.NET Domains More Valuable Than .COM: Sedo

Sedo logoThe average sale price of a .NET domain name was $300 higher than the average .COM sale in the second quarter 2012, Sedo’s Q2 2012 Domain Market Study reports.

However it appears the number of domain names sold through the Sedo marketplace is falling in the face of competition from alternative marketplaces. The ongoing global financial issues could also have some impact, but new domain name registrations continue to grow strongly, with the Verisign reporting growth in the total number of registrations growing 11 per cent year-on-year across all TLDs in their Domain Name Industry Brief for the first quarter 2012. So demand for domain names remains strong.

The increase in competition is also reflected in the Domain Name Journal list of top reported sales with Go Daddy Auctions and DomainNameSales regularly having more domain names in the top 20 reported sales than Sedo.

In the second quarter there were 9049 domain names sold through the Sedo marketplace compared to 10,600 in the same quarter in 2011. There were also 10,133 sold in quarter one while there were 9778 and 8915 domains sold in quarters three and four respectively in 2011.

The average price for .NET domain names jumped around 50 per cent compared to the previous quarter from $1619 to $2470, which means the average .NET domain name was more valuable than the average .COM domain for those sold through Sedo. In the quarter the average .COM domain sale was $2107 compared to $2347 in the previous quarter. The average does not seem to be affected by any significant .NET sale with the highest public .NET sale in the quarter being hot.net, selling for €56,700. Whether there were any unreported sales impacting these figures is not published.

But .COM sales remained the most popular extension accounting for almost half (48%) of all domain names sold in the quarter through Sedo, easily eclipsing .DE (15%), .NET (6%) and co.uk (5%).

“The .COM extension will remain king for a long time, but the strength of .NET sales this quarter clearly demonstrates the continued appeal of alternate TLDs,” continued Mack-de Boer. “We are looking forward to the new domain extensions being introduced next year, and will be monitoring how well they fare against the historical heavyweights like .COM.”

In how domain names are sold, Sedo reports that their Buy Now sales continue to be the most popular method of selling domains, accounting for 42 per cent of all domains sold in the quarter. Offer-counteroffer accounted for 31 per cent of all sales and auctions for another 15 per cent. Sedo notes that buyers increasingly prefer to purchase names at set prices, and that sellers are beginning to opt more and more for the listing type that buyers prefer.

“Several factors are driving the growth of Buy Now transactions. First of all, buyers are looking for a quick, easy and hassle-free purchasing experience, where the total purchase price is known up front. Sellers are also realizing that Buy Now prices are simply a good strategy – they have no worries over lengthy negotiations, and they sell more names,” said Liesbeth Mack-de Boer, CSO of Sedo. “The second reason for this growth is the expansion of the SedoMLS network, which distributes Buy Now listings across the Web at registrars and other domain service providers. We’re getting premium domains in front of more people than ever before.”

While sales of million dollar plus domains get the headlines, the vast majority of domain names sell for much more affordable prices. Almost half (46%) of all sales through Sedo sold for $500 or less in the quarter while 39 per cent of domain names sold for between $501 and $2500. Only one per cent of all sales sold for $50,001 and higher.

Among ccTLDs, there were increases for most of the top contenders, with .AT showing the biggest increase from $1484 in quarter one to this quarter’s average price of $1723. .DE and .FR also showed strong growth while .ES and .co.uk showed declines, but the market overall is still a very strong one for ccTLDs. And for country of origin of buyers, Italy and Australia entered the top 10 most frequent countries for people purchasing domains while China and Austria fell off the list.

The most popular length of a domain name was eight characters, closely followed by nine and ten characters, something that has been consistent since Sedo introduced this in their reports six months ago. The longest domain sold at Sedo in the second quarter was private-krankenversicherung-test.de, at 34 characters. The report notes that most domains with more than 15 characters consist of two or more German language terms.

In the report, Sedo predicts that with the performance of Facebook’s IPO, domain name investors do not need to worry about social media becoming the main online home for businesses.

To download the Sedo Domain Market Study for the second quarter 2012, go to:
sedo.com/fileadmin/documents/pressdownload/Q2_2012_DomainMarketStudy_US.pdf