How long can domain prices keep going up?

[htmlindex]

With the recent sales of Porn.com selling for $9 Million & Poker.com selling for $23 Million, I was wondering how high prices can go?

Will a generic dot com domain name be worth $500 million dollars in the future?

If prices keep going up, how will the people that buy these names end up making revenue off those sites?

Do you think that .com names will slow down & ccTLDs will have the biggest growth in the future?

I am interested to hear people's opinions.

 

[gazzip]

Hard to say but here's a few with BIGGEST prices I have ever seen for domains that are for sale > bigticketdomains.com

Property.com + Properties.com for $36,000,000 (Rick Schwartz)

Candy.com Offers Over $10 Million (Rick Schwartz)

Stockmarket.com for $15,000,000 (?)


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[markmiddleton]

Stockmarket.com for $15,000,000 (?)

I can't comment on all names, only those i've researched and this is a low Price imho. I predict it will double if not triple in the next 5 years.

As to whats the ceiling value, the only answer is what people will pay for it. What new extensions are released in competition with existing ones, how the economy does, luck, how an industry does in a specific country... the list goes on of factors.

I have always said that the various firms who could benefit greatly from Candy.com, should of bought it up years ago; in fact if I remember correctly I was saying that years ago.

 

[Dan]

The prices have to keep going up... unless you want to sell for a loss...

 

[accent]

The biggest factor is the expansion of the internet. Like a new city that did not exist a few years ago, new profit streams are being discovered, and more and more people are being attracted. This expansion is fueling the rise in value of domains.

Domains are the real estate of the city. Those in the prime central area will continue to rise. Those surrounding new development (.mobi?) will rise. Some areas will lack popularity and see little growth.

How much is well located property on Fifth Avenue, New York or Rodeo Drive, Los Angeles worth? You could sell jewelry or clothes from any place, but the premier addresses attract customers and define businesses. I do not think that $500 million is unreasonable for top domains in say, ten years. (IF...)

The "IF" is that the domain name system is an artificial construct. It could be superceded by new addressing methods and the whole system could become obsolete. Or ICANN could screw up so badly that confidence in the system would colapse. And there are many more "IF"s.

That is why it is called speculation.

 

[gazzip]

I can't comment on all names, only those i've researched and this is a low Price imho. I predict it will double if not triple in the next 5 years.
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I was'nt questioning the prices, they are just the highest ones I have ever seen listed - the (?) meant I did not know who the owner was. (and I could'nt be bothered looking).

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And there are many more "IF"s.
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Yeah like IF they were'nt investing in some of these top names then they would probably be paying the tax man alot more than they do


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[markmiddleton]

I was'nt questioning the prices, they are just the highest ones I have ever seen listed - the (?) meant I did not know who the owner was. (and I could'nt be bothered looking).

Oh yes sorry if it sounded like I was, it was just a passing comment on value after the months of research i've plowed into that type of name. The whole Euronext - NYSE merger and the talk of FTSE, NASDAQ, is really going to see the competition between NYSE (euronext) and NASDAQ go up and up and if they are lucky that competition will be reflected in the names value. At least it is in search trends over the past year on certain names imho.

If I owned it, I would be raising the prices in line with it to be quite honest but then I think I own enough of that market for now anyway

 

[Jasdon]

As business's come to realise the value of type-in traffic vs. offline advertising, the value of names that get just a handful of type-ins per month will increase greatly.

At present, I see the prices of names at the top of the market being more relevant (value wise) than at the cheaper end - there is far more room for movement at this end too.

However a 'regular' business attracts it's customers, there is always a cost, sometimes unquantifiable. With domains, there is a one-off cost (excluding renewal fee) and they then own an asset. When looked at from a balance sheet point of view, it's free advertising.

 

[VURG]

One thing Poker.com was reported to be making $300K/month. This works out to be around 15% of the sale value of Poker.com per year. If advertising income from a domain remains secure for the next 20 years, I would expect the norm to become closer to 6% giving Poker.com a value closer to 2.5 times the sale value.

However advertising income for domains is considered a bit too risky for a lot of investors now and so 15% per year of the sale value is closer to the norm.

 

[markmiddleton]

However a 'regular' business attracts it's customers, there is always a cost, sometimes unquantifiable. With domains, there is a one-off cost (excluding renewal fee) and they then own an asset. When looked at from a balance sheet point of view, it's free advertising.

Do you mind if I borrow some of the way you've phrased that for sales type? Its summed up brilliantly.

 

[sanne]

Consumer spending online continues to grow and hundreds of millions of marketing/advertising dollars are shifting from old media (TV, radio and print) to the internet. All recent reports say this trend shows no sign of slowing down.

If you think of a great domain as a Superbowl ad, just consider the advertising budget for those 30 second spots going towards online marketing.

Historically, we're still at the very, very beginning of the internet. Like when paper was first invented or the printing press.

The "IF" is that the domain name system is an artificial construct. It could be superceded by new addressing methods and the whole system could become obsolete.

Agreed. The only question is how long current domain standards will last. It's anybody's guess whether today's .ext (.com...) domains will still be used 20 years from now. So I think there's a window of opportunity within the short and mid term. Hopefully, those who have made strong investments will be well placed to transition to whatever addressing system the long term future holds.

 

[GoPC]

There MUST be a ceiling on prices because, as you know, buyers are ALWAYS asking what the REVENUES are to justify a COST.

With PPC going DOWN and selling prices based on earnings, HOW CAN THEY INCREASE in Price?

It's kind of a paradox, ain't it?

GoPC

 

[Lasher]

There MUST be a ceiling on prices because, as you know, buyers are ALWAYS asking what the REVENUES are to justify a COST.

With PPC going DOWN and selling prices based on earnings, HOW CAN THEY INCREASE in Price?

It's kind of a paradox, ain't it?

GoPC

PPC being paid to domainers is going down. PPC that advertisers pay is going through the roof.

If you own a domain getting 20 uniques a day in a specific market, what will be the equivalent value of those 20 uniques to a business owner in 5 years time? If you're getting 20 uniques a day on a parked domain then you might only be getting 1, 2, 5 or 10 clicks. If the domain is owned by a relevant business, that 20 uniques is the equivalent of 20 clicks from a search engine.

The numbers start to look a whole lot bigger when you look at things from the perspective of an end user bidding on AdSense clicks rather than that of a domainer.

 

[accent]

PPC is not the only value source for domains. A Domain is a business identity. If it is memorable or provides an image it can be very valuable without traffic.

 

[markmiddleton]

PPC being paid to domainers is going down. PPC that advertisers pay is going through the roof.

If you own a domain getting 20 uniques a day in a specific market, what will be the equivalent value of those 20 uniques to a business owner in 5 years time? If you're getting 20 uniques a day on a parked domain then you might only be getting 1, 2, 5 or 10 clicks. If the domain is owned by a relevant business, that 20 uniques is the equivalent of 20 clicks from a search engine.

The numbers start to look a whole lot bigger when you look at things from the perspective of an end user bidding on AdSense clicks rather than that of a domainer.

Good points, I often look at it from the perspective of, what if they developed the domain to a basic website and had it as an affiliate/review or linking page to their main site, then you can take those potential visitors and add some of the large numbers of potential searches being done. Who knows maybe one day big companies will even be wise enough to do that on keyword rich terms...

 

[AdoptableDomains]

As long as someone can buy a name and make more money it than it will cost, prices will reflect that. This thread is based on only a few sales. If you look at the big picture, domain prices are still way below what they were before the dot-com crash of the late 90's. Let's just hope the rest of the market catches up to the few unusually high sales. I think it's been edging that way for the last 2 years now.

 

[htmlindex]

If you look at the big picture, domain prices are still way below what they were before the dot-com crash of the late 90's.

Were domain names worth more back then before the crash???

Does anyone thing that ccTLDs will have more growth percentage wise in the future as opposed to dot coms because of the high prices, or dot coms will always have the biggest growth percentage wise?

 

[Ronald Regging]

One of the major IFs to consider also is tiered renewal pricing. I know it has been discussed in the past, and knowing ICANN and their greedy ways, I wouldn't put the idea too far in the closet. Say you own a domain thats generally valued at $xxx,xxx. So instead of paying $7 a year for a renewal, you may need to spend $x,xxx or more.

 

[mirrorcube]

Great point, every domainer should keep on eye on this proposal and ICANN in general and make sure this doesn't happen to the oldest extensions. The newer ones seem to have tiered pricing now aka .TV with their premium name renewals which is scary and why i only have a 20 or so .tv names instead of 50 or more.

One of the major IFs to consider also is tiered renewal pricing. I know it has been discussed in the past, and knowing ICANN and their greedy ways, I wouldn't put the idea too far in the closet. Say you own a domain thats generally valued at $xxx,xxx. So instead of paying $7 a year for a renewal, you may need to spend $x,xxx or more.

 

[Rubber Duck]

Property.com + Properties.com for $36,000,000 (Alexa Rank 250,333 and 1,684,98191)

Candy.com Offers Over $10 Million (Alexa Rank 256,200)

Stockmarket.com for $15,000,000 (Alexa Rank 1,981,132)