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At
this month's T.R.A.F.F.I.C.
2011 conference at the Ritz Carlton
on Fort Lauderdale Beach I gave an
update on the latest trends in the domain
aftermarket that included a breakdown of sales
reported to us in the latest quarter of this year
(3Q-2011). I pulled the data together just
hours before my talk and in this month's
newsletter will be publishing those numbers for
the first time. |
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Before we get to
the results, for the benefit of those who are new
to our regular domain
sales reports, I want to again lay out the
parameters of the sales we track. First and
foremost, those weekly reports, that we started
delivering in the fall of 2003, are meant to be an
educational tool - not a comprehensive
collection of all sales made in the domain
aftermarket in a given week. No one will ever be
able to put together a list of all sales because
the majority of transactions are never reported,
including many of the biggest ones that are often
subject to non-disclosure agreements. However,
there is a lot to learn about the market from the
sales that are reported. Those give us a
large data sample that can |
Image:
phanlop88
/ FreeDigitalPhotos.net |
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help spot trends in
the aftermarket and show people how much specific
names are changing hands for. Even though
every domain name is unique it is helpful to know
what similar domains have sold for so you can get
at least a rough idea of what your own
domains may be worth ("rough" and
"may" are the operative words here as
domain pricing can vary wildly depending on
how badly a particular buyer wants or needs a
domain, how deep their pockets are, how motivated
the seller is, etc. It is a much narrower
market than real world real estate and one
with far greater price fluctuations between
domains that are otherwise similar on the
surface.) |
Thanks to the
co-operation we have received from most of the industry's
major sales venues, we have been able to report tens of
thousands of completed sales over the past eight
years. To keep our weekly reports at a manageable length
and to concentrate on names of reasonably good quality
(though quality is often in the eye of the beholder) we
track only notable sales (.com sales starting at $2,000
and all other extensions starting at $1,000).
Since our data does not
include the lower end of the market the median sales
prices from our database are higher than medians would be
if we tracked the thousands of smaller two and three digit
sales (the median price is the number at which half of all
sales are higher and half are lower). Two of our key data
contributors, Sedo
and the AfternicDLS,
issue their own excellent quarterly sales reports
breaking down all of the public sales from their
venues and their median prices are, of course, lower than
ours since their data includes the low end sales we do not
track.
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Image:
digitalart
/ FreeDigitalPhotos.net |
In
order to compare apples to apples, we track only
cash sales of individual domain names
- not portfolios of names (unless they are individually
priced) and not developed website sales (with
websites it is impossible to know exactly how much
of the price paid is for the domain and how much
is for the other assets, including sales, customer
lists, etc. that a developed site may have). To
chart a sale we also have to know both the
domain name and the price paid as there is
little educational value in one without the
other.
That gives you an
overview of what our sales data covers (and what
it does not), so now let's proceed with a
breakdown of the sales data we collected in the 3rd
quarter of 2011 that ended September 30th.
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Let's start with the total
dollar volume of all sales reported in 3Q-2011. That
figure came in at $25.5 million, a healthy 8.5%
increase over the same quarter a year ago when the
number was $23.5 million. The year over year improvement
is more notable when you look at .com sales only.
The $18 million in .com sales reported in 3Q-2011
represented a 33% jump from the $13.5 million
reported in 3Q-2010.
That rise can be
attributed to a return of some high end sales this
year. In 3Q-2010 not a single seven-figure sale was
reported. However, this year's 3rd quarter benefited from
the $2.6 million sale of Social.com. The
overall total sales volume (for all extensions) in 3Q-2011
also got a nice bump from the year's largest ccTLD sale
to date - Aktien.de ("stocks" in German)
at $725,000.
Still, when you look at
country code sales only, the total dollar volume for
ccTLDs fell from $7 million in 3Q-2010 to $5
million in 3Q-2011. That is partly because three of
2010's six biggest country codes sales came in that one
quarter of the year. Compared to the previous quarter this
year (2Q-2011), 3Q-2011 sales of ccTLDs were up 4.6%.
The
non .com gTLDs continue to lag the
performance of the .coms and ccTLDs. The total
dollar volume in this category was $2.54
million in 3Q-2011, down 15% from the $3
million logged in the same quarter a year ago.
The non .com gTLDs have been under performing
other categories for several years now. Since the
unlimited number of new gTLDs that ICANN
plans to start releasing in 2012 will be non
.com gTLDs you have to wonder how much of a
secondary market there is going to be for those
domains.
While total
dollar volume across all extensions was up
(driven by .com gains), median prices were down
across the board. My guess is this phenomenon
could be attributed to declining PPC revenues
prompting more people to sell domains at more reasonable
prices to make up the shortfall.
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Image:
vichie81
/ FreeDigitalPhotos.net |
Medians are important
because they cancel out the impact a few blockbuster sales
have on total dollar volume or average price figures -
giving a more accurate view of overall market trends. In
3Q-2011 the median price in our universe of sales data
including all extensions was $2,588, down 12%
from the $2,944 median in 3Q-2010.
For .coms only,
the median fell from $3,700 to $3,002 year
over year, an 18% decline. ccTLD medians
were off by a similar percentage, falling 20% to $3,550
(when including only sales of $2,000 an up as we do for
the .coms). Non. com gTLDs also had a double digit
decline in medians, dropping 14% year over year to $3,000
in 3Q-2011.
So, in summary - more $
were spent overall in 3Q-2011 but buyers were getting
names at better median prices than a year ago. It is a mixed
bag but the numbers indicated the market is holding up
pretty well in what continues to be a down general
economy. Anecdotally, we have been hearing about more
sales at the very high end of the market (and even
know what some of those names and prices have been but
cannot report them as they have been subject to NDAs). It
is very encouraging to see a rebound at the high end as
that shows end users continue to recognize the value of
top quality domains to their enterprises.
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