There’s a good reason to be skeptical of a $2 million banana.com domain sale.
Last month there was a bit of a stir in the domain name industry about the Chinese buying one word English domain names for huge sums.
A domain name auction in China resulted in 5 domain name “sales” of $2 million or more USD: Banana.com, House.com, Yao.com, GG.com and HG.com.
While GG.com and HG.com might seem plausible, $2 million for banana.com seemed like a ridiculously high price. Some were skeptical. As it turns out, rightfully so.
At NamesCon this week, I talked to several people about the auction. As it turns out, either the seller or buyer could back out of the sale by paying only a small fee.
The original story about the Chinese auction on Domain.cn notes (translated via Google Translate): “Disclaimer: paper prices are auction price (for reference only), the actual transaction price mainly to buyers and sellers.”
So either party can walk away. And even if a transaction is completed, it’s not necessarily at the auction price. As of today, none of the domain names listed above have been transferred.
Think about what would have happened at this week’s NamesCon auction if either party could simply walk away from the deal. We would have seen a lot of high bids, particularly in certain segments, just to push the market up or to reserve a domain for potential purchase.
I’ve seen numerous cases of people and sites reporting sales that didn’t happen, or didn’t happen for the stated price. Once these sales are reported, it’s difficult to stop misinformation from spreading.