Domain name auction pulls in under $700,000, but mid range domains continue to sell.
Yesterday’s DOMAINfest Global live domain name auction wasn’t pretty. With under $700,000 in domains sold, it may have set a low point for a general Moniker live domain auction. The mood in the room was somber as domain after domain was passed.
But the news wasn’t what was going on in the room, but what was going on outside the room. I ran into a couple people that usually bid heavily in live domain name auctions. They were outside the auction room, sitting on the sidelines. If they were in the auction room, the total would have topped a million dollars. (I expect the total after the silent auction to run into seven figures.)
Here’s what’s happening. People that bought domain names indiscriminately over the past few years are beginning to analyze what they’re doing. For the first time, many companies are having to create things called “budgets” and “business plans”. For the past few years, they could make mistake after mistake and still make money.
I also talked to several people who used to live off of domain parking revenue. Now they are barely covering their business expenses. A year ago they used their PPC revenue to buy domain names; now they are using it to pay their domain renewal fees.
A year or two ago they would have bought domains that have little end user business potential but are one word, such as Reducing.com and Bribes.com.
But I’m not worried. It’s bad news for the folks at Moniker, who have to spend as much time organizing an auction that sells $700,000 as one that sells $10,000,000. But the market will turn around. And sales of “non-speculative” domains, especially those below $10,000, are still robust. Now is a great buying opportunity, if you are smart about it.
Great review and you are spot on Andrew… The one word .com or .nets that have been paid for all this ridiculous amounts — no more!
2009 is shaping up to be very different.
Anything commercial will continue to fetch decent $$$ but this vanity domains that sound cool or “brandable” isn’t on top of the list of ANY domainers…. Whether a professional investor or a newbie.
What good are they?? More than a few hundred bucks… Maybe? But paying thousands of tens of thousands??! I could never make sense of this 🙂
Everyone is a world. I use to spend good amounts of money in auctionas lately. I simply did not see anything appealing, and I am not talking about the price here.
It’s all about natural, type-in traffic. Just because these names are short and .com doesn’t mean they are worth s–t, especially those ending in -ing.
If you don’t have a name with traffic then you’re not a domainer, you’re a developer.
I agree with Francois….I just don’t see the domains that get me excited like I used to.
David J Castello says
Even in this recession, great dotComs will easily command upwards of seven figures (Fly.com just sold for $1.8 million – cash). The question I always ask when I see a sale is, “OK, what are going to do with it?” If they have a solid vision to develop the name will likely be worth it. If they are spending big bucks just to flip or park they might as well take their money to Vegas.
Rob Sequin says
I have been selling to end users for $750 to $5000 for myself and clients.
End users are looking for their next customers and they will come from the internet not the yellow pages or a bigger display ad in the newspaper.
Develop or sell to end users. I think that’s the call for 2009 since speculation and domainer to domainer sales are so 2007. 🙂
I agree, Andrew. That’s a spot-on assessment.
But Top.com sold for what – over 350 K Euros on Sedo and Dollars.com is also in that range or more on Sedo
Actually I see some great names in the extended auction – some good mid-level dotcoms and some excellent dotme names below 10 K — as well as some good .org — I believe the extended auction will have better results.
I agree with Andrew, but I also agree with Francois.
Even though the list didn’t really do it for me, there were some names that I figured would sell that didn’t.
I do nto disagree with anything Andrew is saying, but a few things that did come to mind when reading about this topic were. 1) DomainFest In Hollywood was labeled and geared towards the newer domainers and domain industry introduction. 2) Bad and Uncertain Economy 3) Distracted minds bc of Playboy Mansion Party 😛
Domainers might have tighten their budgets but end-user sales are ever-expanding. Don’t believe the hype that the sky is falling cultivated by some circles that simply own over-bloated portfolios (or simply have crappy domains). Generic domains in the original 3 TLDs will always be a solid commodity to trade. The late-comers sing the sour grapes song when they can’t open their wallets.
Stephen Douglas says
Hey Double A, (great seeing you again)
Good points… all on target.
However, some of the comments here, save Acro’s, are misguided. There were some good buys, just based on the fact that I got one myself. heh heh.
Rob’s comments are spot on, I’m doing the same with my clients’ and my domains from $200 – $20,000, sold to end users. I know of other associates who are cold-calling endusers and flipping domains in the $25k range and doubling their investment. Just buy smart and spend more time in your underwear making phone calls.
To DCMike77: a domain also gets traffic from proper “development,” and domainers are people who invest in domains, developed or parked. If I bought 1000 domains and put content on them to make money from organic search traffic, I’m still a domainer, not a “developer”. (see Whypark, Evo Landing, AEIOU)
****Heard at the Playboy Mansion with my own ears*****
“Come on, Andrew, take a picture with us, you’re famous!”
Nobody said that to me. *tears streaming down face*
&^E^#!! YOU, ANDREW!!! 😉
You are good enough, smart enough, and gosh darn it, people like you! (from SNL)
Keep doing what you do, and for goodness sakes, get back in the water.
Stephen Douglas says
I bet Sarah made you write that. Hi Sarah!
Thanks for info.
If domainers don’t make profit with parking, it means that the industry has no added value.
Plus, you confirmed the other day what I suspected, the buyers to be mostly domainers.
As a conclusion, (1) they don’t have profit with parking, and (2) no significant profit selling outside the domainer mob.
I am afraid this industry may have some problem in the future.
This is confirmed by what I read on many domainer blogs or media, the domain and business development to be the only issue to make profit. I agree, at the end, successful domainers will be the rare business developers.
What a joke!
Let me say this again, the only place that domains are not selling well are within the
“domainer to domainer” category.
Yes, the endusers are negotiating more for a better price but they are willing to buy.
The biggest problem domainers have is making it easy for endusers to buy a domain with confidence. They are not sure about the correct price, is the seller honorable, etc.
Most endusers don’t understand our negotiation process (if they contact us directly).
I haven’t used it but I think Fabulous selling process might be more popular in the future.
“Here is the lowest price”
“Here is your domain”.
Dave C says
Perhaps, ot also was an issue of domain quality? At T.R.A.F.F.I.C. New York, Moniker auctioned FinancialAid.com for $480K; and FinancialAide.com for $320K; I had submitted the following lesser-but-somewhat-related domains for this past week’s auction, all at less than $10K Reserve, but Moniker selected none of them, not even for their silent auction:
Dave, you are a great domain flipper! See FinancialAid.com sell for $480k, register on 10/6/2008 some great domains at Godaddy.com for $8, and sell it a few weeks later for $10k.
I have to agree with Bernard about the “Financial Aid” domains.
Just because XYZ.com might be worth $ 100K.
(hypothetical), does not mean that XYZAB.com should be worth $ 1K.
XYZAB.com might not be worth $ 8.
Andrew Allemann says
@ Dave – none of those domains belong in the live auction.
Yes you’re right names under 10k semes be whats selling now.
Good to see .ME again did god compare to the others on the auction.
Stephen Douglas says
@Dave C – Your domains are great for content buildout for organic search, but they aren’t auction material. However, don’t fret. The domain appraisal game is a strange bird.
FYI: A high-selling phrase domain does not constitute another domain value that uses that phrase with another “noun” suffix, where you’re using the high-selling phrase as an “adjective”.
“Expert Help” is an adjective/noun. If common generic terms that make sense are used, then the phrase domain is a great brand domain for a company’s prodserv.
“Expert Help Express” is an adjective/adjective/noun. Two adjectives together in a domain creates an unwieldy longtail domain.
Turning the original valuable phrase (as an adjective/noun) into a double-adjective-noun domain adds more characters (diminishing its branding value), and dilutes the strength of the core phrase “Expert Help”.
Any dilution of a core phrase domain by turning it into an adjective to support an added noun will lessen its value exponentially based on character length and meaning. So an adjective/noun phrase domain worth $480k that is used with an additional word that turns the original phrase into an double adjective will most likely give you a very limited value domain.