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Why you shouldn’t go bananas over Banana.com domain name “sale”

There’s a good reason to be skeptical of a $2 million banana.com domain sale.

rotten-bananaLast 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.

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  1. SPENCER says

    The turd is the punch bowl that are the new G’s need to be removed and THAN capital will flow to solid .com’s

  2. T says

    I don´t hope walking away from a deal is part of a Chinese culture.
    We have a Namejet auction currently where the winning bid came from China and we are waiting for payment for weeks now,

    I´m surprised that none of the domains listed above have been transferred.
    But then again, these auction results always have looked too good to be true!

  3. Ram says

    This doesn’t surprise me.
    The Chinese are notorious for non-payment at auction, this is rife in the antiques world when Chinese art/antiques are involved.

  4. Adam says

    @T . I have had Chinese walk away from agreed deals.

    @ Andrew. I actually think banana.com is worth $2,000,000 easily to the right buyer. It’s totally unforgettable and hard to misspell.

  5. John says

    >”While GG.com and HG.com might seem plausible”

    Tell me House.com isn’t worth *easily* way more than $2 million *and up* (way up) real value. I dare you. 😐

      • John says

        The sharks smell blood, hence no mention of House.com beyond saying its name. House.com is up there with some of the best and most valuable .com’s of all time, like easily top 5.

        • John says

          (Will a desperate fake “troll” come in to try to discredit my words, because of how valuable House.com really is? Tune in later, same Bat time, same Bat channel…)

          (Older reference lost on younger viewers and perhaps many outside the US…)

          • thelegendaryjp says

            Well my wife says at times I act desperate and I do troll once in a while so…

            House.com is a great name, worth 7 figs, sure but among the best? NO.

            You have to remember that some times a plural or non is the better one by FAR! When is the last time you looked to buy a car or house etc and looked via the singular? Most people would I imagine look for homes or houses or condos not house home condo, jmo. Now an in depth look at search stats would need to be done and each product is different but to me the plural wins out in this case.

            Not trolling just debating 🙂

          • John says

            Lol. And nice banana pic there.

            I must respectfully and friendly-fully disagree with you on singular v. plural in this particular case, even for home v. homes, but not condo v. condos.

            The plurals in each are obviously spectacular multi-million dollar domains.

            That said, the killer brand name along with the killer generic quality would be House.com and Home.com. “Houses” and “Homes” would be more dryly descriptive, despite being worth a fortune, although “Homes” is still also strong as a brand, but not “Houses.” Condo is the younger cousin, not out of school yet, and would be a bit awkward, so the plural wins there.

            I have to stick to my guns (not gun); House.com is definitely an 8 figure domain. High 7 or less would be the nice bargain deal level. It is one of the most quintessential real estate domains of all time, and versatile for other uses.

  6. R P says

    When JD.com rebranded under the two letter domain the Chinese demand for two letter domains increased materially.

    If banana.com did indeed sell for $2M than it is most likely because Apple (apple.com) is the most valuable publicly held company in the world.

    In the West “banana” doesn’t necessarily have a positive connotation ie banana republic but the Chinese dont know that. Similar to vast majority of West not knowing the number 4 can be negative.

    I can see the logic of a Chinese investor paying $2M for banana.com based upon Apple but see no other reason

  7. Joseph Peterson says

    Heard the same thing at NamesCon – that these bids were some form of optioning, possibly even by Western companies acting through Chinese intermediaries, and that the transfers might not go through.

    @John,

    It’s not the price itself that’s so surprising. (Right, $2M is hardly an overshoot for House.com.) What surprised everyone earlier was an apparent sudden shift in Chinese spending toward English dictionary words. That’s a radically different category from numerics, 2-letter domains, CHIPs, Pinyin, etc. – i.e. the stuff normally sought after in China.

    Some day we may see China buying for non-Chinese markets. After all, the converse is true today: Non-Chinese buyers in the West have adopted foreign criteria in order to trade with China.

    But it was shocking to see Chinese investors go straight for 7-figure English dictionary words. Without testing the waters first, I mean. If China were beginning to take an interest in non-Chinese domains, then I would have expected them to begin buying in lower-priced areas first, experimentally, until buyer demand and confidence ramped up to 7 figures. The suddenness of the shift is what made some people skeptical.

    We’ll see if the domains transfer, I guess.

    • John says

      @Joseph

      I think it’s a natural progression and very consistent with Chinese buying abroad in general, especially their general buying happening here in the US. So, makes sense for them to expand that way and certainly good for the industry imo.

  8. Monte Cahn says

    I have heard from folks there and brokers involved that only a few names in that auction are closing. Total sales will be a fraction of what was reported.

  9. Anon says

    Aren’t the Chinese simply using these domain names to bypass capital controls and get their wealth out of the country anyway? As long as they believe the domain names will hold their value until they can trade them among Chinese friends or perhaps sell them to Western end users, the domain names will serve their purpose of pulling the wool over the eyes of the Chinese Communist Party.

  10. Andrea Paladini says

    The rotten banana image is really self-explaining 🙂
    When we talked about fabricated and/or fake sales, manipulations, etc … et voilà! 😀

  11. JP says

    Crazy story and it’s true. I still remember sitting up late in my dorm room in 1997 checking what domains were available because I had heard of some big domain sales. I checked hundereds of names, everything I could think up. There were tons of great 2 word domains I passed over because they were 2 words. The only 1 word noun or verb that came up available was Banana.com. I stared at it for a while, thought about the $70 NetSol fee for 2 years and then though, “what am I going to sell bananas?” And passed on it. Became a domainer in 2007, hindsight.

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