A preview of this Saturday’s domain name auction.

Aftermarket.com, a Thought Convergence company, is holding a live domain name auction Saturday at Domainer Mardi Gras in New Orleans. The auction is already open for bidding online.

The company put some unique twists on this auction. There will only be 50 domains, and every domain that sells for over $5,000 will be eligible for no interest financing for 6 months. It’s a neat idea, but we’ll see if it spurs any additional sales. People who are low on cash now probably don’t think they’ll have more to spend in 6 months.

Given the lackluster results of last month’s DOMAINfest auction and the continually deteriorating economy, any live auction held right now faces a tough slog. I decided to go through the list of domains one by one and select which ones would sell. It was tough, since about half of them are on the bubble, but I decided to make a gut call on them anyway. I’m going to share some of my selections today, and will share the rest after the auction. I selected 29 to sell and 22 that won’t sell, or a 57% sell through rate.

Sell:
Just about all of the no reserve domains
DCW.com
TextLinks.com – going on a limb at $22,000, but companies that sell text links should be all over this
TicketBooth.com

Won’t Sell:
CandyCane.com – It would sell as the plural, but single is a hard one
TheFrenchQuarter.com – I realize people often put “the” before this, but I’d still prefer FrenchQuarter.com
Favorites.com – High price for this economy
CustomSites.com – outside the domain world, aren’t all web sites custom?
GolfSet.com

Here are some observations and a recap after one day in New Orleans for Domainer Mardi Gras.

First, some observations:

It’s deliciously ironic to hold a risk management-focused conference during Mardi Gras…

Never eat a funnel cake covered in powdered sugar when wearing a black shirt…

Having portable toilets every block or so during a drunken festival is a good idea…

People wearing masks are scary when you’ve been drinking…

It’s hard to hold a drink and catch beads at the same time…

Domainer Mardi Gras kicked off last night with a welcome cocktail in the exhibit hall. After throwing back a couple drinks, party conference goers walked or took the shuttle bus to the crawfish boil. The crawfish boil seemed like a family affair, and then you realized it really was a family affair. It was held in a three story 1840s house owned by Parked.com’s founders, and lots of family was on hand. Thankfully for me, there was more than just crawfish there: fried chicken, meatballs, pasta, you name it.

During the crawfish boil Mardi Gras historian Arthur Hardy gave a preview of the festival, and then a New Orleans police officer gave guidance for safety and staying out of jail: wallets in the front pocket, no jewelry (someone should tell Ammar), stay fully clothed from the waste down. The house was just a couple blocks from a parade route, so people walked back and forth between the parade and house.

Minimum bids, asset purchase agreement, and 10% deposit required by February 25.

In the continuing saga of Toys.com, a new auction will be held February 27. The domain name was originally won at a bankruptcy auction earlier this month for $1.25M by Faculty Lounge Partners. However, another party indicated it may be willing to pay more for the domain name.

Faculty Lounge, of which domain name lawyer Ari Goldberger is a partner, will be the stalking horse bidder for the auction. If Faculty Lounge does not win the domain in the new auction, it will be paid a break up fee of approximately 3% of the sale price in addition to its legal fees.

New bidders will have to top $1.25M plus the stalking horse fees, so I estimate the minimum price would be about $1.35M. To participate in the February 27 auction bidders will need to submit an initial bid and 10% deposit by February 25. That means a typical deposit will be about $135,000. As of the time of writing, no formal bids have been received, but creating an asset purchase agreement generally requires substantial legal work.

Two sales from the original domain name auction have been completed: eToys.com and related domain names to Toys ‘R’ Us, and Birthdays.com and related domain names to DONE! Ventures.

NameMedia provides data on the SMB end user market for domain names.

Earlier this month I reported that the median sales price for domain names at Sedo last year was $500. I pointed out that this number represents a mix between end user sales and investor sales.

If you’re looking for a better number for the small and medium business end user market, look no further. NameMedia, which focuses on the SMB end user market through BuyDomains and other market channels, provided data to me showing a median price of $1,200 for 2008.

NameMedia focuses on domain names in the $1,000-$5,000 range, which it feels comfortable it can sell to business owners. Given that businesses typically use domain names for at least five years, NameMedia is suggesting making an investment of $200-$1,000 per year for a better domain name.

NameMedia Senior Vice President and General Manager Peter Lamson told me this number is holding steady, and sales in the first quarter of 2009 are still running at a $1,200 median price.

The company sells domain names through its BuyDomains and Afternic sites, as well as through listing arrangements with domain name registrars such as GoDaddy. It advertises in a variety of end user publications and web sites, and offers seminars (some of which aren’t directly related to domains) to SMBs. I know of no other company that targets this market better, and the company racks up millions of dollars worth of sales to this market each month, typically $1,200 or so at a time. In other words, this number is a fairly accurate picture of the market.

Domain owners can list their domains on BuyDomains, Afternic, and several other NameMedia partners by choosing the “expanded promotion” option when listing domains at Afternic.com.

New domain industry event kicks off this evening.

I’m off to New Orleans for Domainer Mardi Gras, a new domain industry event organized by Modern Domainer Magazine.

Thursday night’s festivities include a cocktail reception and crawfish boil. Too bad I don’t eat seafood.

I’m giving two presentations. First, I’ll provide some of the results from the 2009 Domain Name Wire survey during lunch on Friday. Ron Jackson will be giving a sales update during the same lunch before I speak. Later Friday afternoon I’ll be on a panel about offshoring, where I’ll question the logic of trying to escape the United States jurisdiction, and the challenges you face when doing so.

The event should be a slower pace than last month’s DOMAINfest. There’s lots of social time, and I estimate about 200 people will be there. The smaller crowd will be welcome for me, as it gives me a better chance to meet people at the show without having to seek them out.

If you want to attend and can make the last minute trip, registration is still available for $895. Note that the hotel is sold out.

Stay tuned to Domain Name Wire for updates from the conference.