July-August 2014      DNJournal.com      The Domain Industry News Magazine

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Domain Sales Continued Double Digit Year Over Year Gains in 2Q-2014

As I told you in my last newsletter, domain sales kicked off 2014 with some astounding year over year gains in 1Q-2014. That powerful post recession rebound continued in 2Q-2014 as well. 

The total $ volume of sales reported to us (sales numbers we detail in our popular weekly domain sales reports) across all extensions in 2Q-2014 was $29.5 million, a powerful 32% increase over the $22.4 million reported in the same quarter of 2013. 

That $29.5 million was 8% lower than the $32 million reported in an outstanding previous quarter (1Q-2014), but that, due 

2nd Quarter image from Bigstock

to an unusual situation, was more an illusion rather than a decline in sales. Go Daddy/Afternic, one of the largest aftermarket sales platforms, stopped reporting their sales after the first week in June due to the mandatory quiet period surrounding Go Daddy's IPO filing. In the first five months of this year, Go Daddy/Afternic reported $12.9 million in sales to us, an average of $2.6 million per month. Assuming they at least maintained their average in June (very likely given the strength in the overall market), the sales they were unable to make public for the balance of June would have added about $2 million to the 2Q total, putting it almost even with the red hot pace set in the previous quarter. 

The results for .coms only closely mirrored those of the overall market (no surprise there since .coms always account for the lion's share of total domain sales, typically claiming about 75% of the total pie). In 2Q-2014 $21.5 million worth of .com sales were reported, a very healthy 28% jump over the same quarter a year earlier. As was the case with the volume $ across all extensions, .com was down from the previous quarter (1Q-2014) when $25.7 million in .com sales were reported. 1Q-2014 benefited from an unusually large group of blockbuster .com sales including Whisky.com at $3.1 million and two others, 37.com and Youxi.com, that sold for over $2.4 million each. In addition, the 2Q number was reduced by about $1.5 million due to the Go Daddy/Afternic quiet period noted above - the end result of those factors being a 16% decline quarter to quarter (10% off if you give 2Q the average Go Daddy .com sales that were made but not reported). 

Global business image from Bigstock

The only category that suffered a year over year decrease was, surprisingly, the ccTLDs. That normally strong category fell 12% from the $3.3 million reported in 2Q-2013 to the $2.9 million recorded in 2Q-2014. The quarter to quarter drop was even steeper, showing a 37% decline from the very strong previous quarter (1Q-2014) when $4.6 million was posted. 

Whatever the reasons for the setback in this group were, they were short lived as the country codes bounced back strongly in 3Q-2014 (a detailed report on that quarter will be in our next newsletter that will follow shortly after this one). 

In another anomaly, the non .com gTLDs (.net, .org, inf0, .biz, etc.), normally the weakest category, had the biggest percentage gains! The group shot up 127% year over year, zooming from $2.2 million in the second quarter of 2013 to $5 million in 2Q-2014. This group typically comes in at about $2 million per quarter in reported sales, so you might think something extraordinary must have happened in 2Q-2014 to more than double that number. You would be right. In 2Q-2014 Sex.xxx was sold for a mind bending $3 million (more than this entire category logs in a normal quarter). Without that one sale the non .com gTLDs would have come in at $2 million, a number that would be have been off 10% year over year and down 15% from the previous quarter (1Q-2014) when sales totaled $1.7 million.  

Because outlier sales like Sex.xxx can dramatically skew $ volume numbers we also report median sales prices which can give a more accurate view of market movements. The median price is the point at which half of sales were higher and half were lower. Median numbers tend to move in small increments, often just a percentage point or two. 

The interesting thing about 2Q-2014 median sales prices is that, unlike the total $ volume numbers, the median price increased in every category year over year and in all comparisons (both quarter to quarter and year to year). That is an undeniable sign of an improving market. 

In 2Q-2014 the median sales price reported to us across all extensions was $3,000 - a very strong 9% year over year increase from $2,750 in 2Q-2013 and 1% better than the $2,970 posted in a very strong 1Q-2014. (*As always, we need to note that, in order to keep our weekly reports at a manageable length, we do not track sales below four figures (to be specific, we track .com sales of $2,000 and up and all other TLDs from $1,000 and up). If we also tracked the lowest end of the market, our median numbers would be lower and out total $ volume number would be higher).

The median prices for .com only showed even bigger improvements. In 2Q-2014 the $3,546 median was a whopping 14.5% higher than the $3,097 reported in the same quarter a year ago and 7.5% better than the previous quarter (1Q-2014) when it was $3,301.

Growth image from Bigstock

The ccTLDs, despite their drop in total $ volume in 2Q-2014, registered a solid increase in their median sales price. It was $2,110 in 2Q-2014, 6% better year over year and 5.5% better than the previous quarter. 

While the non.com gTLDs made it unanimous, also improving both year over year and quarter over quarter, their increase was by the smallest possible increment. The $2,000 posted in 2Q-2014 was exactly $1 higher that the $1,999 recorded in both 2Q-2013 and 1Q-2014! That is still pretty good considering that this category - the one to which all new gTLDs belong - has been flooded with hundreds of new competitors. That could wind up bringing the medians down as more new gTLD aftermarket sales are reported. With so many options to choose from, it would seem logical that buyers won't have to pay as high a price for many names in this category. Of course, market forces that none of us can predict with certainty could always produce unexpected results.




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Ron Jackson

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