{"id":1147,"date":"2015-05-08T00:00:00","date_gmt":"2023-05-12T21:35:21","guid":{"rendered":"https:\/\/mediaoptions.com\/blog\/the-new-normal-5-factors-driving-the-rising-values-of-short-domains\/"},"modified":"2024-11-19T07:55:09","modified_gmt":"2024-11-19T07:55:09","slug":"blog-the-new-normal-5-factors-driving-the-rising-values-of-short-domains","status":"publish","type":"post","link":"https:\/\/mediaoptions.com\/blog\/the-new-normal-5-factors-driving-the-rising-values-of-short-domains\/","title":{"rendered":"Supply & Demand: 5 Factors Driving The Rising Values of Short Domains"},"content":{"rendered":"
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The value of short domain names continue to rise, seemingly without end or limit.\u00a0 This leaves many asking if this is a temporary bubble that will burst or a more intrinsic shift in value; in other words, the \u201cnew normal.\u201d It\u2019s smart to ask this question, and often.\u00a0 If you are an investor it\u2019s critical to either pay very close attention to the current movements in these markets or simply take your names out of the market and don\u2019t participate in order to see how this all shakes out.<\/p>\n

You might look to history and consider past trends, long and short, and think about whether or not they apply to today\u2019s market.\u00a0 Are we at the apex of a cycle or are we seeing a new floor being set in domain asset values (short domains \/ liquid domains)?<\/p>\n

Ultimately, listening to an expert opinion (or two) can shift your perspective and allow you a wider scope of vision in your analysis of a market like we have today.\u00a0\u00a0 And we\u2019ll be the first to say that there are a lot of mixed signals out there! As one of the leading domain name brokers, Media Options has a finger on the pulse of the market itself and on a close eye on the factors driving that market. Since our inception, Media Options has always been focused on short domains, not just on the brokerage side, but in our owned\/operated investment strategy.<\/p>\n

We have owned in excess of 500 LLL.com (3 Letter .com) domains and have traded at least 26 LL.com (2 Letter .com) domains, might be more than that!\u00a0\u00a0 It\u2019s hard to be in a better position to judge the market than being at its very epicenter through ownership and deal making!<\/p>\n

Every single day we negotiate with the biggest Chinese buyers as well as Western buyers and owners.\u00a0 We constantly test our hypothesis and strategies through real buying and selling. Daily.<\/p>\n

With each negotiation, we need to research in depth what could drive a potential buyer, who that buyer is, are they the best buyer, etc. In the thick of the negotiation process, we encounter these factors on an even more intimate scale. Understanding the difference between an end user and an investor in the current market is essential to the difference between a $459,000 sale like qua.com (as reported by DNJournal<\/a>) and a $17,000 sale such as pqa.com (just one letter difference, but oh what a difference!).<\/p>\n

That\u2019s not to say that every sale can or even should be a record breaker, but marrying an owner\u2019s objectives, the market dynamics and a buyer\u2019s potential interest is the key to a successful sale. After navigating through the feeding frenzy of the last 18 months (first it was LL.com, then Numerics and now LLL.com), we\u2019ve come to a conclusion that we are facing the new normal.\u00a0 The days of $5,000 \u2013 $10,000 three letter .com domains are done and I don\u2019t see them coming back.\u00a0 Ever.\u00a0 For a long time I\u2019ve felt that domain values were not in line relative to their importance, scarcity and brand value on a global scale.<\/p>\n

At this point, I think we are seeing a shift upwards and in fact positive correction towards more efficient pricing and a real time market.<\/p>\n

The sheer size of the economy in China, India, Brazil and other growing markets is driving exponential consumption online.\u00a0 More people have access to the internet, more businesses are coming online, plus we\u2019re seeing a globalization of those businesses as well as the ones already online.\u00a0 Businesses which were local are now targeting a global audience.<\/p>\n

Short domains provide the path of least resistance across cultures, languages and borders \u2013 and there is no better vehicle than .com.\u00a0 Simple. These markets are hungry for these premium and increasingly scarce .com domains \u2013<\/p>\n

the internet is all about expanding access from your region out to the entire world, and .com is its universal language!<\/strong><\/p>\n

In the end it\u2019s to be expected.\u00a0 With less than 100 two letter .com domains left on the web in investor hands, the window is closing fast to join the elite group of companies that operate on one.\u00a0 The same goes for all the other short names, although none as pronounced as NN.com and LL.com.<\/p>\n

The numbers tell the story: Brazil\u2019s online<\/em> population, 78 Million, is larger than the actual total population UK, France or Spain! And that\u2019s just who\u2019s already online- and there are 116 cell phones per 100 people in Brazil!<\/p>\n

That\u2019s serious- this really is the mathematical definition of exponential<\/em> growth! \u00a0If a city\u2019s population were rising as quickly as the users on the internet, real estate prices in that city would be out of control! \u00a0Why should the correlation between the internet population and internet real estate be any different?<\/p>\n

Let\u2019s delve into the power of a short domain and the value that power drives:<\/p>\n