NEW YORK, NY – Some companies reap high returns by investing heavily in a declining industry. Others sell out before competitors recognized the decline. Based on some numbers I posted yesterday, there’s no wonder it sparked some chatter back and forth on NamePros.com on whether the overall sales numbers are up or down (when compared to the entire list) or what’s causing the decline, or if the decline is even accurate when viewing the entire years data (not just the top 100).
Most of my lists include the top 100 domain transactions which have taken place at NameBio.com. This gives me (and you) a basic idea of what’s selling and for how much in addition to which venues are looking good as sales platforms.
This time, I wanted to get a hold of the information on all recorded sales, not just the top 100 within the years being measured. To my surprise, NameBio has year to year totals listed in order on this page where each year’s sales are listed in their entirety (right side of page – no export though – I wish). Thanks to NameBio.com CTO Michael Sumner for helping me find my way to these records on their site. (Such a great website for all domainers)
According to this information:
- In the entire year of 2016 there were 84,899 domain sales recorded which totaled $117,515,765.00
- In the entire year of 2015 there were 83,328 domain sales recorded which totaled $168,817,385.00
So in 2016, although there was a small increase in the volume of domain sales over 2015, (1.87% percent more), there was a significant decline in the value of all of these transactions (35.83% less value).
I usually only look at the top 100 transactions of a calendar year, which looking at those indicated a 35% Decline when compared to the year before 2015.
So, this does indeed look RIGHT ON THE MONEY.
Taking a look at the entire years, not just their 100 largest sales, but the entire two years 168,227 total transactions; it’s right on the money, with an overall decline of 35.83%.
2016 indeed processed more reported domain sales then the year before, but for less money.
If I had to take a guess at what is causing the decline I would have to say it is gTLDs; I think a great deal of investment dollars are moving over to gTLDs — even if it is a waste of money (which many will say); dollars are certainly moving in that direction. Others will say it is due to the exit of the Chinese market, but admittedly, I just don’t know enough about that market to comment on it, so I will have to sit with gTLDs causing a diversification of investment.
Another interesting note is that there has been a number of domain portfolios for sale recently by some very educated and experienced domain holders. Any correlation? As Rick Schwartz would say; Trust Numbers Not People.
About The Author: John Colascione is Chief Executive Officer of Searchen Networks Inc. and Internet Advertising Inc. He specializes in Website Monetization, authored a ‘how to’ book called ‘‘Mastering Your Website’, and is a key player in several Internet related businesses through his search engine strategy company Searchen Networks®
There are a lot more domain names now in the marketplace. I just turned down $90k on a name but I also own some of the best names in .com. The need for these kinds of names will always be there. I see some decline in the price offers but I think that has more to do about the overall perception and uncertainty of the domain industry and this juncture. I am certain about my type of portfolio but there are many that have invested in alternative domain names that are looking risky as investments at this moment. I think people would be more correct in their vision of domain names as an investment if they were viewed as precious metals. As an example:
% of / Precious Metal
Hotels /.com = 9999.99 % Gold
London/ .com = 9999.99 % Gold
Ring/ .com = 95 % Gold
SantaMonicaDoctor/ .com = 50% Gold
ThisIsABadName/ .com = 0% Gold
Care/.org = 95% Sliver
Spike/ .tv = 90% Paladium
Golf/ .club = 99% Copper
I am just referring to how I see domain names and their extensions. Not all .com are pure gold. Not all extensions are gold, but .com. You yourself can decide which is Silver, Palladium, Copper, Tin, etc.
Many metals are used for different things which makes them needed and attractive. Too much sand, or water makes them worthless unless they are needed in unique situations. Like needing water in a hot sandy desert. Then, water is priceless.
I very much like the analogy of .com as gold and .org as silver as in most cases this would be accurate. But of course you would have instances where this could be vice versa or where a domain could be either worthless or priceless depending on the need, keyword, or lack of any meaningful keywords.
Think it is mainly due to Chinese interest being on the wane. Both sets of numbers would include ntlds but their sales levels are low anyway.
@Snoopy,
You’re right, I expect. During 2015, the Chinese surge caused prices to rise drastically. As prices fell within those categories during 2016, that’s going to cause a decline in total market sales, since China was a big chunk of the whole market.
Possibly trading frequency was higher too during 2015, since investors were enthusiastically grabbing and flipping assets “on the way up”. We didn’t see a hurried, panicky selloff during 2016. It was more like a balloon slowly deflating. So I’m guessing – can’t prove this without data – that trading frequency slowed down during 2016, as investors clutched their assets, hoping for a market rebound or fearing that a faster selloff would cause an avalanche.
During 2015, the same CHIP LLLL.com might sell multiple times. (I saw some sell 7+ times within a year.) So these sales were more likely to be reported in the total sales volume for 2015. Trading frequency could be a significant factor, though I can’t quantify how significant off the top of my head.
We should also be cautious when drawing this conclusion:
“2016 indeed processed more reported domain sales then the year before, but for less money.”
It’s true that NameBio tracked more sales in 2016 than in 2015. But they never have access to 100% of market sales data. Over time, they might add more sources of sales data, allowing them to report a greater percentage of the whole.. So an increase in reported data on their site doesn’t necessarily imply an increase in sales for the overall market.
Good article. Noticing it a year late. But many people do. Information has a longer shelf life than milk & eggs.
2015 numbers were heavily impacted by a Chinese bubble in name investing. Overall market is fine but prices are probably a bit softer due to increased supply. Along the same vein of the previous commentators if you only have gold and silver on your planet, and then suddenly a bunch of copper shows up out of nowhere (and copper turns out to be a fine conductor), it will have “some” effect on the price of gold and people’s perception of the value of gold. All that will stabilize in the end because inquiries and demand for names overall are very strong.