© Sedo.com LLC, 2007 1 Domain Name Secondary Market Tim Schumacher CEO Sedo ICANN, Lisboa 2007
© Sedo.com LLC, 2007 2
What is the Domain Secondary Market?
• Registered Domains
• Expired Domains
• Domains for resale
• Portfolio sales
• Domain Parking
© Sedo.com LLC, 2007 3
Expiring Secondary PortfolioRegistration Domains Acquisitions Consolidation
Foundation Growth Take-Off Landing
Evolutionary Theory of Domains
Primary Secondary
© Sedo.com LLC, 2007 4
Are Sales Values Increasing? Volume of Sales
Monthly Number of Sales
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Sep-03
Nov-03
Jan-0
4Mar-
04May
-04Ju
l-04
Sep-04
Nov-04
Jan-0
5Mar-
05May
-05Ju
l-05
Sep-05
Nov-05
Jan-0
6
© Sedo.com LLC, 2007 5
Are Sales Values Increasing? Volume of Sales
Monthly Sales Volume
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
Sep-03
Nov-03
Jan-0
4Mar-
04May
-04Ju
l-04
Sep-04
Nov-04
Jan-0
5Mar-
05May
-05Ju
l-05
Sep-05
Nov-05
Jan-0
6
© Sedo.com LLC, 2007 6
Are Sales Values Increasing? Sales by Price Range
Number of Sales by Price Range
0
1000
2000
3000
4000
5000
6000
$0-50
0$5
01-1,00
01,0
01-2,
000
2,000
-5,00
05,0
01-10
,000
10,00
0-20,000
20,00
0-50,000
50,00
0-100,0
0010
0,000
+
20042005
© Sedo.com LLC, 2007 7
Are Sales Values Increasing? Market Changes
Market Change Between 2004 and 2005
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Number of Sales Average Price
20042005
© Sedo.com LLC, 2007 8
Where are Sales Coming From? By Volume
Source of 5k+ Reported Sales - All Years
18%
48%
4%
30%
DROP CATCHINGMARKETPLACESOTHERPVT SALE
© Sedo.com LLC, 2007 9
Where are Sales Coming From? Detailed View
Detailed Source of 5K+ Reported Sales - All Years
45%
9%5%
15%
6%
2%
0%
18%
SEDO
AFTERNIC
GREATDOMAINS
DOMAIN SYS
POOL
ENOM
NAMEWINNER
SNAPNAMES
© Sedo.com LLC, 2007 10
ccTLD Domain Sales
• Chat.de $470,848
• Travel.tv $65,000
• Domain.co.uk $55,783
• Hotels.jp $40,000
• Blog.ca $20,201
• Food.us $20,000
© Sedo.com LLC, 2007 12
What is Domain Parking
• Monetize unused domains’ traffic through advertisements
– Newly registered domains – Expiring Domains– Domains without hosting
© Sedo.com LLC, 2007 14
Primary and Secondary Market are Merging
• Ancillary registrations and hosting
• Improves customer experience
• Creates customer loyalty
© Sedo.com LLC, 2007 15
Registry Benefits
• Domain investing benefits registries
• Maintain profitability into the future
• Ensure success of the TLD
• Secure market efficiency
© Sedo.com LLC, 2007 18
Valuation Factors• TLD• Length• Traffic / Visitor Numbers• PPC Earnings• Internet affinity• Easyness to remember• Comparable domain names• Typing error sensitivity• Advertising and branding potential• Trademarks• Search engine friendliness• Potential• Trends• Trademarks• Motivation of Buyer / Seller
© Sedo.com LLC, 2007 19
Domains vs. Old-Economy-Assets
• Real estate• Stocks• Billboards• Radio frequencies• Telephone numbers• License plates
© Sedo.com LLC, 2007 20
What we can learn from stocks (III)
DividendStocks
TakeoverTargets
Growth Stocks
Stars
Profits/EPS
Growth
© Sedo.com LLC, 2007 21
What we can learn from stocks (III)
DividendStocksP/E: 10
TakeoverTargets
P/E: 5-10
Growth Stocks
P/E: 30-infinite
StarsP/E: 10-30
Profits/EPS
Growth
© Sedo.com LLC, 2007 22
What we can learn from stocks (III)
Typos(youtune.com)
Junk(myjunkyard.net)
Brand Names(vodka.com)
High-TrafficBrand Names(games.com)
Traffic
Brand/Resale Value
© Sedo.com LLC, 2007 23
What we can learn from stocks (III)
Typos(youtune.com)
P/E: 1-3
Junk(myjunkyard.net)P/E: 0 (expire)
Brand Names(vodka.com)
P/E: 20-infinite
High-TrafficBrand Names(games.com)
P/E: 4-20
Selling Domains is part of every strategy!
Traffic
Brand/Resale Value
© Sedo.com LLC, 2007 24
New gTLDs / Quasi-gTLDs / ccTLDs
Buy ↑
• .info• .us• IDNs• ccTLDs
(like .de)
Hold ↔
• .eu (down-graded!)
• .com, .net
Sell ↓
• .biz• .cc• .ws• .tv
© Sedo.com LLC, 2007 25
Future Trends in the Secondary Market
• Diversification• Internationalization• Lower Transaction Costs• Higher Sophistication