How do APP and COM sales compare?

There is debate in the domain investing community on the resale prospects for the .app domain extension. Those optimistic about the extension point out that it is backed by Google, the security requirement is an innovation in our industry, early registration numbers were strong without deep discounts, the app development market is large and growing, and already there are significantly large aftermarket sales. Sceptics point out that the number of sales is totally dwarfed by legacy extensions such as .com, and that previous extensions sponsored by Google have had limited success.  Here I take a look at early sales numbers, scaling them according to the time period and number of domains registered in the extension. My comparison os with the gold standard .com extension.

Raw Sales Numbers and Volume

I used the NameBio database (data effective Sept. 27, 2018)  to look up sales numbers and volume in both .app and .com for 2018 YTD.  There is no doubt that .com dominates, with 51,861 sales (in NameBio database) totalling about $65,760,000 in sales volume.  The comparable values for the .app extension are just 10 sales totalling $43,720. These numbers are shown in the yellow lines at the top of the table.

Average Prices

It is interesting that the average price is higher in .app so far, with $4372 for .app compared to $1268 for .com.  While the average value for .app is influenced by two high value sales, even if you take median values, .app would be significantly higher than .com ($1103 vs about $300).

Scale for Full Year

However, the .app extension has not been in general availability all year, so no resales were even possible for the early months. I scaled each to a full year (assuming the current sales rate).  One could argue about whether the first day of general availability (May 8, 2018) or the period with aftermarket sales  (started June 1, 2018).  I used the latter for the scaling. If you scale the number and sales volume to project for a full year the data shown in the green section in the middle of the table is obtained.  Since .app has only been selling for about 4 months, over a year we expect about 30 sales  and a yearly sales volume of order of $130,000.

Scale with Registrations

As I have pointed out previously, when we compare sales volume and numbers between extensions data should be scaled according to the number of domains that are for sale in that extension. For example, if you had  only 1000 domains for sale in an extension, and 5 of them sold in a year, that is far more significant than if 5 sold out of 1,000,000 domains for sale. Therefore I scaled the number and volume of sales according to registration data.  For .com the registration numbers are fairly static, and I used 134 million registrations.  For .app the numbers continue to increase, so the question arises how to obtain an effective number for the period.  I used 319,860, reflective of recent dates in the extension.

The scaled data are shown in the blue portion of the bottom of the table.  Once we scale in this way, while .com still is favoured, the two are within the same order of magnitude.  The number of sales favours .com by about a factor of 5, while the sales dollar volume favours .com by less than a factor of 2.  The latter is well within uncertainty of the small number statistics so far for .app.

Discussion

The final step for a domain investor requires consideration of at least three other factors. The data should really be scaled not according  to the number of registrations in an extension, but rather the number of domains actively for sale in that extension.  The percentage of domains that are parked is unusually high in .app (about 81%) and the number of domains in active use in an Alexa 1M website is low, 1 per about 2000 registrations. These would both argue that the fraction of domains that are for sale is higher in .app.

A second factor that must be taken into account is acquisition and holding cost for each extension. The situation is made complex in .app as some domains were sold for higher prices in the early availability period for the extension. In .com, the acquisition cost is also variable, unless it was an  original hand registration, which is probably not true in most 2018 sales.  In terms of holding cost, at time of writing the best renewal rate for .com was $8.75  and for .app was $13.88.  Probably within the accuracy of the analysis, costs are not distinctly different in these two extensions, although may favour .com.

The third factor to take into account are trends. The first months of sales in an extension may be non-representative. Sometimes early optimism for an extension fades, and most major sales happen in the first year.  In many other extensions,  there are no significant sales, at least outside registry premium sales, for years, and then interest grows, sometimes with spectacular sales, as more become familiar with the extension.  I think it is too early to say what the situation will be for .app.

I think there  are reasons for optimism in the .app extension.  In the first few months  are are already a significant number of sales in the extension, including several above $10,000.  Domains are selling at respected venues like Sedo.  Registration numbers are significant without low promotional pricing.   Some major domain  investors that have shunned most new extensions have invested.  All that being said, I am concerned with the slow adoption of the extension for significant working websites.  Those using this analysis should  keep in mind that 10 sales is a tiny statistical sample.

I think the prospects for the domain extension will be clearer in a year  or so when we have a more significant sales record, and after we see how many end users are actively using the extension.

Original post Sept 29, 2018.


Fine Print

This post is offered for informational and educational purposes only, and should not be considered domain name investment advice. While an attempt has been made to be accurate, there is no implied or explicit warranty, and you are responsible for verifying any information of importance to you. You also accept full responsibility for any domain investing decisions you may make.

I have no association with the folks who maintain NameBio or NameStat databases. I acknowledge the makers of these for the valuable products that they make freely available to the domain name community. 

I try to be fair, balanced and objective in my analysis.  If you feel this post does not meet that standard, please express your concerns to me.  I do not hold  any .app extension domains currently, so have no potential conflict of interest.  I do hold a handful of .com extensions, but most of my portfolio is not in that extension either.

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