The Germans are not only the world�s largest beer drinkers, but they are among the world�s top �consumers� of Internet domain names. In absolute numbers, Germany is � after the United States � the second largest �domain country� in the world. (See Chart 1 in the footnotes: Growth in .de registration) 

Germany has the largest population (about 80 million people) and also the largest number of Internet users (about 35 million people) in Europe. Together with one of the least restricted domain registration policies and the cheapest domain registration fees, Germany has turned into a country of domain enthusiasts. So far, the Germans have registered nearly 6.5 million .de domains. 

In addition to that, they account for over 2 million CNO (.com .net .org) domain registrations. On top of this, a German domain registrar, Schlund.de, is the world�s largest registrar of .info domains. Overall, Germany�s certainly a country worth having a look at � at least from the domain point of view.  

Domain registration

Legal matters are very similar to the UDRP rules, with trademark rights usually having priority over the first-come-first-serve right of the domain holder. A few domain cases made it to the supreme court of Germany: in one rather bewildering decision, the court ruled that Mr. Shell had to give up the name Shell.de to the global oil company of the same name without any compensation. 

In another decision, it was decided that descriptive domain names in general do not violate any law and that the first-come-first-serve principle usually can be applied. As a result, descriptive domain names are heavily traded on the German secondary domain market.

User behaviour

Despite Google becoming more and more popular, domain names are still heavily used for searching purposes. A lot of users tend to enter the search keyword into the browser and simply add �.de�. Therefore, descriptive domain names have high values in the secondary market.

Domain Secondary Market

Despite the global Internet slump, the German domain market remains active. In the past few months, .de domain sales have consistently topped the list of high-value secondary market sales:

In addition, the Germans� enthusiasm for .info domains has translated into sales prices much higher than for equivalent quality English .info domains:

On the other hand, .com values lag significantly those in English-language and other markets. For most German companies, as long as the .de is secured, picking up the .com is an afterthought, not a requirement. 

One reason that the German domain market remains so much stronger than its counterparts is that, in contrast to the fragmented domain secondary market in the US, the German aftermarket is dominated by one player: Sedo.de. To put things in perspective, Sedo.de alone sells more domain names than Afternic and GreatDomains combined�and this in a market that is one-fourth the size of the US market. 

This greater relative clout helped Sedo.de successfully unify the primary and secondary domain markets by forming partnerships with a number of Germany�s leading domain registrars. This in turn attracts end-user domain buyers�businesses and corporations that may otherwise not have been aware of offers on the domain name secondary market.

How you can get involved

Even if your command of German is limited to �fahrvergnugen� and �bratwurst�, you can get in on the excitement in the German domain market. Here are a few strategies: 

1)       Sell English or acronym domains. Germans are excellent linguists, and almost everyone recognizes basic English business and tech-oriented vocabulary. Thus, these words in the .de or ,info extension can have value in the German market (although it is usually less than the German word). Example: Business.de, sold on Sedo for � 55,000.

2)   Go where the buyers are. No, you don�t have to hop a plane to Germany. Instead, you can market your domains to the world�s most active domain buyers simply by listing them for sale at Sedo. The best part is that you can submit your domains through Sedo.us or Sedo.co.uk, and they will automatically be listed on Sedo.de. (Hint: Select �German� as the domain�s language preference if it is best suited for this market.) Example: Musicals.com, an English-language .com domain, was purchased by a German buyer for $40,000.

3)       Buy from resellers. Germany didn�t experience the dot-com bubble to the same degree as the US, so you�ll find asking prices to be refreshingly realistic. This, combined with the fact that the Internet industry is still in the growth phases, means that a savvy domain investor can still do quite well here. Generic .DE�s are the most valuable, but if you�re the adventurous type, the potential of the new gTLDs, especially .info and .eu, also looks very good. Example: Reifen.de (�Tires�) was purchased on Sedo for � 5,000 in April of 2002. A year later, the savvy domain investor resold it for  �200,000!
 

Conclusion and Future Outlook

The market size and the strong penetration of the Internet makes the German domain market one of the most attractive markets in the world. It can be expected that there is still a period of growth in the market � though with somewhat lower growth rates than in the past years.  

With the shortage of .de domain names, other TLDs like .info are heavily advertised by most domain registrars. In addition, the upcoming .eu extension promises a consistent pan-European identity, an idea likely to appeal to a lot of German companies. The growth of the new TLDs as well as the continued growth of the secondary domain market are likely to be two of the trends that define the future of the domain industry in Germany.

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Footnote:

Chart 1: Growth in .de domain registrations. Source: DENIC

Our thanks to Tim Schumacher and Matthew Bentley for their work in producing this article. If you would like to comment, write [email protected].  

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