Stephane Vangelder : Crisis or no crisis for domain names?
There's no real suspense here: yes domain names are also being hit by the current economic downturn. Aftermarket domain sale volumes may not be falling too much, but transaction values are certainly down as sellers adapt to the end of the "anything sells (even a dud domain)" era by dropping their prices.
Another sign of a cooling off in the second hand domain market: NameMedia has shelved plans for a $172 million IPO which the professional domain seller had filed back in November. Current market conditions have been named as the main reason for not going ahead with the stock market listing.
Yet it's far from being all doom and gloom for the industry. Record sales are still happening. Take AT&T's purchase of YP.com for a mouth-watering $3.85 million cash payment in November. The American telecom giant is the operator for the US Yellow Pages, so the two-letter domain is an obvious bonus for the company's telephone directory service.
The sale shows that good names will continue to hold their value during the current downturn, just like top real-estate tends to fare much better than the rest of the property market in such times. Think top-flight New York apartments and you'll get the idea. Just like that kind of real-world property gemstone, a two-letter .COM domain has undeniable intrinsic value.
So as usual, the crisis is really a way to bring back a level of sanity to some over-inflated values. It's also an opportunity for savvy investors to fill their shopping basket with great deals. In a few years' time, they'll be the ones behind the headline-grabbing sales you'll be reading about on this blog…
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