Million-Dollar Domain Names

The total number of registered domain names on the Web reached 326.4 million in the first quarter of 2016, according to the latest Domain Name Industry Brief by Verisign, a US-based domain name and Internet security company. That represents an estimated 12.4 million new domains registered since the fourth quarter of 2015 (3.8% growth) and nearly 32 million since the first quarter of 2015 (11% growth). The combined new URL registrations during the first quarter with a .com or .net extension were about 10 million, followed by extensions unique to a specific country—country code top-level domains, or ccTLDs—which made up another 3.8 million new registrations.

• The .com extension is the world's most popular and had a base population of 126.6 million registrations as of March 2016. The .net extension is far less used with about 15.9 million registered URLs.
• The ccTLD extensions together represent another 148.2 million registered URLs.

The domain name industry, however, includes not only new registrations but also the exchange of previously registered domains, which is commonly referred to as the domain aftermarket. This secondary market for internet domain names has grown substantially in recent years since an increasing number of generic domain names with "desirability" and "marketing appeal" potential have already been registered by resellers or domain warehouses. DN Journal (DNJ)—the domain industry's premier trade magazine—reports weekly on the highest domain sales on the aftermarket, with the data broken out by sales venue. Analysis of recent reports indicates the following:

• The average sale price for the top 10 .com domain in the aftermarket so far during 2016 is $315,800. 
• The most expensive domain purchase so far this year was the we.com transaction for $8 million. The sales of the jade.com and LA.com domains this year run a distant second and third by value at $1.25 million and $1.2 million, respectively. 
• The $13 million sale of sex.com in 2010 tops the charts in the aftermarket sales tracked by the DNJ and is one of many sex industry URLs to rank in the annual top 10 lists by sales value. The sex.com domain name was sold by Escom LLC, which had gone bankrupt, to Clover Holdings. Other sex-industry domains, like porn.com and porno.com, have been sold in the range of $8-10 million.

Data from the likes of the Domain Name Industry Brief speak to the value of vigilant analysis of emerging trends in buyer behavior globally for the purpose of identifying niche opportunities to register potentially desirable domains. Will alcohol, sex, precious gems, major sports, and the travel industry, all currently represented in the top sales of the domain aftermarket, continue to dominate? What will become of the trend in recent years toward more nondescript URLs, such as la.com, tp.com, 399.com, px.com, qe.com, and kk.com? Stay tuned!