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March 20, 2007

Comments

Basicity

Came across your blog at Domain Name Journal. Very nice and useful blog, a definite bookmark. Cheers.

Dan

Frank,

What do you think the actual value of this secondary market is? I have seen estimate of 400M to 2B on several different sites.

Dan

***FS*** Yknow thats a great question Dan.. I began trying to add it up to incorporate an estimate into my post yesterday and then quickly became overwhelmed.. you have to remember that the secondary market goes on in .com, .net .org, .de, co.jp, co.uk .. eu mobi .com.ar brazil, china india russia.. there are hundreds of sales a day its overwhelming to think about.. I don't want to embarass myself by guessing wrong. But i would say its about 800 million per year right now; and its growing very quickly.. Figure 5% of the name space is turning at an average price globally 2000 and you're over a billion though.

Rob Sequin

Great story but you know the saying about when the taxi driver starts giving you stock tips it's time to get out of the market!

But, "this time it's different"?

I don't think we're in a bubble, not at least until the domain business makes the cover of Time magazine but your story made me think about that dreaded "taxi driver".

***FS*** Taxi driver, hairstylist, plumber.. they all need a domain name to operate a website for their business. You are correct to point out the potential mania dynamic. Here's how I measure it.. Right now when people ask me what i do, I ask them: "Do you know what a domain name is"? A full 50% say no. That shows me there is still alot of head-room.

David Bleaman

Great story! I've just recently been introduced to your blog and visit it each morning. Thanks for sharing your experiences.

Dan

Frank,

Thanks for the quick response. I had previously spent several hours trying to come up with a quantifiable number, and relooked at my numbers after your post last night. My estimates are around 2B. Great Stuff..

Dan

Tia Wood

Love the post! I'm also a FS Blog morning reader. [lame]It's like coffee...for my soul...[/lame]. This story is inspiring. Thanks for sharing!

sevent

Hi Frank,

I couldn't agree more that what we see reported at DNJournal is just the very tip of the industry. I would say that domain resales is *at least* a billion dollar a year industry. DNJournal listed about $100 million in public, reported sales this past year. Then factor in undisclosed sales (often very large including portfolio sales), and factor in non-straight cash deals (like sex.com), and factor in many countries with HUGE domain markets where the sellers don't know about DNJournal or speak very little English (China, Korea, Germany and other European countries), and finally factor in a long tail of low-value sales at the forums and to end-users, I think you are up to a billion or more. Even among the small slice of networked domain investors who know about DNJournal I bet the majority of their sales remain private.

Cheers.

owen frager

One more example of value/perspective:

Here's the cost to change a name that billions was recently spent to get known, back to a name that's already known better:

AT&T to Dump Cingular Name

AT&T Corp. plans to ditch the Cingular Wireless brand name and orange jack logo in favor of the AT&T Wireless name next year, according to news reports.

The move will help AT&T alleviate confusion about its brand in the marketplace, news reports said. The plan follows AT&T's announcement in March that it will merge with BellSouth Corp. with whom it operates Cingular Wireless LLC. That merger would "strengthen Cingular through unified ownership and a single brand," a company statement said at that time.

While the majority of Cingular's operations will remain unchanged, simplifying the ownership structure will lead to more efficient marketing and service provision under a single AT&T brand, generating further financial synergies and customer benefits, the statement said.

The marketing cost to rebrand AT&T could run into the billions of dollars, news reports said.

The new name would need to be communicated to Cingular's reported 55.8 million cellular/PCS subscribers. Cingular's first quarter revenues climbed to $9 billion, a 9.1% increase from one year ago.

The rebranding will also follow this year's reported $500 million Your World. Delivered ad campaign, which stems from SBC Communications purchase of AT&T in November. Both entities then decided to keep the AT&T name(Xtra, Jan. 4).

Remember, before these are type-ins- they are names... and my of the domain names doing little on parked pages, have intrinsic value that's never analyzed and often overlooked.

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