Where did China go? We’ve grown accustomed to seeing China claim around 40% of the top 20 sales; and Chinese-style domains usually rank very high in these charts – #2 last week, #1 the week before, etc. stretching far back into 2014. This time, however, none of the top 16 results are Chinese – none.
Why? Human error is 1 explanation. My sampling at NameJet is never 100% complete. But that limitation affects all my weekly reports, and I would expect spotty data collection to cause under-reporting of Chinese and Western domains equally.
Let’s assume this is real, then. What’s up? Keep in mind, these charts report only expired auctions. That’s key. Here is my hypothesis: Valuable LLLL.com and numerical domains are no longer permitted to reach expired auctions. Or else they now expire at Chinese registrars whose inventory doesn’t feed into NameJet. In other words, the river runs dry because a dam was built upstream.
Domainers like to intercept quality domains before they reach competitive auctions – to “scoop” them. Between automated bulk email and auction bidding, Chinese buyers have run through several expiration cycles. Recently, they drew the last dribbling drops from the keg, which we now find suddenly empty.
Thus, Chinese market demand hasn’t gone away. But the more valuable inventory has been diverted from the expiration cycle. So within these charts, reportable Chinese spending has abruptly ratcheted down to less valuable categories, as you can see below. That’s the hypothesis anyway. You can tell me if I’m right or wrong.
| Domain | End $ | At | Domain | End $ | At |
|---|---|---|---|---|---|
| MoveIn.com | 12,700 | NJ | InStat.com | 11,300 | NJ |
| Arnett.com | 7580 | NJ | TenByTen.org | 4701 | NJ |
| Philibert.com | 3076 | NJ | Espectaculo.com | 2700 | NJ |
| BeautyTherapy.com | 2601 | NJ | PicGroup.com | 2560 | NJ |
| TarryTown Homes.com |
2500 | NJ | Onigiri.com | 2057 | NJ |
| MUSE.net | 2010 | NJ | Stegmann.com | 1845 | NJ |
| 986789.com | 1800 | NJ | Pluto.net | 1705 | NJ |
| Tucoff.com | 1645 | NJ | LeonBerger.com | 1600 | NJ |
MoveIn.com ($12.7k) sounds like a great brand name for movers, new housing developments, or mortgages. Arnett.com ($7.6k) is a surname but also the name of a hospital. Meanwhile, the first name Philibert.com ($3.1k) has branded both a security company and a French shop specializing in board games. Another surname, Stegmann.com ($1.8k), matches a shoe brand – clogs, actually.
Espectaculo.com ($2.7k) is a “show” in Spanish. But it doesn’t just apply to musical theater or the circus; it also means an amazing sight – say, the pyramids. In English you can hear the overtones of “spectacle”, “spectator”, and “spectacular”. If you caused a scene and made a spectacle of yourself, throwing a fit because the waiter brought you the wrong soup, then tu hiciste un espectaculo.
Onigiri.com ($2.1k) is a triangular rice-based dish from Japan. If you’re curious about TenByTen.org ($4.7k), here’s what it used to be. (Easier seen than explained.) In my opinion, both MUSE.net ($2.0k) and Pluto.net ($1.7k) are strong enough brand names to carry the day in .NET – no .COM required. And VOW.org ($1.2k) is perfectly suited to .ORG.
| Domain | End $ | At | Domain | End $ | At |
|---|---|---|---|---|---|
| JingQing.com | 1505 | NJ | Honza.com | 1445 | NJ |
| GrandCenter.com | 1311 | NJ | eCulture.com | 1220 | NJ |
| 01269.com | 1220 | NJ | VOW.org | 1209 | NJ |
| BlackDirt.com | 1200 | NJ | 3888388.com | 1161 | SN |
| ProcessDesign.com | 1112 | NJ | TheFonts.com | 1112 | NJ |
| 01219.com | 1104 | NJ | MFPA.com | 901 | NJ |
| BodyAlarm.com | 790 | NJ | OTCS.com | 720 | NJ |
| ToyParty.com | 711 | NJ | CircusWeb.com | 688 | NJ |
China is not entirely absent. The “jing” in JingQing.com ($1.5k) may be an abbreviation of Beijing. Meanwhile “qing” could mean anything from “youth” (青) to “pure” (清). “Beijing Youth” would make sense to me, but I’ll defer to Chinese speakers. A pair of 5-digit numerics as well as a 7-digit domain placed above $1k, which sounds impressive; but 2 weeks ago I counted 11 of these not 3.
BlackDirt.com ($1.2k) refers to a region of New York and New Jersey whose soil has inspired the name of a local distillery. But I’ve also found a “Black Dirt” theater and top-soil distributor – both located in Minnesota.
| Domain | End $ | At | Domain | End $ | At |
|---|---|---|---|---|---|
| ThomasPaine.com | 657 | NJ | TheScript Library.com |
640 | NJ |
| HandyBits.com | 630 | NJ | TheTruth Hurts.com |
611 | NJ |
| ScottWhite.com | 610 | NJ | TrailDust.com | 589 | NJ |
| OutStream.com | 581 | NJ | J1B.com | 569 | NJ |
| MIKD.com | 552 | SN | 933799.com | 540 | NJ |
| LeadRetrieval.com | 531 | NJ | FSCK.net | 530 | NJ |
| ICO2N.com | 526 | SN | DDUniverse.net | 522 | NJ |
| E0V.com | 511 | NJ | Smart Cartridge.com |
510 | NJ |
| Retail Automation.com |
510 | NJ | Stop Corrosion.com |
498 | NJ |
| ScreenMaker.com | 498 | NJ | Mejores Precios.com |
495 | NJ |
| Slimina.com | 441 | SN | MVCD.org | 400 | NJ |
| DustyBaker.com | 398 | NJ | VDHT.com | 381 | NJ |
| 188268.com | 380 | NJ | IBNSHome Page.org |
380 | NJ |
ThomasPaine.com ($657) is a name that means less than it ought to inside the USA and probably nothing outside. His pamphlets powered the American Revolution. Beyond that, he redefined the relationship between citizens and governments. If you view your elected government as a convenience for the sake of security and a “necessary evil”, then you see through Paine’s eyes.
MejoresPrecios.com ($495) means both “better prices” and the “best prices” in Spanish. Even with competition, the winner got a great price. Price comparison will always matter. ICO2N.com ($526) was and still is a network of Canadian companies “committed to … meet climate change objectives” through carbon capture and storage. It seems they recovered their domain.
| Domain | End $ | At | Domain | End $ | At |
|---|---|---|---|---|---|
| MyLifeScoop.com | 380 | SN | 920688.com | 379 | SN |
| 9588.biz | 362 | SN | TheRudyard Kipling.com |
360 | NJ |
| Havex.com | 343 | NJ | Stop WikiLeaks.com |
335 | NJ |
| PZYV.com | 335 | SN | GalaEvents.com | 330 | NJ |
| Ditchling- Museum.com |
330 | NJ | OJTB.com | 330 | NJ |
| OpenAwesome.com | 325 | SN | Brysons.net | 320 | NJ |
| SenseOne.com | 320 | NJ | PressPace.com | 319 | NJ |
| UIVV.com | 318 | NJ | 666300.com | 311 | NJ |
| XQVM.com | 310 | NJ | 3959.org | 309 | SN |
| 2327.org | 305 | SN | 6818.biz | 300 | SN |
| 2636.org | 300 | SN | NewRomantic.com | 291 | NJ |
| IndustryGallery DC.com |
286 | NJ | AgroCope.com | 280 | NJ |
| Underground Railroad.org |
280 | NJ | 6768.biz | 276 | SN |
Americans will recognize the UndergroundRailroad.org ($280) as a network that helped escaped slaves reach the North during the 19th century. Europeans might suppose this domain meant a subway. TheRudyardKipling.com ($360) was a restaurant in Louisville, Kentucky, named for the author. It closed in June.
Some people say TheTruthHurts.com ($611). Some of them want to StopWikiLeaks.com ($335) just as they’d StopCorrosion.com ($498). All I’ve got to say is:
If you survived UK pop from the NewRomantic.com ($291) period, then you heard this song by Culture Club so soul-killingly much that the answer to Boy George’s question must surely be “Yes!”
| Domain | End $ | At | Domain | End $ | At |
|---|---|---|---|---|---|
| BJXGL.com | 275 | SN | ZYL.biz | 265 | SN |
| DietLab.com | 265 | NJ | 3887.biz | 251 | SN |
| Cyprus-Conflict.net | 250 | NJ | ErectilePills.com | 250 | NJ |
| FirstMoments.com | 245 | NJ | TypeNow.com | 240 | NJ |
| 682978.com | 240 | SN | JLSM.net | 240 | NJ |
| BakerEquipment.com | 238 | NJ | SantaVision.com | 233 | NJ |
| 6663.biz | 232 | SN | CNKM.net | 230 | SN |
| 812289.com | 225 | NJ | 608000.com | 223 | SN |
| Nutritional Data.com |
221 | NJ | Gaming Examiner.com |
220 | SN |
| DeltaMetal.com | 220 | NJ | MTHB.net | 220 | NJ |
| HBZT.net | 215 | SN | HBMJ.net | 215 | SN |
| DivorceTips.com | 214 | SN | 9916.biz | 212 | SN |
| MCJJ.net | 211 | SN | MGGX.net | 211 | SN |
| HRBD.net | 211 | SN | SmallCigars.com | 211 | NJ |
Below $400 – that’s where most Chinese-style items show up in the charts this week. You’ll find 4-digit .BIZ and .ORG numerical domains stretching as high as $362. That’s quite new. Compared to these Chinese .BIZ and .ORG domains, 4-letter .NETs are a venerable institution! Although 1 LLLL.net reached $530, everything else came in below $240. That represents a price decline by about 1/3 compared to what I observed last week. (Being an English dictionary word, MUSE.net belongs to a separate category.)
DietLab.com ($265) is a solid brandable for the lucrative dieting industry. Both NutritionalData.com ($221) and BakerEqupment.com ($238) have their commercial applications. And FirstMoments.com ($245) would be a good brand name for baby photography.
| Domain | End $ | At | Domain | End $ | At |
|---|---|---|---|---|---|
| SlowFoodQuebec.com | 210 | NJ | QuietSpaces.com | 210 | NJ |
| TPSW.net | 210 | NJ | 816133.com | 210 | NJ |
| CCKL.net | 210 | SN | 782862.com | 210 | SN |
| CHFP.net | 210 | NJ | ACCV2010.org | 210 | SN |
| Azmol.com | 209 | NJ | PPSX.net | 207 | SN |
| FCMW.net | 204 | SN | GCLP.net | 201 | SN |
| BKPB.net | 201 | SN | 8839.biz | 200 | SN |
| 9567.biz | 200 | SN | JPZC.net | 200 | SN |
| DNSQ.net | 200 | NJ | HHNS.net | 200 | NJ |
| DZFH.net | 200 | NJ | MCPD.net | 200 | NJ |
| TangoToronto.com | 199 | NJ | NJZC.net | 195 | SN |
| CPGG.net | 193 | NJ | BZDQ.net | 192 | SN |
| ButterflyDiary.com | 192 | SN | 5789.biz | 192 | SN |
| 6968.biz | 191 | SN | LFNN.net | 191 | SN |
More than half the domains between $191 and $210 are LLLL.nets. So China continues to find expired domains to bid on. However, they’re .NETs now instead of .COMs – domains that would have been passed over during the previous expiration cycle, since 4-letter .NETs had negligible value a year ago.
| Domain | End $ | At | Domain | End $ | At |
|---|---|---|---|---|---|
| 6311.biz | 190 | SN | PlugBoard.org | 190 | NJ |
| WLJR.net | 190 | NJ | 811356.com | 190 | NJ |
| NYTS.net | 186 | SN | TFPH.net | 186 | SN |
| FDHG.net | 186 | SN | NewBlogger Tips.com |
185 | SN |
| MagnumFilms.com | 185 | NJ | InfoKZ.com | 184 | NJ |
| CinemaLovers.net | 184 | SN | WRLS.net | 183 | SN |
| WorldVisitGuide.com | 182 | NJ | 9665.biz | 181 | SN |
| HistoricMustang.com | 180 | NJ | YYHL.net | 180 | SN |
| DFYS.net | 178 | SN | ZSDC.net | 175 | SN |
| QLHL.net | 175 | SN | ZHQD.net | 175 | SN |
| EuroQuiz.com | 174 | SN | WorldYouth 2013.com |
174 | SN |
| Linux-SH.org | 174 | SN | GeoSpatial Today.com |
172 | SN |
| 7258.biz | 171 | SN | 7616.biz | 171 | SN |
| PFQ.biz | 170 | SN | RFID-Show.com | 170 | NJ |
| WTCL.net | 168 | SN | TSYB.net | 161 | NJ |
| SmithKramer.com | 160 | NJ | 6573333.com | 160 | NJ |
| SeeThisItem.com | 160 | NJ | Serceb.org | 160 | NJ |
| 775505.com | 159 | NJ | QZP.biz | 155 | SN |
| ComfortInn Suites.com |
151 | SN | DLJB.net | 150 | SN |
As I mentioned last week, some domainers are betting on .BIZ, in case it’s China’s “next big thing”. Clearly they’re pursuing .ORG with the same hope. Simultaneously, various registries are working hard to convince domainers to bet on them as China’s next boom – including .CLUB, .TOP, .XYZ, and Uniregistry. And why not? China has 88 trillion inhabitants, including 888 billion millionaires – room enough for hundreds of TLDs each to catch on and spread like a marvelous flu. Tomorrow morning we’ll all wake up sneezing Renminbi.
No trend goes up in a straight line.
Maybe, they were off line because of Thanksgiving and Black Friday. 🙂
Maybe Google Police bust underground banking ring tied to Hong Kong. which happend around Nov 20th, after that China got quiet
Lets get real, these random chips mean crap, only people pumping are the one’s holding, or trading, don’t get caught in the hoopla, you will get caught holding the bag.
I don’t care what so called wannabe domain investors sayy they are the only one patting themselveson the back, but yet holding none of the so called gems.
You have to think for yourself, it is much harder to save money, than make money.
@Ryan,
Some of the LLLL acronyms and numerical domains can be meaningful in Chinese – for end users and consumers. Their website naming conventions are unlike ours.
A legitimate worry, though, is that these domains mean nothing to Western speculators who buy them eagerly in bulk. And there is zero chance that enough Chinese websites will arise to sweep up all these speculative purchases.
Even the owner of 4.cn admits (in an interview a few days ago) that Chinese domainers buy these domains primarily to sell to other domainers – not to end users.
Do I need to explain why that’s a concern? Regrettably, I probably do have to spell it out. This is not unlike a pyramid scheme. For the only way this system can remain profitable on average is if there is a steady influx of new buyers.
After all, if domain traders only aim to sell these CHIPs to each other, then they’re playing a zero-sum game – just like poker. It’s a closed system, in which the average profit is zero and the only winnings come at the expense of everybody else at the table. But, in fact, every transaction entails a 15% commission. So the rules of the game imply an average loss; most players lose money. Brokers and market places are the only exception.
This underlying reality has been masked by a rapid pace of growth, which cannot be sustained. And once it slows below a 17.65% APR, then the losses from a 1-year-hold transaction become obvious.
Bringing in new buyers perpetuates the growth. So it’s no wonder that hype has centered around recruiting more and more traders – to swell the base of the pyramid. That’s very different from niches in which we sell to end users. In those circumstances, we don’t call attention to our purchases and invite domainers to bid against us. No, we buy low and sell high. But where we don’t expect end users, then we make a loud noise so that we can continue recruiting more domain traders to sell to. New arrivals drive up prices, but eventually growth slows and they stop arriving.
A closed system with fees as friction means an average loss. That’s a mathematical certainty. Only the presence of end-user buyers changes the equation, allowing domainers (theoretically) to flip for an average profit. When domaining is end-user oriented, then it’s an open system, a rational part of the supply chain. Otherwise domaining is just a poker game or a pyramid scheme.
I think this reply alone deserves its own blog post. Just add Excel tables.
When relating this to the investment world, two things come to mind. First, I always worry when there is no clear identifiable organic reason for rapid price growth. Second, it is hard to fight the trend as it occurs. For example, there were some thought real estate would crash like it did in 2008. Yet many of them lots their jobs for poor investment performance long before it happened. The key here is to find balance between participating in the trend and not risking too much exposure that will stick you with heavy losses.
*some who thought (apologies for error) – RE would crash before 2008 and it eventually did – is what I meant
Right. Balanced risk and a sensible exit strategy are crucial. Even though I’m pessimistic about the mid-term outlook for this market sector (Chinese numeric and literal strings), people will make money depending on how they play their cards. The best stuff in this asset class will have long-term value, even if it does decrease at some point.
Maybe in the future we’ll see stagnation or even severe depreciation. I think the newer, more speculative areas (i.e. obscure TLDs and long domains) are likely to feel such negative effects soonest and most dramatically. But in the mean time, buyer flight hasn’t begun. New arrivals are still signing up, and earlier arrivals will sell to them in order to cash out before a downturn.
Maybe the’re on the Chinese marketplace? Why not.
@Howie,
Yes, they’ve been on Chinese market places and are there still. They’re also continuing to buy at NameJet and SnapNames. Where they’ve disappeared – for this week at least – is from the higher price range among expired domain auctions.
Who knows what will happen, we are less than a year into this crazy Chip domain buying. But those from China with big budgets who’ve been buying Chip domains will have small carrying costs compared to their initial outlay cost. e.g.: buy the domain for $2,000 and renew it for 5 more years for $40. Real estate, art work, bottles of wine, etc are sold to Chinese investors to the tune of hundreds of millions/billions of dollars, the domain market is really nothing compared to that. Chinese investors will have thousands of domains and can sell them off piece by piece over time, like Schilling and Berkens. I’m sure domains are only a portion of their total investment portfolio. The shorter the domain the scarcer they are, which will help hold value. We are still in the early stages of the internet for some parts of the world that have big populations. For the Western world keywords have been / are the gold standard of domains, but for the other side of the world the gold standard is short letter/number combinations – that’s a big part of what’s changed this year, the perception of what has value. The domain market has been opened to a lot more influence from China that wasn’t there before. Imagine what prices would be like if there were no new gtld’s to increase domain supply and absorb some of those dollars? While I don’t think this is a bubble, I also do think there will be some shakeouts here and there, maybe in the longer names and non .com extensions, but I think we’ve seen a fundamental change in the domain market that has changed things for the forseeable future. Gone are the days of seeing long lists of ‘crappy’ LLLL.com’s selling in the domain forums for $10-$20 each.
@@domains,
Real estate can be built upon or lived in. Wine can be drunk. Art work is purchased as a luxury to be admired. Those same assets can – yes – be traded as investment vehicles. But the rationale and pricing will ultimately based on end-user demand.
For domains, the analogy would be web development or use in marketing campaigns. However, many domain traders are buying these CHIPs without reference to end-user demand. Instead, they’ve been paying attention to the short-term upsurge in speculator demand. That detachment from end-user buyers will have painful consequences.
We had a run up in wholesale short .com prices around 2008 and then a drop. Now we’re on a big upswing. Don’t panic and dump everything. It could drop again but then come back stronger than ever.
@PerfectName,
Yes, the strongest subsets of these Chinese-style domains DO have real value. Arguably they were undervalued for years. In those areas, value won’t drop to zero.
Here I mean LLLL.com or NNNNN.com domains as opposed to very long numeric .XYZ or .CLUB or whatever, which really might drop off to zero in the future.
Hype on the upside, panic on the downside – in either case investors are going to overreact, which hurts them. Prices will overshoot reality and then undergo a market correction. As the prices fall, they’ll undershoot reality too and then come up again. At least, the categories with real value will rebound. Categories that never had more than weak speculative value won’t recover.
I’d distinguish between transients (when prices movements are steep) and steady-state conditions (when prices are constant or change very slowly).
During periods of stability in the past, we’ve seen steady-state prices of LLLL.com domains at or below $100. Perhaps they were undervalued, but those wholesale prices did reflect buyers expectations about end-user resale.
The market has undergone a pretty steep price adjustment during the past year, which is a transient condition that can’t persist indefinitely. At some point, prices peak and the overshoot turns downward back toward reality. But panic sets in, and prices will actually undershoot reality before settling on a new steady-state condition, a new status quo.
Where that new price level will be, nobody really knows. But ultimately, end-user demand is what sets wholesale value. And I’m sure that many new Chinese domain traders haven’t yet learned how slow a process selling to end users can be. It may take a couple of years for their optimism to be adjusted downward.
In the mean time, if prices flat line, then those 15% commissions begin to make the investment opportunity in a stagnant market look very unappealing. This is bound to happen because annual appreciation won’t continue at 17.65% year after year forever.
At that point, the only way to liquidate is to sell below whatever the going rate is, which allows the next domain trader to survive the commission he himself anticipates. Naturally, if every domain trader is discounting his wares below the going rate, then that tends to drag the market price downward.
So we may see a fairly long period of slow downward prices, until a long-term steady-state condition is arrived at. And that will be based on end-user prices, time-to-sale, and uncertainty – the factors we’re all used to considering when we price every other class of domains. Domaining economics don’t work differently in China.