New Extension Sales Sept 23 - Oct 22, 2018

This was one of the quieter months of new domain extension sales since I began this series (see links to previous reports at bottom).  The average number of sales per month in the previous seven reports was 120 compared to just 68 this month. The number of sales was down substantially from last month (313), although the sales dollar volume was only slightly lower. The average sales price of $2955 was about quadruple last month's figure, however and the median was also substantially higher this month.

Summary

During the monthly period ending Oct 22, 2018 there were

• 67 NameBio recorded ngTLD sales in the 30 day period, with $180,800 total sale volume.
• The average sales price was $2955. The median price was $801.
• In terms of major sales, 1 was > $50,000, 8 were > $5000 and 29 > $1000.
• Sales in 22 different extensions, with .top, .global and .link most common.
• The highest sale price was design.online $57,500, dispatch.app at $15,000 in second, while four different .global names (switch, scoop, cyber and leap) tied for third place.
• There were ngTLD domain sales during the month at 11 different venues. Dynadot had the largest number of sales (25) followed by Alibaba Cloud (15).
• The types of domain names that sold: 69% were single word,  14% were short (<=3 letters), and 9% were geographical.
• Registries accounted for almost 64% of dollar volume, but less than 19% by number.
• In 2018 YTD there have been 1196 ngTLD sales listed on NameBio, with an average price of $3675. Sales volume is just over $4.4 million YTD. 

Extension Breakdown

I list in the table on the right  (click on table for a higher resolution version) those extensions that had either multiple sales in an extension, or a total monthly sales volume of  $500 or more. They are arranged by decreasing total sales volume, but the number of  sales for each are also listed.

The following extensions had a single sale: agency, city, gmbh, life, pics, run, site, and vip.  In total, there were sales during this period in 22 different extensions,

The Highest Value Sales

Below is a list of the major sales for the reporting period. Only 2 (or possibly 3) of the top sales were not registry.

• design.online $57.500  Sedo
• dispatch.app $15,000  UserScape
• switch.global  $8,000  DotGlobal
• scoop.global  $8,000  DotGlobal
• cyber.global  $8,000  DotGlobal
• leap.global  $8,000  DotGlobal
• edge.network $7515 Sedo
• DMV.online $5101  Dynadot

Venues

The month saw a steady increase in new extension sales at Dynadot and a drop at Flippa.  As pointed out last month, new domain extensions essentially never sell at GoDaddy (at least not above $100). Here are the venues with multiple new extension sales during the month.

• Dynadot 25
• Alibaba Cloud 15
• Dot Global (registry) 9
• Sedo 8
• BizCN 2
• Jiangsu Bangning (registry) 2

Names That Span Dot Effectively

Some of the domain names from this reporting period that I personally feel make excellent use of the extension as congruent with the domain name are the following:

• design.online
• citizen.group
• simple.solutions
• auto.finance
• rock.city
• click.link
• chain.global
• read.life
• sun.group
• switch.global
• edge.network

Great Value

Interestingly a few of the great names went for value prices.  For example click.link was just $123 and rock.city only $130.  In my mind the greatest value this month though was simple.solutions that sold for only $122. The word winter sold in the .xyz extension for merely $101,  a  true bargain price. These show that, at least sometimes, you can get memorable names in the new extensions at excellent value.

Types of Domains

We also performed an analysis of the type of domain name.  The majority (69%) were single word domain names (+ extension of course), although short (defined as 3  characters or less) were also popular (14%).  About 9% were geographical terms.  Numbers remain unpopular in the ngTLDs with only 2 in this  dataset.  Multiple word domains were rare this month, with just a couple off 2 word names and  one 3 word. Three of the names were adult in nature.

Year to Date 

So far in 2018 there have been 1196 ngTLD sales with an average sales price of $3675. The total value of 2018 reported ngTLD sales up to the day of writing is just over $4.4 million. For reference last year saw $5.2 million in total new extension sales.

Discussion

This report has mixed news for new domain name investors. While the number of sales and number of extensions, are both down from last month, they are in line with the year overall.  On average, this month just over 2 ngTLD sales are reported per day in the NameBio database.  The sales volume  has remained almost constant and the average price is up this month (at least compared to the previous two reporting periods).

One reason I produce these reports is to provide guidance to ngTLD investors to help them optimize their chances for success. The fact that ngTLD sales seem to be trending up on Dynadot may be actionable information.  Outside the registry sales, Sedo continues to be the venue that obtains the highest prices for quality new extension names.  Also, this month confirms a general trend  that single word domains with a good match on the two sides of the dot are most likely to sell, although short acronym names and geo names also find traction in the new extension space.  Surprisingly few number domains sell in new extensions, only 2 during this reporting period.

While I show sales by extension, I would caution those investing in new domain extensions that, unlike the com/net/org/info space, it is not primarily the extension that matters, but rather the match between the name and the extension.  As such, high value sales are possible, even if not probable, in almost any extension even those without a sales history.

It is still prudent to be cautious when investing in these extensions, and still true that overall the return on investment seems better in .com. The difference is possibly narrowing, however, and if the comparison is with other legacy extensions, or country code extensions, the case for new extensions could be made (although is still arguable). For those new to this field, my post on 12 reasons why end users (and domain investors) might want to consider new domain extensions may be worthwhile. The health of new extensions, ultimately, depends on the adoption of these extensions in significant websites.

Notes

The NameBio database (or at least the portion publicly reported) does not include sales with value less than $100, nor sales from a number of venues such as Afternic, Undeveloped or Efty (unless buyers or sellers report them individually), nor from most of the ngTLD registries, so it is difficult to estimate how complete a record this is of all ngTLD domain name sales. Sometimes sales are posted on NameBio after their recorded sales date and therefore never appear on the daily report although they do appear in the NameBio database.

Previous Reports

Here are links to the three previous reports in case you want to do monthly comparisons:

• Period ending Sept 22, 2018
• Period ending Aug 22, 2018
• Period ending July 22, 2018
• Period ending June 22, 2018
• Period ending May 22, 2018
• Period ending Apr 22, 2018
• Period ending Mar 22, 2018

Next Report and Other News

We will issue our next report in late November, and it will cover ngTLD sales for the period from Oct 23 through Nov 22. This monthly update on publicly reported ngTLD sales is offered as a service to the domain community.  While I strive to be accurate, no implied guarantee or warranty is associated with this report, and readers should independently verify information before using it in any domain investment decisions.  As always, we welcome comments and corrections. We report regularly on domain name news, with a special emphasis on the new extensions, on our Twitter feed.  Why not join the almost 1600 domain investors, venture capitalists, tech experts, startup owners and other great people that already follow us @AGreatName?  If we can be of assistance in helping you find a domain name at a value price, or using a domain name phrase in a marketing campaign, don't hesitate to contact us through our website (or via direct message at Twitter).

Original post Oct 25 2018.

Disclosure:  I currently hold a number of  ngTLD domain names. I am  not associated with NameBio, but would like to acknowledge their incredible database and their generosity to make it available to the domain community. This, and all other postings at this site, are offered for educational purposes and should not be interpreted as domain investment advice. You are responsible for your own domain investment decisions. 

Scaling Domain Sales Data

It is always important to make sure we are not tricked by apparent trends.  If you regularly read the  NameBio daily sales report, as I do,  it certainly seems that almost all domain name sales are in the .com extension, and that the number of new global top level domain (ngTLD) sales is minimal.  Not infrequently there is not even a single new extension sale in the daily report report. However, most domains that are for sale are also .com.  I wondered if we scaled for this, whether .com would still be 'king'.  Here is what I found.

The Study

I wanted recent data, in case there are any temporal changes, so I decided to base my analysis on domain sales so far in 2018.  On the day I performed the analysis (July 30, 2018) the NameBio database showed a total of 48,010 domain sales so far in 2018. It is easy with NameBio to control which extension, date range, venue, etc. for any search.  When I selected 'all  ngTLD' it indicated 649 sales of ngTLDs so far in 2018.

If this is end of story, it certainly sounds pretty gloomy for the ngTLD investors.  For every ngTLD domain name sold, 74 are sold in other domain extensions (the majority in .com).  On average, there are only 3 sales in all the ngTLDs reported on NameBio each day.

Not So Fast

However, it is important to take into account the number of domain names that are for sale in each category, and scale the sales with that information.  That majority of domain names registered and for sale are certainly in com/net/org and a  number of country codes. Using Verisign global domain market most recent stats 333.8 million total domains registered, and 20.2 million ngTLD registered.

Therefore, if we scale the sales data using those numbers  we have:

• So far in 2018 1 domain name has been sold for every 6953 registered in all domains.
• So far in 2018 1 ngTLD domain name has been sold for every 31,125 registered

It is important to realize that these number are for domain names registered, many of which are not for sale. Therefore it's not quite as negative as the numbers indicate. Nevertheless, if we accept the assumptions of this study (see below) that the ratio of for sale domain names to total registered is approximately similar in the two groups, then the relative numbers are valid.

While the picture is not as bleak for ngTLD sales as the 1 sale for every 74 in all extensions would suggest, still this suggests that if you hold a ngTLD the odds of it selling are about 1 in 4.5 compared to the industry wide probability of sale.  While still gloomy for ngTLD investors, but roughly 5:1 ratio not as bad as the 74:1 ratio you would assume from just reading daily domain sales reports. Many more domains are com than anything else, and many more sales are com too, naturally.

Does Price Matter?

It is nice that NameBio statistics give you things like number of sales, average price, etc. for any search.  I honestly had no idea what I would find when I looked at average sales price, but price information so that should be considered too. I mean most domain investors would happily sell fewer domains if each sale was for more dollars.  I was surprised by what I found.

• So far in 2018 average sales price of all domain names $1393
• So far in 2018 average sales price of ngTLD $5531

The average selling price, at least in the 2018 to date dataset and using all NameBio reported sales, show a result that is about 4:1 in favour of ngTLD.

So overall the ratio seems roughly 4/5 comparing ngTLD to all domains, about 1/5 as likely to sell as any old domain, but when it does 4x more cash per sale! This would suggest that overall return on investment is approximately equal whether one invests in ngTLDs or in other (mainly .com) extensions. But....

Not So Fast 2

There are two main factors that we have not taken into account that need to be considered before we jump to that conclusion, however. The first of these is the issue of premium domain names. The registries take some of the ngTLD nice sales for themselves, by keeping premium names and  offering them directly to end users at higher prices. The NameBio database  has a mix of sales by individuals and domain name investors, and someof the registry sales (only a tiny portion really, mainly in .global and .top extensions in recent data).

It depends what the question is whether the registry sales  should be included or not.  If we are interested in the overall value of the domain industry for new versus all extensions, it really does not matter if the sale was made by an individual who used to own the name, a domain investor, or a registry.  However, in domain investing communities they naturally feel that the registry sales should be excluded.

I recently looked, in same dataset, at the issue of how much of the reported sales are registry.  You can read the full report here, but I found that while only 29% of the number of ngTLD sales are by registries, in terms of dollar value of sales about 54% are registry. 

Combining this with our previous two factors (number of sales ratio, average selling price ratio), the overall comparison of ngTLD to all sales suggests a factor of (4.0/4.5)x(0.47) = 0.42.  Therefore our overall conclusion is that investment in ngTLD domain names currently has a return on investment of roughly 42% that compared to the total domain name market.

A second issue is whether renewal costs should be taken into account in some way in scaling the expected return on investments.  While the most important legacy domain extensions (com/net/org/info) have fairly stable registration and renewal prices often in range from $8 to $12, the model for many (certainly not all) of  the new domain extensions has been to offer very low initial registrations but renewal rates that are higher in subsequent years. There is also much more variation from registrar to registrar.  When I did an analysis for renewal rates of new extensions, for the most popular ones both in registrations and sales, I did not find that renewal costs were higher for new extensions.  It is true that some premium domains also come with premium renewals.  While a correction factor might be argued, it may well be offset by lower acquisition costs and (for non premium) slightly lower renewal rates of the new extensions.  Therefore I did not apply any factor for possible differences in acquisition or holding costs.

The Assumptions

In any analysis it is important to keep in mind the explicit and implicit assumptions made.  I itemize the most important ones below.

1. We used NameBio data, therefore this study only applies to domain sales over $100 and only those in the venues that are reported on NameBio.  The possibility exists that ngTLD sales are over or under reported because of this assumption.
2. This study uses data only for 2018 year to date.  Some NamePros users have looked at similar data using Sedo only sales for the previous two years, showing that the ratio was same order of magnitude, but ngTLD sales were smaller than for 2018. That makes sense to me, I think for whatever reason the past 12 months have been more favourable for ngTLD sales.
3. We have taken out the effect of registry sales, so the final ratio reflects only non-registry sales.
4. If the ratio of domains for sale to total registrations varies between ngTLDs and all domain names, that would influence the data.  If one looks at parking data, the ratios are not that different.  I think to first order the ratio is similar, but I totally accept there is probably a minor influence due to this. I suspect it would be unfavourable to the ngTLDs (a higher ratio for sale), but I do not have data to prove this.
5. For reasons indicated above, we have not applied a correction for acquisition or renewal cost differential, if there is one. 

Some Conclusions

So what does this all mean?  While considering the assumptions made and how they might influence the data, I think we can conclude with a fair degree of confidence right now the following.

• There are on average 3 new extension domain sales per day on NameBio.
• Less than 1.5% of all domain name sales are in the ngTLDs (at least for publicly reported >$100 sales).
• The percentage of all domain names registered that are in new extensions is currently about 6.0 %.
• If one takes into account both average selling price and number of sales, and also correct the data to exclude registry sales, on average the return from investing in ngTLDs is currently about 40% of the value from investing in all domain name extensions. The number of domains sold is less, but the average price is more, although half of the sales revenue goes to the registries.

I suspect it is true that, on average, domain name investors these days are not making money (clearly some are making a lot of money, but many more are losing money when all costs are considered).  This analysis suggests that on average new domain investors are losing more money. 

What Does It Mean?

I think that the numbers support the idea that the easier money is in com, that it is indeed 'king' even when data is scaled. However, it's not as one sided as first seems, and as some often claimed by new extension critics.

I would not place too much credence on the high average selling price found for ngTLDs. It was certainly driven by a few very large sales, most but not all registry sales, in a relatively small data set.  I expect a different number if I repeated this in a year time, probably a lower average sales price. Nevertheless, I have taken out the registry sale impact in the conclusions of this study.

If other extensions offer better returns on investment, should anyone ever buy ngTLDs?  I think so, and in this post I gave 12 reasons (with real use examples) why new extensions sometimes make sense. I also posted previously on why new domain extension investing may be the right choice for some. In my opinion it particularly makes sense if one of the niches that you have expertise in is a good match for a new domain extension.

Another possible argument for new domain extension investing is that it is "the future".   I don't think at the current time any of us can definitively say whether this is true or false. Most of the extensions were introduced two to three years ago (general availability) and it is discouraging that they have caught on in such a limited way.  On the other hand, sales data are on track to make 2018 the best year yet (by a small factor) and there is no doubt that the majority of the big sales have taken place during the past 16 months.

It is true that .com has remained dominant for a long  time, and many brokers, marketplaces and domain investors continue to push it as almost the only extension to consider. Things do change however.  For example the computing experts in the 1990's and even early 2000's argued that with minimal market share Apple had no future, and that open PC systems would always dominate.  The day I write this Apple has just become the first company to reach the one one trillion dollar valuation mark.

I would not feel comfortable betting in favour of, or against, the long term adoption of new domain extensions. Personally I feel a few will eventually find wide acceptance and adoption (I think .top and .xyz are best placed to achieve this status), a number will find niches particularly for sole proprietorships and some will in essence die in obscurity even if they are not formally closed.

How many people, before it started to take off, would have predicted that .io country code extension for the Indian Ocean region would become a popular option for technology and other startups and sell for good prices?  It is not easy to predict domain name trends.

I certainly do not feel everyone, or even a majority, should invest in new extensions.  If you have developed expertise in com/net/org, feel most comfortable with those, it makes sense to stay in those.  Your domain investment is probably also less risky in the major domain extensions, depending on your names of course.  Those who do invest in new extensions must be prepared for a relatively long time window, and the  need to do more active promotion of their names.  They also should make due diligence regarding both analysis of what is selling and at what prices, as well as where it sells and how best to limit acquisition and holding costs.

It would be interesting to extend this kind of  analysis to look at specific extensions. For example, when scaled, is it better to invest in .org or .com or .io?  I have already done some analysis along these lines, and will report results in the not too distant future.

PS What Do You Do?

I feel it is important to try to be fair, open and balanced in any analysis. It is a fair question to ask what do I invest in personally, so you can assess any possible underlying biases I may bring to the analysis.  You can see almost 98% of my portfolio here. At the current time my portfolio has 13 .ca, 6 .co, 5 .com, 4 .pw, a few other country codes and one .net, and the rest (about 90%) is in new extensions. For my sales (all at modest values) up to this point, I have sold a single .co and  30 new extension domain names. I closely follow all areas of the domain name market, including extensions that I do not currently own but see value in (such as .org, .io).


Original post Aug. 2, 2018.
Slight grammatical correction (no content change) Aug. 9, 2018.

Links:

• NamePros link that triggered this study
• NameBio database
• NameStat (statistics broken down by extension)
• nTLDs site (statistical data on new extensions)
• Verisign Domain Market report
• Our site NamesThat.win 
• Permanent link to this blog post

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.

In a few cases there may be affiliate links will on this blog. This means I receive a small amount if users visit or make purchases via the link. You do not pay any additional charge due to using an affiliate link, and in some cases below the normal price. I receive no identifying information about who clicks, or does not click, any link. I never accept compensation to provide favourable review of any particular service or product.

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.  As disclosure, I do have a domain portfolio that is predominantly ngTLD domain names, although I do also own a number of .com, .ca, .co and a few other country code extension domains..

The text of this posting is ©R. Hawkes, all rights reserved. However, you may, without permission, use reasonable length portions of the post as long as a link to this post is also provided. If you wish to use the complete contents of a post, please request permission. I am normally open to reprinting, but will consider each request individually. 

The images used are either those associated with a product or service, or Pixabay images believed to be available for use without attribution. If you see any image that you believe is problematic, please let us know and we will immediately correct the situation.

Are New Extension Sales Mainly Registry?

As my analysis of monthly new extension sales have shown, in a typical month there are about 100 sales of new global top level domain (ngTLD) names spread over 15 to 20 off the different extensions.  You can see the most recent monthly report here, and scroll to the bottom to see links to the previous reports.

The report also includes year to date data on number of sales and total dollar figure.  If 2018 continues at the current rate, it may be the best year yet for ngTLD sales by a small margin. So while total registrations of ngTLDs have fallen over the past 12 months (although not by the huge factor sometimes portrayed), ngTLD sales data are constant or even improving.

The ngTLD critics often respond after grudgingly accepting the data "yes, but it is pretty well all registry sales, so domain name investors in ngTLD are not making any sales."  There is of course some validity in this argument, and many of the largest ngTLD sales of all time (names like home.loans and b.top) have been registry sales.  To see how valid the argument is in general, I did an analysis of ngTLD sales over the past month.  This is what I found.

It does not seem possible to get from NameBio individual details for more than 100 sales in a category at a time (you can set search parameters, and then order it by price or by date, ascending or descending, but cannot look at say all 800 items returned).  Therefore, I decided to work with a set of less than 100 so I could determine which are registry sales for each individual sale.  For my data set I used NameBio recorded ngTLD sales for the one month period ending July 30, 2018.  This set has 99 ngTLD sales totalling $320.3k so I could analyze each of them.

Of the 99 ngTLD sales in the period, 31% (31 out of 99) were clearly registry sales. The often repeated statement that there are pretty well only registry sales, seems not to be supported by evidence. Most of the main marketplaces that report had at least a few sales during the period - e.g. 13 of the sales were on Sedo. It should be noted that it is possible that some of the sales reported on Alibaba are in essence registry sales as well, since they act as a reseller of for both individuals and the registry, it would seem.  This would decrease somewhat the percentage that were non-registry, but it is not easy, or even possible, with public records to differentiate between the two, especially for domains that may have expired. I feel confident that the majority of the number of sales being non-registry will not change.

Of the $320k in ngTLD sales during the period, 54% ($171k) were registry sales. This was dominated by a couple of two letter top extension registry domain sales in the period, each for about $50,000.

Among the highest value sales, it is true that the registry sales dominate. For example, in this data set 6 of the 10 highest prices, including the first two positions, were registry sales. This trend is even more dominant if you look at the top ngTLD sales of all time.

If anyone wants to analyze or examine the NameBio data for themselves, here is the link.
https://namebio.com/?s==gTNwUDMygTM

One should keep in mind that this is only for a single month of NameBio reported sales. As in other extensions, the majority of sales, both registry and non-registry in the case of ngTLDs, are not reported to NameBio.  Also, as noted, in some cases it is hard to be sure on correct identification of registry vs non-registry sales in certain marketplaces. I am not claiming that exactly 46% of value or 69% of numbers of sales are non-registry in a larger dataset, or that those numbers would necessarily hold in a longer time frame.  I do feel confident that it is true that there are significant numbers and  dollar volumes in both registry and non-registry ngTLDs.  And of course if one is looking at the health and  use of ngTLDs, then whether they are purchased from registries or domain investors is immaterial.

Original post July 31, 2018.

Slight modification added Aug 3, 2018  to allow that some Alibaba marketplace sales may be on behalf of the registry - also correct 29 to 31. Acknowledge this insight from NamePros user ecalc. Also final paragraph was added.

Links:

• Dataset used in this analysis
• A recent monthly ngTLD analysis on this blog
• NamePros thread that prompted the analysis (scroll through comments)
• NamesThat.win - please visit!
• Top ngTLD sales of all time 
• Permanent link to this blog post

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.

In a few cases there may be affiliate links will on this blog. This means I receive a small amount if users visit or make purchases via the link. You do not pay any additional charge due to using an affiliate link, and in some cases below the normal price. I receive no identifying information about who clicks, or does not click, any link. I never accept compensation to provide favourable review of any particular service or product.

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.  As disclosure, I do have a domain portfolio that is predominantly ngTLD domain names, although I do also own a number of .com, .ca, .co and a few other country code extension domains..

The text of this posting is ©R.L. Hawkes, all rights reserved. However, you may, without permission, use reasonable length portions of the post as long as a link to this post is also provided. If you wish to use the complete contents of a post, please request permission. I am normally open to reprinting, but will consider each request individually. 

The images used are either those associated with a product or service, or Pixabay images believed to be available for use without attribution. If you see any image that you believe is problematic, please let us know and we will immediately correct the situation.