3Q-2011 Domain Sales A Mixed Bag: Total Dollar Volume Rises From a Year Ago But Median Prices Slip

3Q-2011 Domain Sales A Mixed Bag: Total Dollar Volume Rises From a Year Ago But Median Prices Slip 

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.

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 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.

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.

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. 

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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Proposed New Law Would Make "Rights Holders" Judge, Jury and Executioner With Website Owners in Their Crosshairs

Proposed  New Law Would Make "Rights Holders" Judge, Jury and Executioner With Website Owners in Their Crosshairs

ICA Legal Counsel Phil Corwin posted some news on the Internet Commerce Association's website Thursday that should make the hair on the back of your neck stand up. Some proposed new legislation (called the “E-PARASITE Act” - an acronym for ‘‘Enforcing and Protecting American Rights Against Sites Intent on Theft and Exploitation Act’’) is being considered in the U.S. House of Representatives that would put domain and website owners at the complete mercy of "rights holders."
Corwin, who is based in Washington, D.C. where he keeps an eye on all legislative matters that may impact domain owners, wrote this about the 79-page House proposal: "It would require payment providers and ad networks to terminate their services to a website upon mere receipt of a letter from a rights holder alleging that the website was one “dedicated to theft of U.S. property”.

 

ICA Legal Counsel Phil Corwin

So much for due process! Corwin noted, "Any domain registrant who has ever received an aggressive and unsupported cease-and-desist letter from a trademark attorney has got to be concerned by the prospect of having a domain’s ad and payment services shut down absent any court review. The bill would provide the website owner with the ability to seek after-the-fact judicial lifting of the ad and payment suspension – but this expensive and uncertain option would occur during a period when the website had been deprived of all income! Overall, this approach creates major due process concerns and clearly tips the balance against domain registrants and in favor of rights holders."

I would urge you to read Corwin's post that has all of the details about this ill-conceived idea and follow his recommendation that you immediately contact your Representative to alert them that the House Judiciary Committee will reportedly hold a hearing on the proposal on November 16th, 2011 with the intention of holding a “markup” to report it out of Committee shortly thereafter.

Corwin said that U.S. domain investors and developers should, at a minimum, request that the Judiciary Committee hold multiple balanced hearings to explore all the aspects of this complex and controversial proposal before proceeding to any votes.

A complete list of members of the House Judiciary Committee can be found at http://judiciary.house.gov/about/members.html.

One other note today. The ICM Registry has extended the .xxx Sunrise registration periods (that were originally scheduled to end today) for an additional three days. That means that rights holders will have an opportunity to secure their domains and protect their brands up to the new deadline which is Monday, October 31, 2011 at 16:00 UTC (Noon U.S. Eastern time).


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42nd International ICANN Meeting Opens Sunday in Senegal - ICA's Phil Corwin Among Those to Attend

42nd International ICANN Meeting Opens Sunday in Senegal - ICA's Phil Corwin Among Those to Attend



The 42nd International ICANN Meeting gets underway Sunday (Oct. 23, 2011) in Dakar, Senegal where the conference will continue through Friday (Oct. 28). The introduction of new gTLDs in 2012 will be one of the main issues discussed at this meeting. ICANN plans to start accepting applications for new TLDs on January 12, 2012, with the application window remaining open until April 12, 2012.  

Rod Beckstrom, ICANN’s President and Chief Executive Officer will join

Board Chair Dr
. 

Stephen Crocker at  a news conference Monday to discuss the status of the new gTLD program in depth. The two ICANN leaders will also answer questions on other subjects, ranging from IPv6 implementation to DNSSEC adoption.

 

 

Internet Commerce Association (ICA) Legal Counsel Phil Corwin will be in Senegal to monitor any developments that might impact the rights and interests of domain name registrants and investors.

Corwin headed off to Dakar soon after attending a  Verisign “Building a better Internet” Symposium that was held in Washington, D.C. this past Tuesday (Oct. 18). The invitation only event brought approximately 125 Internet industry and technical leaders together to plan for challenges ahead, including fortifying the internet's infrastructure to accommodate the next billion users.

Attendees included top Verisign executives, ICANN management, government staff (from the Department of Commerce, FBI and Congress), lobbyists, IP lawyers, academia, think tanks and other internet stakeholders. They heard from a variety of experts including ICANN Chairman Dr. Stephen Crocker and Wired Magazine Editor Chris Anderson.

ICA Legal Counsel Phil Corwin at a
Verisign Symposium in Washington, D.C.
Tuesday (October 18, 2011)
Photo courtesy of Richard Meyer



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