DOMAINfest Global '08



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March 07, 2015

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The State of the Industry January 2008: Our Panel of Domain Experts Analyze What Happened in 2007 and Share Their Forecasts for 2008

It's time again for our annual round up of domain industry experts to get their forecasts for the New Year as well as their thoughts on the key trends that impacted the domain business in 2007. We've brought back some of your favorites from past State of the Industry reports and also reached out to some new contributors to keep things fresh. In this article, you will hear from leading company CEOs, major domain portfolio owners, conference organizers and representatives from the legal, finance and domain development sectors.

The industry is coming off it's fourth consecutive year of robust growth and that has attracted major capital investors who are attempting to roll up the domain space. In last year's article the consensus among our panel of experts was that consolidation would continue to be the key force in


Will the domain industry continue to enjoy 
smooth sailing in 2008?
We asked more than 
a dozen experts for their forecast and what they 
viewed as the most important trends from 2007. 

2007, just as it was in 2006. Their forecasts again proved to be on the money. The most recent example of that was this month's announcement that had acquired

With the ink on that deal barely dry, we felt Moniker CEO Monte Cahn (who signed a long term deal to stay on under Oversee) would be the perfect lead-off man for this year's round up. In addition to being one of the most popular registrars among domain pros, Moniker permanently changed the industry for the better by pioneering the live auction model that has produced so many high dollar domain sales.

Moniker CEO Monte Cahn

Cahn kicked it off with his thoughts on another boom year for the domain business in 2007. "With a total base of more than 146 million domains, the rapid and continued growth and expansion of new domain registrations worldwide is proof that the industry as a whole is healthy," Cahn said. "Not only have .com domains continued to expand at a healthy rate, but other TLDs and extensions have also seen remarkable growth. Localization of the internet continues to increase. Not only have we seen a stronger interest in geo target domains, but country code domains – with Germany’s .de and China’s .cn leading the pack – continue to draw attention from both businesses looking for market share in those countries and individual domain investors who are expanding their portfolios. We see even further evidence of this with the increase in demand for Internationalized Domain Names (IDNs), which allow internet users with a non-ASCII alphabet to type domains in their native languages."    

"The organization, popularity, and growth of the live domain name auction has been a significant milestone in 2007," Cahn noted. "We are beginning to see some competition and “coopetiton” (competitors working together to advance the industry), with Sedo and our new sister company, (also acquired by Oversee in 2007), bringing live domain name auction to domain-related trade shows.  The various iterations and concepts we are all bringing to market are healthy for the industry as a whole. In addition, other partners of ours such as Fabulous, NameMedia, RevenueDirect, and others have been both buyers and sellers at most of our events this past year which has demonstrated cooperation, and alignment never seen before. Indeed, we have come a long way from our first T.R.A.F.F.I.C. event in 2004, where there was a manual domain auction process. Now auctions have grown into multi-million dollar events, with online, proxy and telephone bidding."   

"The sheer number of events has also grown," Cahn added. "In 2007, Moniker alone hosted 10 live and online domain name auctions at both industry and “niche” events. T.R.A.F.F.I.C. New York was the break-out event of the year netting more than $12 million during the live, four-hour event and subsequent online auction. The publicity surrounding these events has lead to a greater understanding of the industry as a whole and an increase in the price of domains. We’ve seen this happen before our eyes at some of the niche auctions we’ve done. The secondary market for unique, marketable domains has risen greatly and we feel that everyone from corporate executives to brand managers on Madison Avenue are starting to understand the value of a domain name."

"These trends influenced a great deal of growth at Moniker," Cahn said. "As a result of our auctions and our related Domain Asset Management suite of services, Moniker experienced growth in registrations of more than 50% and saw a 109% increase in domain sales year-over-year. These were led by some of the industry’s top-grossing domain transactions of 2007. (brokered by Moniker) topped this year’s chart when it sold for $9.5 million in May and we had other significant success allowing us to capture 4 of the top 5 domain name sales of 2007 according to DN Journal’s domain sales chart.

Cahn (left) & auctioneer Joel Langbaum at the 
Nov. 2007 GeoDomain Expo in San Francisco

Looking ahead to 2008 Cahn said, "Moniker headed into 2008 with excellent momentum. Of course, it started when we announced that Moniker has joined forces with, a leading technology-driven online marketing solutions company and parent company of Snapnames. With our addition to the Oversee family, we can together leverage our capabilities, and those of SnapNames, to offer the industry’s most comprehensive live and silent auction services as well as the most complete suite of Domain Asset Management Products and Services available." 

"We will also continue to bring auctions to premiere and niche events throughout the world. This global expansion will provide new opportunities for us and domain investors around the world. Whether you participate as a buyer, seller, or observer, these events will benefit you and the industry. 2008 will also be more and more challenging for the domain industry from a legal perspective and with regard to security, trademarks, cybersquatting, customer confusion and monetization of traffic," Cahn concluded. CEO Tim Schumacher

Now let's turn to the CEO of another industry powerhouse, Co-Founder Tim Schumacher whose company also took part in 2007's continuing wave of consolidation. "Sedo was certainly very happy with how our business in a thriving environment, developed," Schumacher said. "Apart from our acquisition of, we didn't have any major events, but instead, we focused on quietly improving our products and processes and almost doubling our revenue and the revenue we pay to our clients - did you know, by the way, that in 2007, we at Sedo paid out over $100 million for domain sales and domain parking to our clients?"

"2007 was also a big year for auctions," Schumacher noted. "We see more and more people pushing their names into auctions, when they get a bid through Sedo (and this also does make sense whenever someone owns a name for which there could be demand from more than  

one bidder). We also ran more and more monthly and topic/country-specific auctions, and of course also the dotMobi premium auctions."

"This was probably also Sedo's biggest bummer of the year," Schumacher admitted. "We really didn't anticipate that level of demand, but the auction received so much attention in the final moments that our auction servers crashed before the completion of the auctions, rendering our system incapable of processing many validly submitted bids, including proxy bids set by user’s using the feature to automatically bid up to a maximum amount, and sending out winner notifications in error. It was a tough moment for me personally as well, because no matter on which decision we took, we knew we wouldn't make everyone happy, and all we could do is apologize. We do hope though that with dotMobi's decision to re-run the auction starting January 23 (which we also believe is the most fair option to everyone), people will be understanding and give the auction another shot." 

"Looking at the entire industry, I believe 2007 definitely was a good year for the industry again, though things are definitely not as easy as two years ago and competition is further heating up," Schumacher observed. "With competition increasing, consolidation is too. We have seen major players (e.g. Ireit) going through restructurings and others being actively shaping consolidation (e.g. NameMedia or Oversee)."

And how about 2008? "Just as for 2007, I see that we move even further down the road in our "domain evolution theory", meaning less expiring market, more domain sales and portfolio sales," Schumacher said. "I also think the Registrars are starting to wake up and they will play a more important role, either by partnering (smart!) or by doing things on their own (smart only if you're among the top 3 in the world!)." 

"Also, I do think domaining will move more mainstream, with advertisers seeing the value of domains (especially the improved long-term ROI vs. paying every month in a PPC model). That's what will increase our market in the long run... not if there's only a market for domains between domainers themselves. 

In regards to that, I'd also like to congratulate NameMedia for filing for their IPO! NameMedia has 

done a great job in the past years  and we at Sedo applaud their IPO efforts and drive to bring greater attention and awareness to the domain name industry outside the original domain market. It's good to see that with companies like NameMedia generating interest and excitement on Wall Street, individuals and investors alike are realizing that domain names are not simply a cost of doing business online or a novelty, but rather a valuable asset that can be bought, sold and utilized strategically for any number of activities" Schumacher said.

We are glad Tim mentioned NameMedia. We certainly would have had representatives from the company in this article, but because they have filed their IPO they are now in an SEC-mandated quiet period that prevents them from commenting publicly. We wish them the best with their offering and look forward to having them back in next year's State of the Industry report.

Through their AfternicDLS, NameMedia made a big push in getting aftermarket domains exposed in new venues in 2007. That has also been the focus of's new Domain Distribution Network. Fabulous COO Dan Warner has long been one of our go-to guys when we are looking for in-depth industry analysis. He can speak with authority on every aspect of the industry but for this article we focused on the domain aftermarket where, through the DDN, Fabulous is making their newest initiative.

"New retail sales channels via the registrars and auctions dominated growth of domain sales in 2007," Warner noted. "Registrars were finally enabled to actively trade aftermarket domains at fixed prices with instant settlement and high quality control. Most of the major registrars were able to benefit from the robust rollout of new contextual technology, quality controls, and registrar API’s to flex their muscles in a largely new and untapped market for them. As an added benefit, new registrations increased for registrars when aftermarket domains were listed in-line with the new registration path."  

"Domain banners (on partner registrar sites) which advertised aftermarket domains provided a new traffic stream to registrars. This new traffic sold a massive flow of new registrations, aftermarket domains, hosting services, and other registrar products making domain banner traffic a proven and important new source of income for domain owners and registrars alike. A source of revenue that is now difficult to discard," Warner said. COO Dan Warner

"Domain banner traffic is expected to produce half of the registrar aftermarket sales in 2008. New registrars are rolling out aftermarket domain systems and a wide variety of new domain stock is becoming available through the global listing system to registrar clients. 2008 with be the year of aftermarket domain stock and sales. After seeing some portfolios increase net profits by millions of dollars last year through new registrar aftermarket sales, domain owners are unlikely to ignore the high profit gains to be made in 2008," Warner concluded. 

A key reason that the aftermarket continues to scale news heights is the availability of domain financing, an area that was pioneered by Their Presdent, Robert Alfano, told us "Domain Capital is in the unique position of not owning any Premium domain names, but 

Domain Capital President Robert Alfano 
(left) with partner Gregg Freeman

adding a service to an ever growing industry. From where we stand, we are seeing numerous inquiries a day for our financing services and with the additional Trade Shows, which adds more Live Auctions we are seeing more financing opportunities from that avenue as well."

"The sky seems to be the limit and we don't see the sales in the secondary market slowing down," Alfano said. "Even with consolidation taking place the Auctions allow a well organized and professional forum for domains to trade. I would say the most significant event of 2007 is the increase of live and online auctions that are taking place and that are ALL highly successful." 

Looking ahead to 2008 Alfano said, "As 

Domain Capital enters our 3rd year being in business we see consolidation as the possible theme of 2008. When you have an buy a Moniker in the first week of the new year you can only expect more acquisitions and mergers. And as we have stated before, we are looking to continue our growth and support within an industry that continues to grow at the speed of light."

Coming Up Next on Page 2 of DN Journal's Jan. 2008 State of the Industry Report

  • Our Experts on the Domain Development Debate

  • WashingtonVC Founder Michael Mann Wants Domain Owners to Wake Up!

  • Internet Real Estate Heavyweights Andrew Miller and 
    Mike "Zappy" Zapolin Weigh In

  • Michael and David Castello in a Music Video You Won't Want to Miss!

Continue to Page 2



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