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Domain Appraisal

Understanding Domain Appraisal: How much is your domain worth?

Understanding domain appraisal is important because domain names are a crucial aspect of almost any type of endeavor. A domain name can help define a business; it can be synonym for people looking for a particular niche. Using the right word or phrase to describe a venture is, in many ways, an art form in itself. It requires in-depth knowledge and vision of what it is you’re trying to achieve with it. For this reason, certain domain names can become very valuable.

Domain appraisal basically refers to how much a domain is worth. The value of a domain will ultimately be determined by how much others are willing to pay for it. However, there are a number of traits that will usually help determine if a domain name is valuable. These include its length (shorter names are usually preferred), language, extension (.com tend to be the most sought after), and other factors. 

If you own a domain that you think may be valuable to others, it can be challenging determining its retail price. Certain companies will pay up to six-figure amounts to acquire a domain name that suits their business profile, so how can we determine the appropriate value of a domain?

A common way to do this is through domain appraisal services; a popular site is The site allows users to submit domain names, providing an estimate of how much the domain may be worth. is a free of charge service that uses algorithms to determine a domain’s Alexa rank, keywords, number of searches, and various other characteristics that help evaluate the domain’s financial worth. The site also includes numerous tools for domainers and webmasters, as well as information on the domain market. also allows users to search for mass appraisals of domains with over 100 TLDs. 

As mentioned earlier, the .com extensions are often preferred and tend to be the most valuable domains. Regional TLDs such as .uk or .ca may also become sought after, but nevertheless the number of potential buyers will be significantly limited.  Short domains are also considered valuable. Usually, the shorter the domain name, the most valuable it will be. Effective and to-the-point keywords can also be a strong factor in determining the value of a domain name. A domain titled “” would likely be preferred over “”.

Ultimately, you need to understand how your potential buyers think in order to understand your domain’s value. You need to understand their field, their market, their potential buyers and audiences. Finally, knowing how much related domains are priced at will help you determine your domain appraisal value.

Domain Inequality

The inequality topic is all over the media right now and we wondered how is wealth distributed among domain owners?
Since we have all the data available at Domainindex we decided to spend some time to put this together and find out.
First a little disclaimer about the way we crunched the data, one of the most challenging tasks was to find out the top 10 and 100 owners. Only because we know many of them and we know how and where they are registered we have been able to figure out which domains belong to whom. The data is not perfect but we believe the quality is acceptable for such a statistic.
About men and women ownership we used the first names in a very large sample. The total of domain names also includes free domains and many subdomains that also have value. The number of pay for domains without subdomains are around 260 Million as of May 2014. One more thing to keep in mind is that the values used are the ones from Domainindex and we do value Trademarked domains as well because we believe they do have value and some of them have very high value which ads to even more wealth concentration.

There are 2 facts that we found especially interesting: 

1) The high concentration of value in the first place, it clearly shows what we have been thinking, that the majority of good valuable domain names are in the hands of few. 

2) The number of unique domain owners is 58 Million persons, if we leave aside free domains and subdomains, the number even sinks to 52 Million and I assume that many people even use multiple ID´s to register domain names, so the actual number might even be lower. So what that means is that on a global scale, few people actually do own domain names. Much less than 1% of the world population, much less than Facebook users, twitter or even, whatsapp or Instagram users. It still looks like we are far away from promoting domains really to the public.

Will ICANN change the internet forever by using Bitcoin algorithms?

by Benjamin Guttmann, author of "the Bitcoin Bible"

Many domainers are big bitcoin fans, looks like even ICANN is now in the Bitcoin fever.

In a draft ICANN Report released late last month, the organization spokeof algorithms like Bitcoin and the future ofan Internet not controlled by the US Government. This could mean that theorganization is exploring the possibility of a global multi-stakeholder accountability process instead of thecurrent situation of the United States Government in the Internet’s uniqueidentifier system, meaning the US Government would relinquish their remainingcontrol of the Internet, and transfer important technical functions of theInternet to the global Internet community.

Presently, the government’s current responsibilities include the role ofadministering changes to the Domain Name System’s (DNS) root zone file, whichis the database of top-level domains (.edu, .gov, .mil). Additionally, the USGovernment also oversees the historic data regarding unique identifierregistries for Domain names, IP addresses and protocol parameters.

The solution might be to use similar protocols as in the encryption of Bitcoin transactionsand the idea of an undependable “blockchain”. 

This would transfer all power to the users.

from the ICANN draft:

“Is there a technical way to think aboutsharing control over the root? Some theories have been advanced. One school ofthought is that data should have N multiple signatures. And thenM/N, signatures are required to authenticate the data. Of course there arearguments about M and N, and whether different crypto is needed/desirable.

It’s not our intention to argue for aspecific system here, but we do feel that a good design could allow thepolitical process of deciding how control should be shared to start. Our visionis the creation of a toolbox for shared zone control, not only for the root,but also for other zone coordination problems.

We note that the DNS Operations (DNSOPS)working group in the IETF has two proposals for coordinating DNSSEC signinginformation, but wonder if it might be better to create a general facilityrather than a solution to this point problem. Coordination of forward andreverse addresses might be another application.

The participants could then each do astandard algorithm to generate consistent state. This might seem like afantasy, but Byzantine algorithms like Bitcoin [Andreesen 2014] and Namecoinshow that such systems are possible today.

(Note that we aren’t proposing the rules,just a distributed system for implementing whatever rules the community wants.)” 

More about this at ICANN


Heritage 2nd Auction: List of domains appraised

The second Heritage Auction, organized by Aron Meystedt is under way. Under the title "100 Great Branding Names", Heritage has put together an impressive list of names that will be on auction until April 9, some of them very well priced. We have appraised the list of 104 domains for you. 320

So are new gTLD´s a success ? or not ?

On the first day 19.163 new gTLDs got registered while .com had 99.000 new registrations on the same day as it was just mentioned in a post on "the domains"
However this is not really the numbers to compare I think, what we need to look at at is something else:

How many new gTLD´s have been registered compared to the affected .com domains.
So these are the numbers to watch in my opinion:

55.000 Domains contain "guru"
80.000 Domains contain "holding" or "holdings"
90.000 Domains  contain "ventures"
65.000 Domains  contain "plumbing"
45.000 Domains contain "singles" or "single"
75.000 Domains contain "bike" or "bikes"
115.000 Domains contain "clothing" or "clothes"

(in any extension that must be paid for)

So this gives us a total of 525.000 Domains that contain the keywords launched in the last days as TLD´s.
I think here we start to compare apples with apples because the 7 new extensions are indeed generic but only in a very limited area of keywords.

So purely based on domain numbers they did reach about 5% of what all other extensions did over 25 years in one day
Based on revenue it looks even better, the average customer pays about 12 USD/year for all other extensions on average, while my guess is the average customer pays 45 USD for a new gTLD. 

This means:
900.000 USD for new gTLDs / year
6.5 Mio USD for all other extensions /year

this is a market share of about 12% after one day.

I find the number of 20.000 registrations for the start of 7 new extensions relatively low, however I must say the process has been managed extremely bad in my opinion by registrars, in fact only Godaddy was able to make this a good experience for the user, many other registrars have not even been able to let one register new gTLD´s. 

Also it is not fair to compare to other gTLD launches in the past due to the keyword space affected.

Businesswise however this is certainly a success, it will depend how visible these domains will be in the future, will we ever come across a developed one, or will it be like many other extension where I have never ever seen any developed domain name.
We will have another look at the numbers in a month, then we will know more.  

Michael Marcovici

Heritage Auction Domain Names appraised

Most of you will have heard about the current domain name auction by, heritage auctions, the auction has already been promoted in the mainstream media including the New York Times. Certainly for domain investors this is a special occasion because for the first time such an auction happens completely outside of the domain world.
To give domain investors guidance, we have appraised carefully all the domains in the auction (a good number of names are currently still priced much lower than the appraised value):    18.400    5.500    1.510    21.500    1.990    270.000    6500    25.000    8.870    120.000    20.000    25.000    16.100    3.800    8.090    3.000    4.690    8.000    3.750    20.000    5.000    41.700    38.600    60.000    6.500    8.174    32.000    550.000    3.300    30.000    7.500    500    1.750.000    4.500    4.500    12.600    240.000    6.700    1.910    500    380.000    14.700    8.310    112.000    4.840    2.550    2.000    4.500    1.010    71.500    4.000    1.300    120.000    7.940    172.000    988    7.500    9.780    9.500    8.660    9.300    1.040    1.070    6.300    575.000    3.770    3.100    110.000    8.650

we hope this is helpful for you, if you disagree please comment, we will take a closer look if necessary.

What we learned from .ORG about new gTLD´s

Since everybody iscurrently trying to figure out if new TLD´s will be a success or not, toregister them or not, which ones one should invest, I might have an interestingobservation here for you. 

Domainindex was recently asked to perform a research among companies andorganizations for a customer on various domain related topics and one of thequestions was about the interest of companies and organizations in their .comdomain name (which they all did not own). 


So we contactedcompanies and organizations operating with a ccTLD (in 11 different ccTLD´s) orgTLD (in 7 different gTLD´s).

We selected from alist of 3 Mio domains and reached out to about 17.000 companies andorganizations, we made 5500 calls with the owners or at least the person incharge for domain acquisitions (yes this was a big operation for us).


So these are the results:


In the ccTLD, all Ican say is that the interest was high in the .com names but there have been theusual reasons why they have never been able to get it (to expensive or anothercompany of the same name on it etc.)


The owners of domainsin .info,.biz,.co,.asia,.eu usually are very small businesses, they would version of their domain name, however they are not even willing to paya few hundred dollars for their .com which usually would cost in the thousandsor 10,000, so far so good. 

Amazingly it turns out the .net zone contains an incredible high number of verylow quality sites, I always had the feeling it's lower quality but afterevaluating the top 150, domains by European and American traffic I mustsay we have been amazed with the extremely low number of quality sites 

Very different is the .org zone, first of all the quality of sites in generalis very high. The density of quality organizations and businesses among the top150,000 .org domains ranked by international traffic was higher than in anyother  gTLD or ccTLD (besides .com). We found 25,000 reputableorganizations and businesses. What was really interesting is this: aftercalling about 500 from the top .org sites that do not own their .com domain itturns out that they are all perfectly happy with their .org domain name andhave no interest in 

What that means to me is that those new gTLDs that really succeed to brandthemselves as something special, within a community or a particular kind of organizationhave great chances to become popular and successful up to a point where theircustomers might prefer the .org over the .com version. But it also shows thatthose that do not succeed will be populated with spam, porn and low-qualitysites. 


New tools preview: Leadgeneration

In the last six month we have been working on a completely new suite of leadgeneration tools for domains and domain related services. We plan a total of 15 tools, 4 are under development, 6 are in beta and 5 will be released within the next days.
The 5 tools we will release will be:1) Zone based leadgeneration

1) Zone based leadgeneration

2) Name based leadgeneration

3) Keywordbased leadgeneration

4) Advertiser based leadgeneration

5) New gTLD leadgeneration

You can see the screencasts to have a first look at the tools. The tools are all high performance tool, capable of generating millions of leads and especially able to find the very best leads based on the type of domain you intend to promote. They are capable to find leads based on keywords from websites, from names in the whois, yellow pages and similar sources, based on advertisers keywords in 8 advertising networks including Google and much more. Tool Nr.6 will enable to market SEO domains based on similar backlinks.

In the last months we all have seen a significant increase in unsolicited emails promoting the purchase of domain names and lets be real, this will not stop, there is a working market for the promotion of domains via email and nobody can stop it.
Our goal is not to add even more of these emails to your inboxes but to decrease the amount of emails by increasing the quality, we have therefore taken some measures to: 

-Encourage promoters only to use the very best leads for their domains
-We strongly encourage users not to send any mails to owners using privacy
-We have removed all known domainer addresses from the database
-We have removed everyone that has larger portfolio from the addresses (depending on portfolio value)
-We do not allow multiple mails to the same person for the same domain from different promoters/users
-We handle unsubscribes across all users.
-We verify every email address

The tools will be available to all subscribers and the amount of leads that can be generated will depend on your subscription level. If you wish to make use of this tool at quotas above the usual subscriptions get in touch with us and we will give you a custom plan according to your needs.

What is going on with the 100 oldest Domains ? just completed a research about the oldest 100 domain names. The particular research was mainly about the usage of the names over time, name server and owner changes as well as SEO aspects that can be attributed to the age of these names and the various uses they had over time.
Part of that work was to research the current status of the domains. This part we would like to share with you because it looks quite interesting:

From the 100 names registered between January 1, 1985 and November 30, 1987:
58 are now owned by a different entity from the one that registered it
35 are owned by Fortune 500 companies
7 are owned by pioneers of the web

Of the 100 oldest domains:
12 Do not resolve
4 are Parked
84 are in use

1 was subject to a UDRP (

These companies hold more than one of the oldest 100 domains:
3 Oracle
3 Verizon
2 Northrop Gruman
2 Intel
2 Siemens
2 Raytheon

These domains do not resolve or are not in use

These are parked

These Domains look like being owned by domainers

These are active and belong to Fortune 500 companies or large entities

These domains still belong to pioneers of the WWW, the same people that regstered them

These companies, that used to own the domains are out of business or merged (symbolics inc.) bankrupted  in 1995 (thinking machines Corporation) bankrupted in 1994, the domain is owned by Oracle and redirects to their thinkquest sites and Computer Consortium - MCC) dissolved i 2004, the domain is parked (Grebyn Corporation) not in use anymore, but seems to be owned by the same company that registered it, the domain does not resolve ( online community of the early 1980s) dissolved in 1988, it points to (rosetta consulting) unknown when but went out of business, the domain is used by a new business today (Datacube Inc) went out of business in 2005) the domain now hosts a domain market (Kendall Square Research) KSR went out of business in February 1994, when their stock was delisted from the stock exchange, the domain belongs to a new company today (W.L. Kennedy Jr. & Associates) company cannot be found anymore, domain is owned now by westlake chemicals (KC Computer Sciences) seems to be out of business since the 90ies, domain does not resolve seems to be owned by a domainer BBN technologies was acquired in 2011 by Raytheon and points there (Digital Equipment Corporation) aquired by compaq in 1998 Corporation) aquired grumman in 1994 and reformed under northropgrumman (Bell Communications Research, Inc. or Bellcore) now belongs to Ericsson (Sun Microsystems, Inc) in 2010 taken over by Oracle (Ungermann-Bass, also known as UB and UB Networks) aquired in 1988 by Tandem Computers, not in use ( Bell Atlantic) merged with GTE in 2000 to form Verizon, the domain does not resolve (Interactive Systems Corporation) sold to Eastman Kodak in 1988, the domain is now owned by a new company (National Semiconductor) sold to AMD in 2003, the domain is not in use (Pyramid Technology Corporation) bought by Siemens in 1995, now it's used by a completely new company (portal communications) was aquired by oracle in 2006, the domain forwards to (Cognition, Inc.) went out of business in the 90ies, the domain was bought by an investment firm (probably used by Digital Equipment Corporation for the DEC Alpha Chip series) now used by a real estate company (Braddock, Dunn & McDonald) a military contracting company, in 1997 purchased by TRW and in turn aquired 2002 by Northrop Grumman (Intermetrics, Inc.) merged with Whitesmiths Ltd in 1988, after many more mergers its now owned by L-3 Communications was a pioneering game developer and online game publisher, founded in 1981) aquired in 1994 by Murdochs News corp. and later by EA (3Com Corporation ) 2010, Hewlett-Packard completed the acquisition of 3Com. (Peregrine Systems, Inc) was aquired by HP in 2005, the domain is today used by an investment firm (Data General) aquired by EMC in 1999, domain is owned by today (Crash TimeSharing) went out of business in the 90ies and the domain is now owned by a new company (raytheon corporation) still belongs to raytheon but the domain does not resolve anymore (Tandy Corporation) aquired in 2000 by Radio Shack, domain redirects to (S.P. Dyer Computer Consulting), went out of business in the 90ies, today owned by a domainer (Prime Computer, Inc) sold to Parametric Technology Corporation,domain  now under under privacy  (Marble Associates) went out of business around 2004, the domain i snow used by a marble producing company (Vine Technology) sold in 2003 to unisys, the domain is now owned by Quidsi Solutions LLC and is a portal for food (Kuck and Associates, Inc.) aquired by Intel in 2000, the domain does not resolve and is owned by Intel 2001, Cayman Systems, Inc. was acquired by Netopia, Inc, today it redirects to offers for travel in the caymans (NYNEX Corporation ) megred with Bell Atlantic in 1997, now Verizon (octopus enterprises) went out of business in 2005. The Domain was aquired by a domainer in 2006. In a UDRP 2011 the name was almost lost to a travel company but still is owned by the same person that bought it in 2006 TTI) still belongs to citigroup but not used anymore, the domain does not resolve anymore (Teltone corporation ) was aquired by Industrial Defender in 2008, the domain still shows the teltone products (Wyse Technology) Wyse was aquired by Dell in 2012 (spectragraphics) went out of business in 1998 and the domain is now used by a new company (AlliedSignal)  purchased Honeywell for $15 billion in 1999, and thereafter adopted the Honeywell name and identity, the domain belongs to a new company today (Mentat, Inc.) was acquired by Packeteer, Inc. on December 22, 2004, the domain does not resolve (General Telephone & Electronics Corporation) Merged with Bell Antlantic then became part of Verizon, the domain is not used (quicksilver engineering) went out of business, the domain is owned by a canadian beverage company today is not in use (Santa Cruz Operation) merged with Tarantella Inc. in 2001 and later to UnXis Inc and redirects to (unipress software) unclear status. probably aquired by numarasoftware which now belongs to bmcsoftware (Interactive Development Environments) stoped being operational in the late 90ies, domain now owned probably by a domainer, the company was merged into several new companies and the domain is now owned bw and redirects there (Research & Development Laboratories) the company is not active but whois still shows the same owner (SoftQuad) in 2001 Corel bought most assets, in 2004 Just Systems bought the remaining assets. The domain now belongs to (Quadratron Systems Inc.) went out of business early 2000, the Domain owned by a domainer and parked Motors Research Laboratories) domain not in use anymore Inc)  a subsidiary of Emerson Electric Company, the domain forwards to (now owned by Fujitsu) the domain redirects to DA Systems Inc.) since 2000 the domain is owned by the German DAS insurance Group

Seasonal fluctuations in parking revenues

We had a chance to work on a small study for a client on seasonality in parking revenues. We have been able to use a database of 137,000 parked domains across many different verticals and parking companies. Most of the traffic was type-in traffic we estimate only about 15% is expired traffic. In the 4 full years of data (2009 to 2012)  that we had, this particular portfolio lost on average 7.5% of revenue every year with stable amount of visitors. We normalized this (virtual) portfolio from the overall decrease in revenue and these are the results we found:

Seasonal fluctuations In parking revenues:


The result is somewhat in-line with our own experience, however we have been a little bit astound about January coming out as the top month, for our own portfolio it's usually December. 

So what is the study good for ?
First don't fall into a depression from April to August when parking revenues are low, but especially  do not not wonder why your mailbox might be full of offers for portfolios in April based on stats from January to March. What you should do is purchase in the summer. 
Ideally when buying portfolios you can come back to this post and recalculate their value-based on this table.
We would also welcome more data from parking companies to make this table more accurate.

Project 94: .org 1 and 2 letter domains preappraised

The Public Interest Registry (PIR) will release 94 previously restricted domains to the public in a project called Project94. To take part in the auctions it is necessary to qualify or in the words of PIR: "the addresses will be made available through an allocation process to companies and organizations who respect the attributes .ORG has become known for – namely, trust and well-intentioned"

The auctions will be held through a partnership with Go Daddy and eNom.

It is currently unclear how restrictive PIR will be when it comes to accept bidders for the auctions of these 94 domains, therefore it is very difficult to estimate how far the actual price for the domains will reflect the proper market value. 

We have preappraised the end-user prices for the names to provide orientation in the process. Few names are not part of this list because we have provided estimates for our customers earlier. 75000 5500 4500 5500 8000 125000 65000 75000 12500 10000 35000 5500 25000 12000 15000 15000 8000 8000 8000 55000 8000 45000 55000 8000 8000 8000 45000 65000 35000 110000 100000 35000 35000 75000 8000 8500 45000 8000 150000 12500 78000 9000 155000 120000 8000 20000 185000 25000 40000 125000 8000 35000 10000 95000 90000 8000 8000 105000 8000 98000 8000 74000 7800 75000 7800 90000 90000 15000 95000 7800 75000 75000 7800 5500 140000 7800 40000 90000 7800 7800 7800 7800 7800 7800 7800 Downgrades Internet TLD and Warns About and .uk TLD´s, the domainindustry's leading benchmarking, TLD analysis, rating and Domain appraisalservice, has announced today that it has changed its rating for from AAto B, the domainindustry's leading internet domain name benchmarking, rating and appraisalservice, has announced today that it has changed its rating for from AAto B. The step has been taken after the release on October 1, 2012 of a three-monthconsultation by Nominet, the not-for-profit manager of the .uk infrastructure,into a scheme that would introduce .uk as a top-level domain (TLD). Aftergetting feedback from Nominet meetings held in London on Nov.7and 9 Domainindex.comdecided to change the .uk rating

Currently, over ten million UKdomains are structured as; under the proposal, a competingstructure would be introduced: Domainindex has also issued anInvestors Warning for and .uk TLD, and believes the introduction of TLD would massively destroy the value of existing domains and infact Nominet´s announcement already inflicted harm to the value of .co.ukdomains and the aftermarket as well as the investment climate in the .uk TLD.Our analysis of the proposal, which Nominet defends as a move to increaseInternet Security, would have several adverse effects:


·       The auction of .uk sites would preferentially favor trademarkholders instead of existing domain holders, thereby representing anunprecedented expropriation ofdomain registrants and website of whom most do not own the trademark for theirdomain name.

·       The higher costs of the .uk TLD are in effect an Internet tax for businesses in the UKand especially to domainers as it will raise the cost of holding an inventoryby 800% and will lead to drop of many names that until recently haverepresented significant value.

·       The move will create more bureaucracyand red-tape.

·       British companies would have massive rebranding costs.

·       The proposal will create months or years of uncertainty as the issue is litigated in the courts.


We will closely monitor the progressof the Nominet consultation and may issue further rating changes accordingly.


Domainindex also announced thefollowing rating changes in November:

·       .me up from A to AA(because of the good performance of the TLD)

·       .eu down from AA to A(because we expect the TLD to suffer from nTLDs and weak economy in the Eurozone)

·       .info down from AA to A(because we expect the TLD to suffer more from nTLDs)

·       .mobi down from A to B(because we expect the TLD to suffer more from nTLDs)

·       .tel down from AA to A(because we expect the TLD to suffer more from nTLDs) is a domain appraisaland benchmarking service. It provides automated and manual appraisal ofindividual domain names and portfolios. Domainindex also provides indices tothe domain industry, tracking the value of each TLD and benchmarking theholdings of large portfolio owners with respect to the markets. Additionally,Domainindex provides ratings for 60 TLDs, rating them by economic, legal andtechnical criteria. Domain ratings are used by large portfolio owners to judgetheir risk profiles and exposures in the various TLDs as well as by lenders todomain owners.

Domainindex Announces New TLD Tool

Many people inthe domain industry are asking which new TLDs will be the best. Although manylists have been compiled and published in response to this question, we thinkit is much more interesting to identify the best domains being registered in all the new TLDs. To do so, we’ve hadto analyze and appraise billions of possibilities. Our efforts yielded a set oflists, each containing 10,000 of the most valuable domains for one of the 1,928proposed new TLDs. We then combined all of our lists into a huge Master List ofthe most valuable new domain names.
We acknowledgefrom the get-go that our lists are not perfect. For one thing, they contain manydomains that cannot be registered because of trademark policies or otherrestrictions. Nonetheless, the lists constitute a very powerful resource forthose who plan to register domain names in the new TLDs.
Complicating ourassessments are the uncertainties surrounding the new TLDs:

·      It is too early to discern thequality of each new TLD.
·      Reliable estimates of marketingbudgets for each new TLD are not available.
·      There are differentregistration restrictions and general policies across the universe of registriescontrolling the new TLDs.
·      We do not as yet have a pricingforecast for the different TLDs.

Given theseinherent uncertainties, we have adopted a strategy to form our appraisals basedon an arbitrary number of 100,000 domains in each of the new TLDs.
To provideaccess our compiled lists, Domainindex.comhas created a new TLD Tool , available below. The first ten TLD lists are open to the public;to access the rest, you’ll have to subscribe– it’ easy and only takes a minute.

Domainindex Tool Confirms Weakness ofDomain Sales in 2012

Domainindex Tool Confirms Weakness of Domain Sales in 2012 has just released a new statistical tool to track domain sales. The tool indicates that 2012 has so far has been a very weak year for the sale of domains. This confirms anecdotal evidence regarding the falloff of published deal sizes, and point to 2012 as the worst year in domaining since 2006.
We believe there are three reasons explaining this year’s dismal performance:

1) New top-level domains (TLDs) have hurt demand and therefore prices are weak. The nTLDs are considered risky by potential buyers, who are sitting on millions in investment funds. The resulting price weakness has discouraged large domainers from offering great domains, as they wait for the market to eventually rebound.

2) The current utility of new domains is low compared to other investments. With funding tight, buying domains is not currently considered a requirement for planning a new venture.

3) Privacy issues have gained increased purchase this year. We have not published any of our deals of $10,000 or higher. Furthermore, we have been involved in domain bids of up to $1 million; all domains were sold yet none of the transactions were published. In addition to concerns over taxes, buyers realize that a domain that is sold in a published transaction is harder to resell at a substantial profit. In other words, publicity hurts flipping. This trend also existed last year, so it is valid to draw comparisons between the two years.

It looks like we will have to wait until 2013 or even 2014 to see the market bounce back. In our opinion, big gTLDs and ccTLDs will receive a boost independent of the success or failure of nTLDs:

If nTLDs succeed, the market will be perceived as generally strong and that will help sales of old TLDs.

If nTLDs fail, investors will simply return to old TLDs and ccTLDS.

Our reaction to the lisitng of the IDNX on Reuters and Bloomberg

Recently the IDNX, a index for  domain names, promoted and sponsored by Sedo has been listed on Reuters and Bloomberg.  Domainindex is publishing indices for the domain world since 2009 and I would like to share some of our concerns connected to this development.
Its great to see the domain industry to grow into the financial sector, something we are working on for many years now and we honestly congratulate IDNX to be included in Reuters and Bloomberg this is a big achievement.

However I want to share some of my concerns connected with this step I must say that from an investors perspective I am afraid the promotion of the IDNX might cause more harm then good.

There is in fact nothing wrong with the methodology of the IDNX itself, the problem is created by the set of data used for the calculation: Sedo´s sales data from 2006 to today. So the first and obvious argument against this is that the IDNX only looks at a very specific marketplace, it would be a little like creating an index for antiques by only looking at antiques sold on eBay.

Sedo has created a great marketplace, the best and biggest in the world for domains, however there are certain domains that are simply rarely or never traded via sedo, with a commission between 15 and 20%, an escrow fee 3x higher than it attracts a very particular crowd that will purchase domains. It fits the names in the range of 100 to 10.000 usd and usually again to domainers or webmasters and rarely to "high end" endusers in this price range.

I have talked to many domainers last week and almost nobody has bought or sold any domain in a range over 20K ever on Sedo, but traded many below 10K on Sedo´s marketplace. So what happens is that domains are simply growing out of the Sedo market once they reach a certain value. Yes from time to time Sedo will broker a huge domain like, but most big deals are made without any of the marketplaces or brokers, most endusers will simply contact owners via the whois and so will most domainers and webmaster and lawyers acting on behalf of big buyers.

So Why does it matter ?

1) Over the longterm, the IDNX would suggest only a very little growth in value for domain names, for .com´s 20%, .net 20%,.mobi 15%, es 20%, so from an investors perspective domains would therefore represent a horrible Investment because this means only about 2% revenue/year but in fact what we look at is that Sedo has managed to keep their average sales price increase at inflation level.

2) What do we see in the IDNX ? We see what we see all over, if the economy is doing well and the consensus is bullish, people buy more, when the sentiment is bearish people buy less (in this case domains) and pay less for them on this particular market. This is the worst case for domains as an investment, because the main thing every professional investor will look at if it comes to alternative investments is the correlation to the market. If an alternative investment is correlated there is usually no point to invest in it because you are inheriting additional risk and reduced liquidity and if you can achieve the same goal by buying an established financial instrument you will simply buy an index.

These 2 issues will make it harder to promote domains as investment in the future because it will be benchmarked against the IDNX within the Reuters and Bloomberg systems (and all other systems using the data) from now on. Downgrades Internet TLD: .COM, .NET from AAA to AA, the domain industry's leading benchmarking, DNS analysis, rating and appraisal service, has announced today that it has changed its rating for the .com and the .net TLD from AAA to AA

SEATTLE, Mar 13, 2012 (BUSINESS WIRE), the domain industry's leading internet domain name benchmarking, rating and appraisal service, has announced today that it has changed it rating for the .com and the .net TLD from AAA to AA. The step has been taken after the release of an official statement by U.S. authorities of its intent to continue seizing .com, .net, .cc, .tv and .name domains and forcibly redirecting .org (and probably .us) domains. Officially, over 750 domains have been seized in the last few months by the U.S. government, most of them from overseas registrars. The U.S. government claims that illegal activities take place on these domains. However, many of the domains seem to have been seized simply for linking to gambling sites or sites streaming sporting events on the web. considers these seizures a threat to any .com domain and the internet DNS in general, given the fact that seized domains can be resold for the benefit of the U.S. government even more. This increases the threat to any valuable domains within these TLDs. Therefore, we've had to rerate the TLD today and to lower its rating by two steps, from AAA to AA. While the technical infrastructure, business and economic environment still deserve the AAA level, the legal situation no longer supports this rating.

About 50 large portfolio owners consult ratings for domain names portfolio risk management and investor reporting. Because .com is still the "king" of TLDs, we do not expect any changes in customer asset allocations. Nonetheless, the step has been taken to make clear that other ccTLDs are not affected and will keep their AAA levels. Note that no generic TLD currently has an AAA rating anymore.

We will watch closely how, in the future, the U.S. and other governments handle this issue. Hopefully, we will be able to upgrade .com again. However, we are pessimistic, as a change in this policy will require a substantial change in US politics and in the governance of TLDs. is a domain appraisal and benchmarking service. It provides automated and manual appraisal of individual domain names and portfolios. Domainindex also provides indices to the domain industry, tracking the value of each TLD and benchmarking the holdings of large portfolio owners with respect to the markets. Additionally, Domainindex provides ratings for 60 TLDs, rating them by economic, legal and technical criteria. Domain ratings are used by large portfolio owners to judge their risk profiles and exposures in the various TLDs.