Lessons from the Domain Name Aftermarket – TLDs beyond .COM

Phil Lodico ⬥ 15 June

The aftermarket is one of the resources we use to measure the value of domain names.  We recently decided to look into how the reported sales prices have trended across domains that have changed hands more than once over the past few years.  We found that roughly 30 total domain were sold more than once and were reported publicly.  Of those, only one domain name contained a “new TLD” (i.e., a TLD was introduced after the original group that included .COM, .NET, etc.): games.mobi.

Overall, we found that almost every .COM domain name experienced an increase in sale price from one sale to the next.  In contrast, games.mobi, originally purchased for $401,500 in 2007 according to Sedo.com, plummeted in value in the course of a year, selling for $44,000 in 2008, according to DN Journal.  Its aftermarket value dropped by a full 89 percent.  .MOBI domains first became available to the public in September 2006.  At that time, games.mobi was included in a list of premium names that then-registry mTLD had set aside for “equitable allocation,” meaning that it required the original registrant submit a request for proposal to obtain it (as opposed to being available on a first-come, first-served basis like most domains following the trademark “Sunrise Period”).  From the beginning, games.mobi was identified as a high-demand domain name, which makes its devaluation even more dramatic.

While it was only as complete as the public record of domain sales, this small study points out a few significant facts about the domain name space.  First of all, it shows that the value of .COM domain names has steadily appreciated over time; this is particularly true of keyword, category-defining domains.  It also shows that the public is not as concerned with the newer TLDs as it is with .COM, .NET, .ORG and others.  The fact that only one appeared in our list suggests that these names are not being bought and sold at the rate other TLD domain names are.  Generic domain names in TLDs like .MOBI get registered almost immediately by speculators, but seem to have very little worth in the aftermarket.

Once new gTLDs are released, there will inevitably be a land rush to register domain names in various extensions.  But what will those domains be worth further down the road? 

Tags: .com, .MOBI, aftermarket, appreciation, devaluation, DN Journal, domain names, equitable allocation, gTLDs, sales prices, Sedo, speculators, sunrise period, TLDs

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