Domain Name Wire

Domain Name Wire

  • Observations from Moniker’s Live Auction

    1. BY - Feb 08, 2011
    2. Domain Sales
    3. 8 Comments

    Why sales were low and what it says about the current state of domain name auctions.

    Moniker’s live auctions (low & no reserve and premium) last week sold just over $400,000 of domain names. The top seller was Won.com at $115,000.

    This is obviously a low number. I have two observations from the results:

    1. A lot of these domains would have sold for much more back in 2007. Check these out:

    TrafficJam.com $11,500
    OfficePark.com $6,000
    Exhausted.com $2,000

    All three of these would have sold for a few times more back in that fateful 2007 NYC auction.

    But alas, it’s now 2011.

    2. High prices = few bidders = marketing event

    There were some good domains in this auction, but none of the biggies looked like deals. I didn’t see a single one that I thought would prompt a bidding war.

    During a breakfast with the media on Wednesday, Oversee.net CEO Jeff Kupietzky said that auctions are becoming more like marketing events. They get exposure for big names that then sell after the auction.

    For the auction house this is fine, but it’s a self-perpetuating cycle. If you’re interested in a domain name it doesn’t make sense to bid for it at the auction unless someone else is also bidding. You’re better off waiting until after the auction to negotiate a better deal. Unless you have to have the domain name — in which case you should buy it ahead of time.

    The extended silent auction runs through February 17.

8 Comments
  • The only way you get big prices for prime names is by getting the relevant end users to participate, and that doesn’t happen at a domain conference. Names like InsuranceQuote.com should be sold to somebody in the insurance industry or somebody with lots of experience and expertise in the field. Those people are not at the conference. Until the right end users attend these auctions, they will continue to always result in a letdown.

  • Read an article about it yesterday that sales where low at the live auction.

    But then i read an article today about Sedo.
    http://www.smeweb.com/content/view/2468/119/

    As you said it’s 2011 and we just have to go with it and make something out of it ;)

  • While .com sales are languishing, ccTLD’s are a-rockin – these sales are from last week (From DNJournal):

    Soc.io sold for $2500 – site is up.
    Jamaica.nl sold for $12,455 – site is up.
    Work.io sold for $4,500
    TechZone.in sold for $3,975
    LuxuryEstate.it sold for $2,740

    What’s my point? If the above, obscure ccTLD’s are selling at these prices, .co will do very well considering the marketing dollars behind it and it is time for forward-thinking-domainers to begin looking beyond .com for a solid ROI.

    - TBC

  • the market involving depressed domain prices is not the only market depressed/subdude.
    1.home prices down 60% in las vegas.
    2. interest on savings deposits under 3%
    3.oil prices down from 150 a barrel
    4.over 2 trillion dollars sitting on corps sidelines.
    5. there is little demand for anything and nobody is going to spend a buck unless they have to.
    6. however this is changing very slowly as money seeks higher yields.

  • “Oversee.net CEO Jeff Kupietzky said that auctions are becoming more like marketing events. They get exposure for big names that then sell after the auction.”

    //////////////

    Beginning of the end for live domain auctions in my view if that is how they are thinking. Most of these events haven’t done anything to adapt to the times and get domains that are actually likely to sell. If they are getting 15% sell through rates and running auctions unprofitably then eventually the plug will get pulled.

    I suspect the whole live auction model is probably flawed in the current marketplace in terms of being a high cost model, hiring staff etc to do something that could be done online. They only reason it ever work as compared to just have an online auction is that it was a spectacle, and these live auctions are no longer spectacles, most seem to see them as boring non events.

  • I agree with Jeff Edelman. The promoters of these auctions have totally relied on domainers and left out the most important ingredient, the end user. It is easier for the promoters to tell domainers and a lot more work and expense to get the end users to attend an auction but if they had done the work in past shows to get the end users to the events they probably would have doubled their auction profits.

  • It is true that Domain live auctions are not what they used to be and that they changed to become marketing events. The live auctions have become a key part of the process to showcase, market, and sell names to end users. The market has shifted to end users in the last couple of years. 2010 was a great year for domain sales and many or most of the biggest sales in 2010 were not sold in a live auctions as in years past, but many appeared in a live auction previously. The aftermarket is not slowing down it is changing and growing. We put on the live auctions to lock up the best names, market them to domainers, and end users, knowing that the big ticket names are mainly being purchased by end users these days, and in most cases are purchased before or after the auction depending on pricing and buyer due dilegence. The auction allows great names to be showcased to the domain community and marketed to end users by the moniker brokers, our broker partners, and independent brokers. Names that are priced realistically by sellers will get sold to both domainers and end users in the live auction. However the days of only domainers getting into bidding wars in the Live auction on a name priced above 6 figures have slowed down a lot. The last 2 publicly reported sales of 7 figure names in a live auction at a domain conference was Dating.com (2010) and AD.com (2009). Looking at the DN Journal largest sales of 2010. ..8 of the Top 20 Domains that were sold and reported were sold by Moniker, and all 10 of the top sales overall on the DN Journal list were sold to end users. In addition the DN Journal results are not reporting all the top sales, for example Tshirts.com sold for 1.3 Million the day before a live auction to and end user at 2 1/2 times the reserve (The sale included T-shirts, so is considered a portfolio) and many of the other 6 figure and 7 figure sales of Live auction names we completed or are in the process of completing are not reported because they have to kept private, but were sold shoafter the auctions. While every one of the Top 10 sales of 2010 was sold to an end user, this was not the case in previous years when parking companies or domainers were buying 7 figure names. Out of the 8 largest sales by Moniker/Snapnames only Dating.com (1.75M) was sold in the live auction- and it was sold to an end user, the next largest sale of a live auction name Zip.com( 1.1M) was sold in the Extended auction-also to an end user. There is also the issue of many sellers overpricing their names in the live auction and then lowering the reserves to where we originally recommended after the live event, when we have legitimate offers in the range we previously recommended. This is a common mistake, and will often cause the domain to sell for less privately then we could have gotten if the price was fair enough to cause a bidding war in the live auction. End users generally will refrain from bidding and stay on the sidelines in a live auction if no one is bidding against them.

    The Low and NO reserve auction at Domain fest produced a 59% sell through. The Low and no reserve auction is more geared to the domainer only crowd, but the live auctions are still the events that generate the most sales overall from a dollar value standpoint. Yes we could have had better results in the live auction by negotiating lower reserves on high quality 4, and 5 figure names, and we will be more getting much more selective going forward, however we expect that this auction like all our other past domainfest events will still likely generate many additional sales in the extended auction both to domainers, and end users, and in private sales – negotiated by our brokers with end users, after the auction. We were very close in the live auction on a few of names that could have gotten us to the 1 Million mark or above and I know these and others will be sold.

    So the bottom line is while the market has shifted, the aftermarket is strong and all sales of premium names are very good for the entire industry whether sold before, during, or after a live auction event.

  • Victor Pitts says:

    February 9, 2011 at 10:44 am

    I think the current application of the live auction model is flawed, but live auctions in themselves are a valuable. Auctions are the most efficient way to reach the top price of a domain “when you have competition for a domain”. If there is no competition, then it is a bad solution for selling.

    The problem with live auction companies today, happens before the auction, as oppose to anything being done wrong at the event. To build competitive interest in premium domain names takes months of research, promotions, communications, and negotiations. Ideally at the end you have many bidders. In today’s application of live auctions, selection of inventory is too close to the time of the auction for the auction company broker’s to identify buyers, access and communicate with those buyers, build trust with the buyer, and pitch the values of the domains with sufficient coverage to get enough buyers to the auction to create lively bidding action.

    Perhaps the live auction companies should package what they do best, and let individuals, as well as brokers/brokerage companies buy slots in the live auctions, and then bring bidders with them to the event (live or online) to settle who gets the names. I believe that model would provide value to all stakeholders.

    Buyers can gauge true market value in an open environment vs. behind closed doors. The lack of trust and openness is a large part of the unwillingness of Wall Street and Main Street from paying premium prices on domain names.

    It benefits brokers as they can both pitch the domains and the event, while the auction house and competition alike are also promoting the event. This increases buy-in for all, drives traffic, and stacks the deck for lively bidding. It is a more time and resource efficient way of dealing with the sales process when there are multiple buyers involved. This can consume a lot of a brokers time.

    It benefits the auction company in they get a piece of the action on higher volume business, as oppose to higher percentage on lower volume. I think the math would work out on the plus for them, and being able to focus on your core competency – priceless. They could also use a portion of the live auction slots to sell their direct client’s assets, so the solution is not mutually exclusive.

    All sellers would benefit because the market for selling domains would be more efficient and transparent. Prices should increase as transparency and efficiency would bring more confidence in the process, which would foster growth and acceptance of domain value to a larger audience. This increases demand for domains, which according to basic economic theory will cause the price of domains to increase.

    Whew! Git er done!

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