From TP.com to CHIPs and more: a look at NameJet’s February

During February, NameJet reported $2.79 million from 287 sales over $2000 apiece. However, 30 of those payments were leftovers from NamesCon auctions back in January. Setting their $548.9k contribution aside reduces February’s total to $2.24M. Also, nearly half this amount came from a single record-breaking sale. Subtracting that, February totals $1.31M. By this measure, the month ranks 4th overall – behind the previous 3 months.

TP.com ($929k) is the 4th LL.com sold by NameJet. Looking back at July ($555k) and September ($694k), it seems the market place’s ability to attract bidders for this valuable asset class has improved steadily. And, of course, 2-letter .COMs have appreciated quite a bit since April 2013 ($120k). NameJet itself has come a long way since 2012, when monthly highs could be as low as $12.1k. Even as recently as August 2015, the peak sale was merely $33.0k.

From EXJ.com ($22.3k) to ABU.com ($53.0), 8 LLL.com domains sold during February. None of them would qualify as a “CHIP” – meaning they all contain vowels or “V”. So the “vanishing CHIP” trend that I discussed last time continues. Owners might be nervous to release too much supply in a bear market, lest such a dump dilute prices. Some might be hoarding LLL.com CHIPs in order to exert price pressure on lesser categories they’re selling. Possibly fewer domains remain in Western hands, leaving NameJet without inventory.

Looking only at February data, non-CHIP LLL .COMs suggest a decline of $485 per day. But a closer inspection of the last 3 months shows a zigzag pattern. After falling for 2 months, prices spiked during the first week of February. With so little data after that abrupt lift, it’s difficult to judge whether the trend is up or down. One thing we can say with confidence: This category generated $247.1k for NameJet.

The absence of 3-letter CHIPs in .COM has sustained prices for their LLL.net cousins. From HGQ.net ($2.5k) to ZYW.net ($4.4k), NameJet sold 114 LLL.net CHIPs in all. Lately, with so many China-favored categories doing poorly, 3-letter .NETs have seemed relatively robust. And NameJet has become increasingly dominated by them since December. 44.4% of domains sold during February belong to this category, which amassed $385.2k. This alone beats more than 1/3 of monthly totals at NameJet during the past 5 years.

LLL.net CHIP prices actually rose by about $100 during February. That’s a plateau, relatively speaking. Most of the appreciation in this asset class happened in a single month, between October and November, when the median rose from $2.1k to $3.0k. Now, after a full season, we see 8 times as many LLL.net domains selling; but prices are fairly flat. During February, the median was $3.3k – but $3.9k for domains with repeating letters.

36 LLLL.com CHIPs cleared the $2k reporting threshold last month. That’s comparable to January, which had 34, but far less than December, which racked up 107. As you might guess from the lowest of these – ZRHC.com ($2.0k) – other domains in this category fell beneath $2k. Omitting those lower sales causes statistics such as mean and median to be unrealistically high. Consequently, we know that the real average (for CHIPs without repeating letters) is below this data set’s median of $2.2k.

At first, it looks like this category declined by $158 during February. My hunch, though, is that the high sale, GFTS.com ($4.3k), ought to be excluded. Surely it was valued differently from other CHIPs because of its resemblance to the English word “gifts”. If you agree, then it appears the decline was twice as severe; and CHIPs lost $312 last month. Now, I anticipate CHIP owners will see a pair of high sales early in the month and insist that they be excluded as outliers too. Fine. Although I can’t see anything special about CKSY.com ($4.0k) and TCHG.com ($3.4k), they did finish $500-$1100 ahead of all other 4-letter CHIPs. Setting aside the top 3 sales, optimists can point to flat prices during February.

However, there’s some distortion caused by domains with repeating letters. If we look only at non-repeating CHIPs, then the decline shows up as $81 (excluding the top 3 auctions) or else as $421 (excluding just GFTS.com). At best, we can argue about how steeply CHIPs are going down; nothing suggests they gained value during February. Moreover, rates of decline / growth tend to be underestimated, since the lowest sales – i.e. those below $2k – aren’t included. By now, a 3-month drop in LLLL.com CHIP prices is quite clear. If you’re 1 of the readers who preferred leaving out the top 3 auctions so as to make the slope appear less steep, congratulations! Here is what the past 3 months look like in that best-case scenario. With only the tip of the ice berg showing, you can see how the slope of the regression line isn’t as steep as reality.

4-letter .COMs, including a dozen non-CHIPs as big as EXUE.com ($31.4k), contributed $173.2k. Another $218.9k came from 23 numerical domains. A quartet of 4-digit .COMs ranged from 4753.com ($13.1k) to 5233.com ($51.8k). 5-digit numerics reached as high as 97088.com ($22.5k), but the median was far lower: 92696.com ($3.7k). 6-digit repeaters came in under 783666.com ($3.7k). Bizarrely, a single Chinese buyer also purchased 7 domains of the form 77SunCity.net ($2.0k), 55SunCity.net ($2.5k), 88SunCity.com ($2.9k), etc.

Leaving aside that million-dollar TP.com, here’s a summary of NameJet’s February revenue:

• 29.4% from LLL.net CHIPs
• 18.9% from LLL.com non-CHIPs
• 16.7% from numerical domains
• 13.2% from 4-letter .COMs (CHIPs and non-CHIPs)
• 3.5% from other LL / LLL domains in .NET / .ORG
• 1.4% from NN + “SunCity” in .COM / .NET

What are we left with? A meager 51 auctions (19.8%) bringing in 16.9% of revenue. That accounts for all keyword-based names, brandables, Chinese Pinyin – every domain consisting of more than 4 letters and no numerals. These are the most meaningful part of the domain market and the internet as a whole, but they’re such a tiny sliver of NameJet’s results lately that discussing them would seem willfully perverse. Instead I’ll just list the 4 that broke into 5 figures: Layouts.com ($22.1k), Ichong.com ($14.0k), HuoYao.com ($13.8k), Centra.com ($12.2k).

At the beginning of last year, January 2015 set a record with 148 sales – still NameJet’s 5th biggest month. Back then, China was a factor but hardly dominant; 9 LLL.com CHIPs could sell for a median price of $12.1k and get only a cursory nod. Now, after December brought in 383 sales, seeing 257 in February seems almost paltry.

In retrospect, December looks like the peak of the Chinese surge. Why do I say that? Because there were 5 LLLL.com CHIPs in October, 66 in November, 106 in December; but counts have fallen to 1/3 that number in January and February. Because, up until December, prices only rose, whereas most China-favored categories have declined in value during the past 3 months. Because December reported 49% more domains than any other month. Because, subtracting each month’s top sale, December generated more than double the revenue of any other month. Because only 6 months in 6 years can report 1/3 as many domains, and only 3 months ever can report 1/3 as much revenue. Which months? Mainly the 2-month warmup just prior to December and the 2-month cool-down period since.

Starting last July, NameJet began surpassing its own records almost monthly, thanks primarily to the Chinese surge but also owing to more frequent LL.com auctions. That record-setting pace of record setting will likely slow. After all, 2/3 of domains sold during February belong to categories at risk of slipping beneath $2k – meaning they’d no longer be reported.

Don’t believe me? Consider: As recently as August and September, 6 months back, there were no LLL.net domains at all above $2k. A year ago, last March, 3-letter .NETs had sunk to $320 at NameJet … after selling around $1.1k half a year earlier. In other words, this category can go down by a factor of 3 in a matter of months; it has before. Right now it’s up by a factor of 10 from 2015’s low point. If it drops by half, NameJet loses 114 domains – 44% of February’s results.

As for LLLL.com CHIPs, NameJet had never reported more than 3 in any month until September. Last year, in February, CHIPs had barely climbed up to $119. Currently many of them are selling below $2k, and the downward trend has persisted for a full calendar quarter; so it’s hardly blasphemous to suggest that these domains might revert to their price range from half a year ago. In case you’ve forgotten, that was $530-$1919 with a median of $806.

Whether that happens or not, NameJet’s monthly totals will rise and fall with the Chinese tide. Lately, China has been drowning in liquidity; and these reports became flooded with statistics rather than brand names. Yet all sorts of unique specimens – from EggDonors.com ($5.2k) and SmokeWeed.com ($6.6k) to Ceramicas.com ($3.9k) and HangLian.com ($4.7k) – become visible at low tide.