new gtlds The Potential For Big Jumps in New Extension Prices

[Bob Hawkes]

For some time I have been bothered by statements that the worth of a domain name is 'reg fee' simply on the basis of a limited (or nonexistent) sales record in that extension. Since I have been closely following the ngTLD sales for about a year and a half I have constantly seen cases where a high value sale represents a big jump from previous sales.

That happened again in the most recent (Sept 17) NameBio daily report, where smile in the direct extension sold for $7018 on Sedo. There had, before this, only been ever 4 sales in the extension, and the previous one was almost two years earlier and just $111 (can see the list here).

Now I know that the ngTLD sceptics will jump in and say it is a fluke and the purchaser paid too much (see I said it for you so you don't need to! ). That is a possibility, I readily admit, but I think if you take a multi-faceted detailed appraisal look that the price of the smile sale is about right.

I do such an analysis in this new post on my blog.

I also addressed the question of whether this was the only time a big jump happened. Some of the more dramatic ones I list below (there are many others, but I think these are the biggest jumps)

• When home.loans sold for $500,000, the previously highest sale in loans was just $7500 and there were only 4 previous NameBio listed sales at any value in the extension.
• When autism.rocks sold for $100,000 on Sedo in 2015 there had not been a sale at all previously in the extension.
• Vacation.rentals sold in late 2017 for $500,300. The previous highest sale in that extension was just over $1500, and even today there are only 5 other sales in the extension listed on NameBio.
• The .online extension has sold many times, but when casino.online sold for $201,500 in March 2017 the previous highest sale in the extension was just over $16,000 (there have been some higher sales in the extension since them, but not nearly at the casino level).
• The great domain name video.games sold for $183,000 in 2017. The next highest sale in the extension is only $1101.

Thanks for reading!

Bob

 

[bmugford]

You are pointing out are a handful of sales that are way outside the norm. That is like the definition of an anomaly or outlier.

Legacy extensions have sales in every price range. It is not like there is one sale of $500,000 than the next closest is $1,500.

That is far more impressive than some random, isolated registry sales. All it takes is one buyer, or sucker, in some cases. These sales are not repeatable, or really that relevant to a domain investor.

Brad

 

[deez007]

@MetBob ...spot on!

Awesome blog post as well.

 

[Kate]

The part I disagree with you on, and hope you will let me try to convince you, is the part where you write this: "I know that if I buy a .rocks domain, the likelihood of a sale is nil, regardless of past reported sales." The whole point of my post was to try to move us away from generalizing on one parameter (TLD). Lets say that I had the name music(.)rocks or geology(.Irocks or even space(.)rocks or curling(.)rocks. Do you really say all of those combinations have nil chance of sale?

The chances are remote, in addition to statistical probabilities I forgot to mention that I also look at the risk/reward ratio. I can make low $,$$$ sales in .com with no problem, so I don't see the point of taking a bigger risk in nTLDs that are much less in demand, if low $,$$$ is going to be the realistic/maximum target price.

Let's look at just one, music(.)rocks. It is in my mind clearly way better than the three combinations that sold so far in .rocks. But has music sold in other new extensions? Yes, a number actually
....

Two things to consider here:

• premium keywords are often reserved by the registries, or carry a hefty registration and/or renewal fee, so to make a $5K sale you might have to spend $3K (as an example), thus taking a disproportionate risk
  
• domainers always focus on the reported sales, but they ignore the many more domains that have not sold - and most likely never will. In other words: there are hundreds of extensions. Even if a specific keyword has sold in a dozen TLDs, the odds are still stacked against you. At the same time, some extensions obviously fit the keyword better than others.

The problem is that some registries are competing against domainers and that there is no level playing field. The terms for us speculators are not favorable.

Anyway, my attempt to convince you is over. Thanks for reading, and thanks for your clear writing, even when I don't totally agree with the point you are making!

Thanks for being persistent though

 

[NYJimbo]

Not sure if you read the full post, but I point out that this is not just in ngTLDs. .

I try to dude, but a lot of your stuff is "TL;DR"

Not a dig against you, but sometimes your posts go on for 2 pages and its a lot to take in.

Regardless, I stand by my post that most of what you are seeing is solid word/TLD combos that skew analytics.

 

[bmugford]

Outlier

An outlier is an observation that lies an abnormal distance from other values in a random sample from a population. In a sense, this definition leaves it up to the analyst (or a consensus process) to decide what will be considered abnormal. Before abnormal observations can be singled out, it is necessary to characterize normal observations.

 

[Bob Hawkes]

I know I write at too much length! Sorry (comes from wanting to justify and give assumptions)

I think this excerpt summarizes my main point, and I think we agree solid word/TLD combos, just want people not to look only at past sales and extension.

"It is important to take a multi-faceted approach to any domain name valuation, looking at the strength of the term, previous sales in the term, previous sales in the extension, search and advertiser statistics, the aesthetics of the name, competition with similar names, and the pool of potential end users, among other factors."
​

from post here

 

[NYJimbo]

I know I write at too much length! Sorry (comes from wanting to justify and give assumptions)

I am not trying to diminish the value of your postings, its just that sometimes I cant read that much in one response and go all "Man, this post is just TL;DR".

 

[Bob Hawkes]

I certainly agree that ANY large sale is an outlier, although as @bmugford wisely and concisely reminds us you need to define what is normal before being able to decide what is abnormal.

I am not at all arguing against using past sales data. I spend at least an hour of every day on NameBio (I know, I should get a life). But past sales, especially past sales in extension, are not the only or necessarily even the best predictor of future sales.

 

[bmugford]

I totally accept that com the normal/abnormal is well defined since there are so much sales data. For even the top selling ngTLDs like top there is not nearly as much, so to some degree in most extensions there is no normal.

I am not sure if you noticed that I did talk about sales in com as well though. e.g. NameBio sales experience would perhaps suggest a 'sleep' name ending in 'ing' would perhaps sell for much less than it did, but a more nuanced look at the market and other factors arguably support the price.

"when Buckley Media Group sold sleeping.com summer 2018 for $502,225 that price exceeded the combined sales of all 251 previous NameBio listed sales that include the term 'sleep' anywhere (the next highest sale price was $14,888)."
​

(from my post, at very end)

Bob

I would say Sleeping.com sold for far higher than I would have expected, however there are many .COM sales for mid $XXX,XXX. So seeing a single word .COM sell for mid $XXX,XXX is not that far outside the norm IMO.

Brad

 

[JB Lions]

For some time I have been bothered by statements that the worth of a domain name is 'reg fee' simply on the basis of a limited (or nonexistent) sales record in that extension. Since I have been closely following the ngTLD sales for about a year and a half I have constantly seen cases where a high value sale represents a big jump from previous sales.

That happened again in the most recent (Sept 17) NameBio daily report, where smile in the direct extension sold for $7018 on Sedo. There had, before this, only been ever 4 sales in the extension, and the previous one was almost two years earlier and just $111 (can see the list here).

Now I know that the ngTLD sceptics will jump in and say it is a fluke and the purchaser paid too much (see I said it for you so you don't need to! ). That is a possibility, I readily admit, but I think if you take a multi-faceted detailed appraisal look that the price of the smile sale is about right.

I do such an analysis in this new post on my blog.

I also addressed the question of whether this was the only time a big jump happened. Some of the more dramatic ones I list below (there are many others, but I think these are the biggest jumps)

• When home.loans sold for $500,000, the previously highest sale in loans was just $7500 and there were only 4 previous NameBio listed sales at any value in the extension.
• When autism.rocks sold for $100,000 on Sedo in 2015 there had not been a sale at all previously in the extension.
• Vacation.rentals sold in late 2017 for $500,300. The previous highest sale in that extension was just over $1500, and even today there are only 5 other sales in the extension listed on NameBio.
• The .online extension has sold many times, but when casino.online sold for $201,500 in March 2017 the previous highest sale in the extension was just over $16,000 (there have been some higher sales in the extension since them, but not nearly at the casino level).
• The great domain name video.games sold for $183,000 in 2017. The next highest sale in the extension is only $1101.

Thanks for reading!

Bob

This is such a ridiculous post, addressed already, outlier. 1 reported sale in almost 2 years, then trying to make something of it. 1 sale is just that, 1 sale, not a jump. A jump would be something like when the LLLL.com prices went up awhile ago. That was pretty clear, you had hundreds/thousands of sales data to look at.

Let's just take a look at 1 you mentioned, autism.rocks that sold for $100,000 in 2015.

https://namebio.com/?s==UjM1IDM3gTM

Only 2 reported sales after that for a whopping, $100, $190. Outlier sale, just like this one.

How about the video.games that sold for $183,000 in 2017. Before that the biggest sale was $1,101. Was it a jump? Look at the sale after that $101. Outlier.

Again, these big sales are nothing but 1 person/company in the world wanting that 1 domain. Freak, outlier sales, many times by people have no clue of what domains are selling for. The buyers of that .loans or .rentals admitted that.

Somebody who is into statistics should know something about sample size.

 

[Domains - Wanted]

One other thing to add here about such outliers, flukes, no matter the extension... some of these may be financial transactions between business partners where the domain name was only an instrument, rather than the object of sale

Speaking from personal experience here, BTW. Due to their inherent valuation ambiguity, domains are a convenient vehicle for all manner of financial transactions. Seems I had been a little conservative in my dealings way back when (late 90's). Then again, had no support from such convenient Namebio listings back then

Great food for thought here, thanks @MetBob

 

[lambo.com]

I am not an artist. Is it possible for me to sell a painting of mine on a nice canvas for hundreds or thousands of dollars? Sure. I could put it on ebay, etsy perhaps and other marketplaces.

Is it worthwhile I do so? Not really, much like domaining, a lot of time would be spent and the chances of a sale are low.

This is the ngtld dillema.

 

[Bob Hawkes]

OK I will bite to reply, even though to some degree the discussion has gone from the OP (oh wait, that was me ) idea which was simply saying just because there are no big sales history does not mean that the next sale must be a very low value one, so lets set valuations looking at many different factors.

This is the ngtld dillema.

I actually would agree if you took out the ng and just said TLD. The statistics suggest that the majority are not currently successful in making money at domain investing (see a few posts above). Some are. But overall, no, it seems, most are not.

I am not an artist. Is it possible for me to sell a painting of mine on a nice canvas for hundreds or thousands of dollars? Sure. I could put it on ebay, etsy perhaps and other marketplaces.

i like your analogy with art actually quite a bit. Why I like ngTLDs (even though statistically the odds favour com and to some degree org/net/co/io and a few other TLDs) is that ngTLD are like my canvas. Through a creative and powerful combination of a term with a good match extension, you can produce something that is aesthetically pleasing and original. It can exactly say something with nothing unrelated to the function tacked on. I find that names like auto.loans, home.loans and vacation.rentals are brilliant because they represent good design and a new way to do something.

Do most works of art sell? No. Will the majority of ngTLDs sell. Definitely no. Does this stop people from painting? No.

A zillion domainers are each day searching for values in drops/expired/auction com and trying another go at selling the domain for profit. I am totally happy that so many people are keeping that market going. On NPs I congratulate them on successful sales, and I am genuinely happy for them. They fill a clear business demand. They help companies build strong brands. A few make good money. Many have incredible technical and negotiation skills, and the confidence that I do not have. I don't argue with them that they should do something new. I respect their choice. But that is not what I want to do.

Will I ever sell a home.loans? No. But from gritty.win to cozy.science, from tweets.today to blockchained.trade, from voila.fun to prospecting.space, I take pleasure in domain phrases that I created. Will they sell? A few yes, majority, not. I plan to keep painting, amateur that I am.

I suspect we will never agree, but thank you for your contribution to the discussion, and have a nice day. Thanks for helping me see that I am Bob the artist as well as Bob the analyst!

Bob
aka ngTLD artist

 

[gpmgroup]

It is really very simple most businesses need to be in .com / ccTLD because almost all their competitors are there and most of their potential customers expect them to be there too. We may personally see value elsewhere but the market will remain thinly traded until that perception changes, all ICANN's new gTLD program has done is reinforce that perception in the market.

ICANN employed a professor from the Chicago School to produce a report which was fundamentally flawed because it said entry would create competition, but when it was pointed out to them that domains aren't substitutable, ICANN ignored it. ICANN got to take 100s of $millions out the system so maybe they didn't need to care about building a better system, but the design of the current new gTLD system is so seriously flawed that it is very unlikely, unless perhaps there is a disruptive event, that there will ever be much end user value.

Don't get me wrong they're great for art projects and collectors but for the majority they hold little benefit and that means a thinly traded market. Most people looking to invest in domains would think fasting.com was worth owning. the only other exact match name of interest for my company other than fasting.com would be fasting.info but only a few others here think the same way. Which is great if you want to buy a .info but not so great if you want to sell one

 

[NYJimbo]

anomaly

a·nom·a·ly
noun
"something that deviates from what is standard, normal, or expected.​

You are citing anomalies in the sales of domains in new extensions. That is usually because of very strong word pairings or keywords with new TLD's.

Thanks for reading!

 

[Bob Hawkes]

But when dozens and dozens of anomalies, I wonder if we should really view them that way. I agree certainly that the odds of a huge sale, at any time, in anything including com, is low. But there are dozens of cases of order of magnitude jumps in ngTLD sales, so I am resistant to calling them all anomalies (although totally agree with you that it is arguable to do so).

Not sure if you read the full post, but I point out that this is not just in ngTLDs. One example I use is the summer sale of the sleeping (.) com domain name. If prior to that sale I look on NameBio at previous sales using the word "sleep" anywhere there are 251 sales, mainly in .com. But the total value of all 251 COMBINED is less than this one sale.

My argument is not to discount previous sales as one measure in an evaluation. But to over-simplify on only it is misleading. Thanks for your input.

 

[Bob Hawkes]

All you are pointing out are a handful of sales that are way outside the norm. That is like the definition of an anomaly or outlier.

Legacy extensions have sales in every price range. It is not like there is one sale of $500,000 than the next closest is $1,500.

That is far more impressive than some random, isolated registry sales. All it takes is one buyer, or sucker, in some cases. These sales are not repeatable, or really that relevant to a domain investor.

Brad

I totally accept that com the normal/abnormal is well defined since there are so much sales data. For even the top selling ngTLDs like top there is not nearly as much, so to some degree in most extensions there is no normal.

I am not sure if you noticed that I did talk about sales in com as well though. e.g. NameBio sales experience would perhaps suggest a 'sleep' name ending in 'ing' would perhaps sell for much less than it did, but a more nuanced look at the market and other factors arguably support the price.

"when Buckley Media Group sold sleeping.com summer 2018 for $502,225 that price exceeded the combined sales of all 251 previous NameBio listed sales that include the term 'sleep' anywhere (the next highest sale price was $14,888)."
​

(from my post, at very end)

Bob

 

[JB Lions]

"But a much higher sales price is fairly routine in the ngTLD world."

"I have constantly seen cases where a high value sale represents a big jump from previous sales."

It's fairly routine in every extension.

It's also fairly routine for a much lower sales price, see the examples I posted above.

Prices are all over the map. The sample sizes in new extensions are usually too small to make any conclusions.

"But when dozens and dozens of anomalies, I wonder if we should really view them that way."

It's usually 1 or 2, or very small amount, not dozens. See video.games. See autism.rocks. 1 in those extensions.

Sales over $100,000, using your examples:
rentals - 1- next closest $1,584
rocks - 1- next closest $190
games - 1 - next closest $1,101
loans - 1 - next closest $7,500
online - 1 - next closest $19,500

You used 5 different examples in your first post, only 1 sale over $100,000 for each of those extensions, the next closest sale, not even in the same neighborhood. All the examples you just used, 1 freak sale.

"Now I know that the ngTLD sceptics will jump in and say it is a fluke and the purchaser paid too much"

Because it's true, that's what the data tells us, that's what the examples you just used tell us.

 

[Bob Hawkes]

I totally agree that ngTLD prices are all over the map. By the way the "much higher" in the line you extracted, probably not clear from the short context, is than previous sales in that extension, not much higher than domain prices in general.

It is certainly true that the high price sales are dominated by com and will stay that way for the foreseeable future.

If one WERE to talk statistics, I think the only ngTLD extension that currently has a consistent and significant long term record of major sales is TOP (and it sells mainly only in one geographical region)
So far 2018 YTD on NameBio 435 sales with an average price of $4569
3 sales above $100k 2018YTD
28 sales above $10k 2018YTD
287 sales above $1K 2018YTD

A few others like CLUB have some long term record of significant sales. 2018 YTD on NameBio 73 sales with an average price of $5878.
1 sales above $100k 2018YTD
3 sales above $10k 2018YTD
37 sales above $1K 2018YTD

In the past XYZ had big value sales, and still occasionally. The GLOBAL registry sales have high average price, but not much reseller sales in that extension. ONLINE has a few large sales. The rest are largely scattered with as you note one or two big sales, and a smattering of small ones.

When I do my monthly analysis of ngTLD sales it is true that there are only a few large value sales. For example in the most recent report there were only 12 of the 167 sales in the 30 day period that were above $10k in value, and 69 that were $1k or more. It is still about a week before I will produce the next report, but I suspect there may be fewer large sales in it, unless a lot next few days.

 

[ecalc]

For some time I have been bothered by statements that the worth of a domain name is 'reg fee' simply on the basis of a limited (or nonexistent) sales record in that extension.

It’s worth noting that any given name has two distinct values, wholesale and retail, distinguished by buyer/seller motivation imbalance. Extremes occur when one party is desperate. Most names have $xxxx retail potential, music to registrant’s ears, while the same name is worth ‘reg fee’ or less wholesale including the subject smile name even after the $7k lightning strike.

 

[Kate]

Personally, I always try to consider the domain game in terms of statistical probabilities. I know that if I buy a .rocks domain, the likelihood of a sale is nil, regardless of past reported sales. A 100K sale means nothing to my bottom line. It is not actionable data.
Besides, those high-value sales in nTLDs are usually always registry sales. For domainers such sales remain elusive.

And you see outliers in ccTLDs. Not just .com & nTLDs.

 

[Bob Hawkes]

While separate from the main point of the thread, I did want to respond to this:

I would say Sleeping.com sold for far higher than I would have expected, however there are many .COM sales for mid $XXX,XXX. So seeing a single word .COM sell for mid $XXX,XXX is not that far outside the norm IMO.

Brad

At least in NameBio there are 230 .com sales at $500,000 or more (I took this as your mid $XXX,XXX meaning) out of 474,754 .com sales in total, or in other words 1 sale out of every 2064 are at this level. I would consider these outside the norm, but I don't wish to argue about the terminology. I know not all sales are in NameBio, possibly skewing the data.

If we look at ngTLD there are only 5073 sales in NameBio, of which 2 are at >=$500,000 (admittedly just barely at that!). In other words 1 for every 2563 sales, although number statistics with values like 2 are essentially meaningless.

Anyway, I found this interesting and thought I would share it. I don't think there is much of a lesson for domain investors in it except maybe to realize how rare those big sales we envy after are, and how impressive it is when an individual like Kate Buckley has several in one year.

 

[branding]

I know I write at too much length! Sorry (comes from wanting to justify and give assumptions)

Don't worry about it man. I personally like it as usually your posts are well balanced and a treat to read. Definitely beats the 'millenial' oneliners that get thrown around a lot

 

[ecalc]

... a great match is worth, at least retail, something in the $$$$ range.

I agree $xxxx is fair market retail value for the subject name. At the same time, if I see it dumped no reserve on NP or ebay aka wholesale, a $x sale won’t surprise me, nor will it tempt me but that’s a different story. The wide blurry bid-ask spread of domains rubs some the wrong way especially when talking about the low end but the opportunity to exploit it is the reason most of us are here.