 

Recent High Profile .CO.UK Domain Sales 

Sources: DNJournal.com, Sedo.co.uk

As often mentioned on DNJournal, many, and often the best, sales go unmentioned as they are between private parties and\or subject to confidentiality agreements. This is especially true in the .CO.UK market. The graph below shows the growth of .CO.UK domains listed for sale on Sedo from November 2004 through June 2006.

.CO.UK Catches Up 

While we do not like to brag, Sedo has been a key part of the recent boom in the secondary market and this success has come across all international markets. That being said, the UK market has grown proportionally compared to the rest of the aftermarket. A look at Sedo’s international domain sales for the last two quarters shows that the UK represents an important segment of Sedo’s customer base. It is interesting to note that this is despite the fact that .CO.UK sales only make up a small portion of the overall international sales at Sedo. While .CO.UK sales are showing strong signs of growth, they have quite a way to go to catch up to other TLD sales, even within the UK aftermarket itself. 

This disparity becomes clearer when you compare the success of the .DE ccTLD with that of .CO.UK. As previously reported in our “Around the World” articles, Germany’s .DE is having success almost on the level of .COM, showing strong six figure sales. This seems to beg the question: Why is the .DE so much more successful than the .CO.UK? 

Some Barriers to Future Growth 

One major barrier to domain speculation and a vibrant aftermarket for .CO.UK domains is the complicated, costly, and paperwork-intensive transfer process imposed by Nominet. Extra paperwork, which first must be requested from Nominet and then sent to both parties, means a typical transaction takes weeks to complete. Additional fees (close to 35 GBP) levied by Nominet for a transfer depress many low-end sales. However, this year Nominet will be revamping the transfer system to ease the process, which most feel will facilitate an increase in the number of transfers of .CO.UK domain names. 

Forums like DNForum, the UK specific AcornDomains.co.uk and journals like DNJournal have been instrumental in giving the secondary market a community with standards, and have opened up great networking opportunities. While many, especially DNJournal, have done an excellent job in encouraging internationalization, they have focused primarily on the .US and .COM domains, thereby only strengthening the .COM dominance. Involvement from the UK domain name community and fewer restrictions are certainly keys to this TLD realizing its potential in the future. 

The Future! 

Sedo has been working hard to expand the UK aftermarket and to raise the awareness of domainers to the opportunities in the UK and more specifically the .CO.UK market. Sedo is continually working with many of its UK partners to build upon the existing community and to help domainers of all levels build their networks. With the current growth seeming likely to continue to increase, Sedo foresees an eventual maturing of the market where .CO.UK sales will fall in line with their potential. Of course, that means that as long as the current situation still exists there are many bargains for domainers in the UK market, especially when hunting for .CO.UK names. So get out there and find that bargain .CO.UK! 

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