These days you read about high dollar domain name sales every week. The number of 5- and 6-figure domain name sales continues to grow. Although most of this is due to the growing recognition of the value of domain names, another factor is the fall of the U.S. dollar while the Euro and Pound Sterling gain purchasing power.
Take some recent sales for example. Mind you, I don’t know which country the purchasers lived in. But consider that someone living in a Euro region purchased these domains from someone in the U.S.
GED.com: This domain sold on Sedo for US $150,000 in January 2005. This represented a â‚¬114,000 investment at January’s exchange rates. If the same purchase was made five years prior, it would have cost â‚¬146,000! That means the domain cost was “28% cheaper” to someone in a Euro territory this January versus five years ago.
Arab.com: Arab.com exchanged hands for US $225,000 in August 2004. This was â‚¬185,000 at the time. But in August 1999 it would have cost â‚¬213,000, or 15% more.
The opposite is true for U.S. domain buyers. If they buy domains in Euros, they are now roughly 40% more expensive than five years ago, assuming no changes in underlying domain value.
How much does this affect domain name sales? It’s the same idea as United States citizens taking a vacation. Fewer people are willing to travel from the U.S. to Europe right now because of the low dollar. When the dollar is high people flock to Europe to take advantage of the cheap Euro. I don’t know of any exact studies about exchange rates and domain name prices. But I would personally buy a lot more domains from Europeans right now if the “real” price to me in U.S. dollars was lower.