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August 16, 2018

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The Lowdown is compiled by DN Journal Editor & Publisher Ron Jackson.

GGRG 2Q-2018 Report on Liquid Domain Sales Shows China Slowdown Driving Drop in Median Prices 

Domain brokerage and consultancy GGRG.com has released their latest free quarterly report breaking down aftermarket sales and development of "liquid domain names" in the 2nd quarter of 2018. GGRG defines liquid domains as  being very short .com domains consisting of all letters (L) or all numbers (N), as well as 3-character (C) .coms that have a  combination of letters and numbers. GGRG terms these categories "liquid" domains because they are relatively easy to sell at prevailing market rates.

In recent years a very high demand for these kinds of domains in China has been pushing prices upward but with a major slowdown there, that trend has now reversed. In 2Q-2017 GGRG Founder Giuseppe Graziano noted, "The median values of disclosed transactions recorded very large decreases in almost all categories. This calls for caution in view of the early Q3 results which are indicating sharp valuation drops for Chinese premium 4Ls."

With respect to total dollar volume, the GGRG report noted, "Escrow.com recorded $12 million in transactions, with the strongest categories being the 3Ls ($4.8M) and 4Ls ($4.3M). These values are in line with last quarter and signal a notable growth in the 3Ls category. ShortNames.com recorded $5.4

GGRG Founder Giuseppe Graziano

million in transactions, with the most traded categories being 3Ls, 4Ls, and 5Ns, respectively at $1.4M, $1.6M and $1.3M. The 5th percentage values (a measure of floor prices - the lowest end of the price range for each category) gave us mixed signals: on one hand 5Ns and 3Ls showed record increases (+56% and +31%), on the other, 4Ls - the category which accounts for 75% of all liquid domains - dropped 13%."

Another passage in the report indicated the inception of the GDPR last May that brought significant changes to the ownership data that was still publicly available likely affected their domain ownership analysis . GGRG noted, "For the first time, we recorded a drop in Chinese ownership, coupled with a sharp decrease in the number of domains associated with European registrants (down to 4.6% from 7.4%). This could be easily explained by the new privacy rules affecting European owners. The gainers were the "rest of the world" (+4%, from 7.7% to 11.7%), the N/A category and, in small measure, the US, which gained 1%. China remains the largest owner of liquid domains with 165,000 domains associated with Chinese registrants."

Looking ahead, the GGRG report said, "A significant decrease in the wholesale value of Chinese Premium domains might signal that the tide is shifting away from China and back to the West. Chinese owners might start to finally sell inventory. Once again, we expect Western investors and end users to focus on the most premium liquid domains when looking at buying opportunities: specifically, acronyms with Western Premium letters and Keyword domains. We retain our recommendation for investors to focus on quality over quantity."

(Posted August 16, 2018) 

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