There’s been two sales of domain names that have happened recently and both of them had me trying to read between the lines and see if there is more to them then meets the eye. I think it is a smart move for anyone to do this instead of solely relying on articles that are written because reading the articles puts you on par with everyone else who is literate and you always want to be one step ahead when possible.

The first sale was the sale of Media Options domains through Namejet. This was publicized on the Namejet site with one of their big rotating banners so without evening needing to do a Whois lookup you could tell Media Options was unloading domains. There’s two questions that instantly came to mind when I first saw this:

1. Why is a successful brokerage selling domains in a venue that is filled with resellers and not end users?

2. Why are they selling these specific domains and what does it say about these domains?

One group of people who have a very good pulse on the domain market are the large brokers. They are dealing with a steady stream of high quality domains and they are in constant communication with end users so they understand the end user sentiment better than any other group IMO. The domains that Media Options were selling through Namejet had a lot of high quality domains (good LLL.com’s in particular). So why sell them now at Namejet? My guess is that they believe the LLL.com market is at a peak. That’s not too hard to believe given that I’ve seen crappy letter LLL.com’s selling for high four figures consistently now. A year ago they would have been getting $3,000-$4,500. What can I take away from this? If I have any LLL.com’s that now is the time to sell them, and if I’m buying LLL.com’s then I may want to hold off a bit because I may be buying at the top if I buy today.

Secondly, why these specific domains? Do I think an established brokerage would auction off high quality domains without first attempting to sell them directly to end users. My guess is no. For myself, before I send a high quality domain to any auction I have exhausted my attempts of finding an end user for it. That doesn’t mean that an end user doesn’t exist out there, it just means I don’t have a high confidence level of finding one. If a brokerage is selling a quality LLL.com domain through Namejet I would assume they have done the reaching out and couldn’t find an end user. Because this is their 9 to 5 full time job they already have a solid contact list and more experience finding end users, so if they couldn’t find an end user for a domain then what does that say about my chances of finding one for that domain? Even though there were some nice domains being sold I personally stayed away from buying any because of both reasonings I came up with.

The second sale is this BuyDomains sale of 950k+ domains for a price of under $50 a domain. Unless BuyDomains needed cash quick, or unless the portfolio was filled with complete trash, this sale is pretty troubling if you’re a domain investor. Having a million domain portfolio gives you a look at lots of useful information and a gives you a good beat on the aftermarket. What is the average selling price now compared to the past, what is the number of inquiries coming in now compared to the past, what is the close rate now compared to the past, etc… I would assume that a lot of these statistics came into play when BuyDomains was calculating how much they’d let their portfolio go for and if they were happy with less than $50/domain on average that is not a good sign. When I think about this in the macro sense of the domain market I may now be more inclined to accept a $2k offer on a domain instead of holding out for $4k as an example. There’s quite a few levels of thinking I’ve done about this sale and I’m not going to share them all here, but if you see something like this and you’re not questioning what it means in the market and what it means for you then you’re going to fall behind.

Whenever I see a solid domain on Namejet with a reserve price I do a Whois lookup and I have seen quite a few well known names selling their domains on Namejet. I personally think the gTLDs have a lot of people spooked. I think domain investors are questioning now what impact on .com prices will the gTLDs have. And what impact on demand they will have. I personally think very few gTLDs will find long term success. I think that people won’t be able to remember if that new site was Car.deals or Car.NYC or Car.directory or Car.online or Car.web. Too much fragmentation in an already fragmented internet. There may be some short term pressure on .com domains until it all shakes out and the market can begin to see a clear direction but now may be the time to start placing all your chips down on one direction or the other if you want to try to cash out big in the next five years.

22 comments on “What is the Domain Market Telling Us?

  • Nothing new or strange here.
    People have been unloading unwanted domains for years.
    And by unwanted I don’t mean bad domains.
    People sometimes need liquidity for one reason or another.
    e.g. I want to make a 5-figure domain purchase in 2 days.
    If you can’t find an end-user you put the domains in auction and move on.

    “Unless BuyDomains needed cash quick, or unless the portfolio was filled with complete trash, this sale is pretty troubling if you?re a domain investor.”
    Probably a combination. I think the sellers wanted to sell and I am sure that buydomains has a lot of trash.

    In both cases many people get tired of a modest earning and want to unload for a quick and effortless big payout.

    • @Konstantinos

      I could understand a liquidity thing if that was the answer. It just seemed strange to me for high quality domains to be sold this way.

      • I have not put any of my domains on auction but I have thought about it.
        I might try it some day.

        Media Options could have a lot of customers with 1-2 great domains only each.
        There are a lot of people like that and they don’t want to wait 5-10 years to find the right buyer.
        If sellers say “we want the domain sold in 2014” this is what happens.

  • “I think that people won?t be able to remember if that new site was Car.deals or Car.NYC or Car.directory or Car.online or Car.web.”

    I believe that is a bold assumption to make about consumers. I think the majority of tech savvy consumers will remember the gTLD extension of their favorite websites. Angel.co has thousands of visits each month, and I can remember when people were saying don’t build a site on a .co because you will bleed traffic to the .com.

    • @Patrick

      If there will eventually be 1,000 gTLDS you don’t think that even the tech savvy consumers will get confused? Maybe not if a site is one of their favorite or most used sites, but if it is a site they visited once, or they saw an ad on the drive home and were trying to remove the site, etc… I agree, a huge site will be remembered, but what about the other 99.99% of sites?

  • I feel the buydomains sale likely has more to do with PE wanting to cash out. They may see the writing on the wall and not want to be invested in a risky deal this long. Get your money back to invest in larger/quicker returns. A PE firm isn’t in the business of sit and hold like a domainer.
    Keep in mind Oversee also sold all of their domains and domain sponsor platform recently as well. . . . likely the same reason . PE.

    Re: media options and other brokers selling on name jet. They’ve been doing that for awhile; like Constantine says it’s nothing new. Other domain investors like findyourdomain.com, lease domains, etc have as well. There’s been a constant stream of “investor” names going through NJ for awhile now. NJ provides a nice liquid marketplace

  • First off, I want to say that I think you should have reached out to us (Media Options) for comment before speculating on our business, intentions or motives. I’ll address that hear and now:

    1. First off, Media Options has NEVER marketed our owned and operated domain names to end-users. Never. Not even once. We spend our time, energy and resources selling our client?s domains. That is a fact. That is a policy. It has never changed. When we do sell our names, it is only when we are approached by and on an inbound inquiry or we actively put them in an auction, most commonly Namejet, although we have experimented with others as well. If you buy a domain from Media Options on Namejet you can be 100% certain that this domain has been on the ?sideline? so to speak. It has NEVER been marketed to end-users. It has NEVER been shopped around in the aftermarket or on forums (unless that is where we bought it ourselves). Much to the dismay of many other active buyers in the aftermarket we rarely sell our names to other domainers.

    Media Options has been selling domain names on NameJet for at least 3 years (maybe 4). We have always done so privately and without promotion, banners or marketing of any type until recently when we decided to “brand” our auctions via Namejet. We want to act as a ?curator? for these types of auctions which benefits all parties involved. We bring more attention, publicity & ultimately buyers to a Namejet auction than an individual seller could achieve themselves merely for th fact that we sell such large volumes on NameJet and make investments into the promotion of those auctions. Yet but sellig through us and allowing Media Options to manage your auction, you pay the same commission you would as if you went direct to NameJet. Media Options was the first and only domain broker to be given an agreement to sell 3rd party domains on NameJet, meaning we were selling client’s domains in addition to our own owner operated domains. That has very recently changed and some others have followed suit, but I think it is important to emphasize that we were the first. The majority of the large sales you have seen on NJ from Media Options are client names such as: LOV.com, OAI.com among others. But yes, we also sell our own names as well. Media Options is going to be making an announcement very soon about some entirely new domain brokerage products that we are going to be offering to our clients and the domain market at large. Much more in line with a domain sales manager / sales lifecycle manager, offering the highest opportunity for anyone to sell their domain at the highest possible price the aftermarket will pay at any given time. NameJet auctions will be one component of this offering.

    2. Media Options only does end user brokerage on domains that we feel we can sell for at least $75,000 (occasionally we make exceptions) and in most cases $100,000. These are NOT the domains we sell on NameJet. We do ?end user brokerage? the old fashioned way. We make hundreds of calls and send hundreds of emails and knock down doors to find qualified buyers for our client?s highest value domain names. Our End User brokerage is entirely separate and independent of our aftermarket or ?wholesale? operations (which is what is mostly being discussed in this comment as well as the article to which it pertains).

    All other domains which don’t fit our “end user” criteria are marketed and sold using our Media Options Domain Newsletter (the longest consistently standing domain sales newsletter in the industry), social media, marketplace and website which receives thousands of qualified visitors every day.

    In case you have never checked, Media Options ranks in the top 3-5 organically in Google for “Domain Broker” & “Domain Name Broker”, among many other terms. This visibility drives a tremendous amount of qualified leads and helps us sell our client’s domains very effectively. The only companies that come close to the PR, SEO & organic search traffic investment that we make are SEDO and GoDaddy, both of which we do not consider competitors as they are much larger companies and do not operate much in our specific niche.

    3. Media Options has been one of the most aggressive “traders” in the LLL.com market for years. By trader, I mean that we are constantly buying and selling. In fact there are probably only 3 other buyers in the domain aftermarket who have bought, sold, brokered & traded the amount of 3 letter .com domains (2 letter .com domains as well for that matter) that we have over the last 2-3 years.

    At the same time that we are selling some of our LLL.com domains on NameJet, we are also BUYING MORE! For every one LLL.com we sold on Namejet over the last six months, we have bought at least three more. In fact, in the last 30 days alone, we have acquired nearly 20 super premium LLL.com domains. We have in fact, over the last 60 days (or less) invested $900,000 of our own capital into the acquisition of premium .COM domain names (with a few exceptions like yt.org, vr.net & rw.org). Just to name a few of our acquisitions, we have bought: Blood.com, SRE.com, Frozen.com, RainDrop.com, Diw.com, Atlantico.com, PX.net (we already own PX.com), TRO.com, Flap.com, BER.com & hundreds more!

    4. Some people have mentioned to me that they feel Media Options buying & selling operations are a conflict of interest with our brokerage business. I would in fact argue the exact opposite. Most other brokerage firms in our business have a strict policy against buying domains or maintaining an owned & operated portfolio. Of course Frank Schilling?s Domain Name Sales is one of the few exceptions (seems to work just fine for them!). Our regular trading activity gives us a unique insight into the current domain aftermarket which few individuals in our industry have. I can name on 2 hands the number of individuals in our industry which are what I would consider highly active and aware in the CURRENT domain aftermarket. People that can tell you the ?spot price? or value of any name in today?s market if you need to sell. Not because they are clever, but because they are buying and selling domains in that market every single day. There are plenty of people who write about the aftermarket. Plenty of people who offer advice about the state of the aftermarket. There are brokers out there offering up ?white papers? and knowledge bases and articles containing their speculation about the current state of the aftermarket and values of certain types of domains. Most of it amounts to just that, speculation. It serves two purposes: click bait & attracting sellers by telling them their domains are worth far more than they actually are in reality.

    As Media Options? CEO, I make buying and selling decisions on a daily basis both for our clients and our owned and operated portfolio. I am trading domains every single day including Sunday. I can tell you today what your domain is worth in the aftermarket and the answer I give you will be different than the answer I would have given you a week ago; because on a micro level, the market is in a constant flux.

    We always sell domains on Namejet to make sure we have the most recent and REAL market data. Any broker can tell you whatever you want to hear about the value of your domain. I can tell you the truth. I can tell you exactly what your domain is worth TODAY because we probably sold something similar yesterday and bought something else the day before that.

    I am not writing this to compare our brokerage business to any other. I think the way we operate is unique; it?s not for everyone. What my intention is from this epic comment is to set the record straight about our motives in selling domains and the current state of the domain aftermarket. The aftermarket is alive and well. In fact I?m more bullish on domain names now than I have been in the last 18 months. There has been a lot of speculation about domains and their future. There has been a lot of speculation about what would happen to .com in light of 1,000 new gTLD?s. There has been a lot of speculation about the domain name system and how we navigate the Internet in general. In my eyes, and in the opinion of many other smart people in our business that I trust and look to for advice, many of those questions have been answered and a clear path has been laid out as to the way forward and how all of this is going to play out. That path is paved in gold!

    I have never been so bullish on domains. I have never seen such a rise in domain values (good domains, premium .com domains) ever before in history. Some call it a bubble, I call it an awakening. Rick Schwartz had a 20 year plan and it is no coincidence that the end of the rainbow is 2015. It is going to be an exciting year and those who are sitting on premium domain names are going to be rewarded. Those who are not , are going to have a much higher cost of entry to the party if they want to come and play. Bubbles are built on credit. Bubbles are built on speculation. Neither one applies here. There is no meaningful form of credit in the domain industry, domains are paid in cash which puts a floor on the value of nearly all domains except in that rare occasion that someone NEEDS to sell fast. But that is an exception, not the rule.

    Speculation insinuates that there is no precedent. It means that the market is guessing. Well, I can say without a doubt that guessing and luck have nothing to do with what is happening in the current domain market. Prices are rising and it?s because there is more light than ever being shined on the domain industry as a whole as a result of new gTLD?s and that is only going to continue in hockey stick growth. There is more money flowing in from outside than ever before. There are more people online than ever before. There are less available premium .com domains than ever before. There are more businesses that require a web presence than ever before. More local companies in foreign markets are expanding their businesses globally than ever before and .com is still the most important domain extension to do so.

    What do I think about new gTLD?s? I think it?s too early to say. Anything I say is speculation just like anyone else and I don?t speculate. Nobody knows. Nobody. But what I do know is that it?s an interesting proposition. It?s a interesting supplement to the existing naming framework. It offers endless new branding and naming possiblities to those that can?t afford to pay the real value of a premium .com. I think it?s foolish for anyone to speculate that new TLD?s of any sort will be worth more than the corresponding .com. But I also think in some unique examples there is potentially more value, but again, exception, not the rule. Most importantly, I think there is plenty of room for everyone. Plenty of room for new gTLD?s. In fact, I think new gTLD?s are the best thing to happen to .com! A rising tide lifts all boats (as long as your boat doesn?t have a leak)!

    In summary, I want to be abundantly clear. We, Media Options, are highly bullish on .com domain names. I am confident that values are only increasing on premium .com domains and I currently see no obstruction to that growth beyond ourselves. Be it short domains like LL.com and LLL.com or brandable generic keywords; they are all going UP! There is less certainty with long tail domains, however, I must say, and certainly more pressure on .net & .org domains as more options become available. If you are not the first choice then you are only as good as other available options and now there are many.

    I want to be clear that when Media Options sells domains on NameJet, it is because we are constantly testing the market. We are constantly looking to validate our price assumptions. We are constantly questioning our decisions and opinions. We are constantly putting our money where our mouth is. We are not scared of the market and we are not liquidating. Far from it in fact.

    Lastly, Media Options is a NET BUYER, NOT SELLER. 90% or more of all of our earnings from domain name sales & brokerage operations are re-invested into further domain acquisitions. If you go to the guys I call ?domain chasers? or suppliers, the guys who are every day tracking down original owners of old domains in order to buy them for a quick flip, and you ask who are your biggest buyers, nearly all of them would include Media Options on their list. We are quiet. We are private. We are discreet. We do not flaunt our domain purchases, nor our sales. We help provide liquidity in a completely illiquid market. We help set a FLOOR on premium domain names in the ?wholesale? market. This gives us the ability to intelligently advise our clients about the value and marketability of their own domains. It tells us who the buyers are. It tells us who the sellers are. Most importantly it provides us a perspective into the domain market that few on Earth have because quite frankly, they don?t have skin in the game.

    • @Andrew

      Two things concerning your comment:

      1. Come on, seriously? I don’t think there was a need to reach out as I am sharing my thoughts on a public auction. I don’t present my thoughts as facts, but clearly as my own thoughts. I’ve commented numerous times before on the outcomes of auctions and have not had Sedo, Snapnames, or individual domain owners take issue with it. We are all entitled to freedom of speech, right? There’s nothing derogatory about your business, just my personal thoughts on why a successful established brokerage would be selling in a reseller marketplace. I think anyone investing in domains would be interested in thinking about this. And not for nothing, if there wasn’t the banner plastered up on Namejet I wouldn’t have known whose domains they were because I don’t spend time doing whois lookups, so if you don’t want anyone talking/commenting about it then you should use more discretion.

      2. I do not understand your point “I want to be clear that when Media Options sells domains on NameJet, it is because we are constantly testing the market.” Why do you need to sell your domains on Namejet to ‘test the market’ when Namejet (along with many other places) publicly report sales each month? I would guess you are not in the business of leaving money on the table so I still don’t understand why you’d be selling high quality domains on Namejet without testing richer buyers first, I don’t comprehend this explanation you gave.

      I don’t have anything more to say on this. If you don’t want me to write about your company again in the future I will honor that because I barely write as it is and I don’t have the time or desire for back and forth.

      @Adam

      Ok, so if multiple established places are selling their domains through Namejet does that say anything about those specific domain names? Every business is in business to make money so would it be logical for businesses to sell their assets in a reseller place without first trying to sell them to an end user? I think this is a logical assumption and honestly this is what I do, I don’t sell something in an auction until I’ve exhausted my attempts to find an end user.

      • Andrew answered for himself about this but I don’t think it says anything about the names. Is it happening at a time where you can correlate that to being “spooked” sure, but my point was to say that this has been going on for awhile. If others weren’t doing this before than maybe this isn’t business as usual and people are “spooked”.
        If Andrew is not doing outbound and these are O&O names, he moves them quick for liquidity and concentrates on higher end names for clients. Makes sense. FYD doesn’t do outbound either. It seems these sellers are just taking names to get quick liquidity. This market really needs a source for that and NJ seems to be leading the way there. Shane Cultra talks about doing this on his blog. He doesn’t seem spooked by new TLDs to me.

        I think it was a pretty safe strategy to think “Maybe this name sucks because here is a guy who is a broker selling this in a wholesale market . . . he probably exhausted all efforts in selling it retail and didn’t get a buyer” I’ll sometimes search a name to see if the broker marketed it that way. If your only game is to flip a name like a broker would, then it’s safe to make that call. There are buyers that still buy and know that a broker is looking to sell for a quick profit not for a long term hold necessarily and they may still be making money on the wholesale sale price. Don’t doubt that Andrew isn’t. I’m not sure what name you saw though so who knows. I’m sure Andrew could convince you that it’s a great buy 😉

        I think you’ve made a jump to a conclusion with Andrew’s activity and the Buydomains sell off that looks logical on the surface but really aren’t tied together. A birds eye glimpse of a market doesn’t take in a lot of factors. It isn’t necessarily all tied together. Lastly, you could also lump in a 3rd point in your article and say that the Web.com comments and earnings report show that people are “spooked”. I’ll tell you from my viewpoint again there’s often a lot more to each story. One important thing is the people. Andrew gave a pretty detailed “Why” about his decision to use NJ and I think it gives a better view of the market. BTW, I’m buying too. 2 of us aren’t spooked so the rest of you who are spooked please email me your names before you send them to Andrew. 🙂

  • I try to avoid giving my business to above companies who compete with me in the drops on a daily basis, more firepower in their war chest, better to fund brokers who are just taking the funds, and moving on. Just my personal choice, nothing against the company, they run a fine show.

  • @Chris

    I don’t have any problem whatsoever about you writing about Media Options, please do not think that is my intention. It’s your blog and you can write when and what you want. When we sell domains on NameJet it is public and as so anyone can write or talk about it.

    What I don’t appreciate is the speculation about WHY we are selling on Namejet and speculation about our practices as a broker. You made some strong accusations and assumptions and in professional journalism you would have asked us for a comment before publishing such statements. My issue is that right now there are a lot of people who are confused, scared & looking for information to make decisions. If you spread mis-information it fuels the fire and makes people more confused. They make bad decisions. Honestly, I think it is irresponsible. But as an independent blogger you don’t have to answer to anyone so that’s fine. But if you are WRONG in what you write you need to be called out on it and the record needs to be set straight.

    Anyhow, keep up the writing and observations but remember that people are making decisions, financial decisions, based on the information they read so as a known publisher your reputation hangs on “getting it right”.

    • @Andrew

      Thanks. I don’t think anyone views this blog as an authority (or they shouldn’t if they do). It is a hobby whose content is 99% personal opinion. As always, everyone should come to their own conclusions about any decisions they make.

  • Well written article, nothing is ever as cut, and dry as you see it. Nobody sells great domains in public auction on a domainer based platform that have endless platform without having any insight at all simply to gauge the market.

    Always good to shake ideas up, look what happend on wallstreet when people stopped asking questions. Not sure why anyone has any issues with a well educated domain investor speaking their mind.

    Look at the escrow business, to be frank, it is always good to have somebody to compete with to hold you to your standards of service, and make you want to do better.

    Well articulated article, the ones with an agenda never agree, so you can’t win them all.

  • Doesn’t NameJet only allow certain accounts to sell names? Don’t they also have a minimum opening bid of $69 on all sales? To me, that is the known price to liquidate a name for those that are fortunate to be able to sell a name there. it is also similar to an exchange where membership has it’s privileges. So, does Media Options have 2 divisions? One account as a principal and one account as a broker? Does the principal account only sell names from inbound inquiries or could they appear in the newsletter, an outbound email/phone call or advertising piece?

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