This page looks at domain name auctions and sales, supplementing
discussion in the broader Domain Names & DNS profile
regarding domaining and monetisation
It covers -
following pages covers questions about 'standard' prices,
the absence of a domain name bubble in Australia, domain-based
lending and the uncertain emergence of domain name derivatives
(eg 'name futures').
Points of reference are provided in notes on benchmarks
for the dot-com bubble and collectible
prices over the past 500 years.
As we noted in that profile, domain registration - strictly
speaking - involves a licence (leasing use of an address
in cyberspace) rather than unrestricted and perpetual
In practice it is common to speak of domain name ownership
and domain name sales. In the dot-com gTLD and some ccTLDS
(particularly those, such as dot-tv and dot-am, marketed
as a competitor to dot-com) the registration regime permits
ready transfer of domain names, whether direct between
two parties or via an intermediary.
That 'secondary market' or 'after market' involves large
numbers of registrations and considerable expenditure.
the domain names bubble
The dot-com boom is examined
in a separate profile on this site. It was characterised
registration of dot-com and other domain names, often
on a very large scale (eg involving up to one hundred
thousand names) for resale to individual consumers and
other registrants. That registration was often automated.
Retailing of those 'preregistered' names encompassed
both online auctions such as GreatDomains,
and sale at a direct price. Some wholesalers also acquired
names that had previously been registered by other entities.
small and large-scale acquisition of names on a speculative
basis, ie in the expectation that the holder of a name
would make a profit - generally of several hundred or
thousand per cent - by transferring the name to an individual/organisation
for active use or for speculation.
uncritical reporting in the mass and specialist media
about prices received for transferred names and a lack
of analysis about values and market trends. Unsubstantiated
accounts of "million dollar names", unique
opportunities and substantial profits in the "domain
name gold rush" were not uncommon.
activity was underpinned by - and in turn drove growth
of - businesses that specialised in determining the supposed
intrinsic/market value of domain names, in creating new
names claimed to have a particular intrinsic value and
in further commoditising names as an 'intangible' through
for example name-based securities.
It reflected phenomena in past booms - examined in works
such as Peter Garber's Famous First Bubbles: The Fundamentals
of Early Manias (Cambridge: MIT Press 2000), and Charles
Kindleberger's classic Manias, Panics & Crashes: A
History of Financial Crashes (New York: Wiley 1993)
- where markets were poorly informed and prices for the
commodity (tulip bulbs, shares in France's Mississippi
Company, 1840s UK railway shares, 1870s US railroad bonds)
were uncoupled from any credible prospect of return from
investment in tangible property or services.
As Anthony Perkins & Michael Perkins commented in their
prescient The Internet Bubble (New York: HarperCollins
1999) at the height of the boom some domain name holders
or valuation services asserted that particular names had
an intrinsic value of several million dollars, independent
of any investment in development of a site, establishment
of e-commerce fulfilment infrastructure or other tangibles.
Why bother to engage in the messy, difficult and often
profitless business of e-commerce when you could make
money quickly and simply by playing the name game? No
pain, little risk.
One vendor for example advertised
name speculation is probably the very best way to make
money on the Internet and probably one of the least
known! It is also easy, fun, takes a very low investment
and has a huge profit potential. Businesses and webmasters
are always looking for high quality, marketable domain
names and will pay you big bucks if you have the name
they want. Many people are making a good living buying
and selling domain names. And you can too.
you can grab a million dollar domain name for $35 or
less, and then you can turn around and sell it for hundreds
or thousands of dollars
Lee Hodgson, self-styled DomainGuru,
more soberly commented
truth is that domain speculators are the backbone of
the domain name industry. They are people like you and
me - webmasters, site developers, students, investors,
doctors, musicians, consultants and journalists. They
are also small businesses and large corporations. Early
in the year 2000 it came to light that the multi-national
company Procter & Gamble had been busy buying several
hundred valuable one word generic domain names and had
decided to put them up for sale. If it's good enough
for Fortune 500 companies I really don't see why it's
not good enough for the rest of us.
US 'investor' gained notoriety (and apparently quite a
few dollars) through large-scale registration of names
that were likely to infringe corporate trademarks and
then advising the owners of those marks that it was cheaper
to acquire the names from him than for them to resort
to legal action. Such hostage-taking has now been crimped
by punitive provisions in the AntiCybersquatting Protection
The extent to which individuals and enterprises made money
by playing the game is unclear. There are no comprehensive
independent studies of prices and profits.
Most media coverage has centred on prices at which particular
gTLDs and ccTLDs
are reported to have changed hands. They include -
price tag (US$m)
price tag (US$m)
The Western Australian Tourism Commission spent $50,000
in 2004 on the westernaustralia.com name as part of a
$1.3 million revamp of the state's tourism site. In 2010
the Northern Territory government paid $100,000 for a
shelf company that comprised three names - northernterritory.com,
tourismnorthernterritory.com and tourismnorthernterritory.com.au.
The previous owner of the company reportedly paid $50,000
for the names.
Cd.com went for US$277,750 in 2006; rubbergloves.com fetched
a more modest US$19,804.
offers: it's worth what I ask for it?
Much coverage also concerned prices sought by vendors,
either directly or as an indicative figure on auction
One example was the announcement that the america.com
name - just the name - was available for US$30 million.
As of January 2003 it was on offer for US$15 million,
somewhat less than the US$1 billion sought for usdemocrats.com
at that time and presumably more realistically priced
than adiamondgeezer.com (US$2 million), homejobtrade.com
(US$5.36 million), fruitcakes.com (US$10 million) or foxyfriends.com
Another was the report that the operator of the sex.com
domain had been offered US$48 million for the name, consistent
with problematical claims
that the address received 25 million visits per day and
that the site - effectively a portal - generated annual
revenue of at least US$95 million.
The UK Financial Times more hard-headedly dismissed
as a stunt claims that the sex.com operator had received
an offer of US$85 million. In January 2006 it was announced
that the name had been transferred for US$14 million after
a US$11 million deal fell through in September 2005. The
saga has been chronicled by Kieren McCarthy in Sex.com
(London: Quercus 2007).
The registrant of Cool.com was supposedly offered US$60
million. Winding up of eToys.com supposedly involved sale
of the domain name for US$3.35 million; in fact that figure
related to all of the unsuccessful etailer's intellectual
Other figures include
a mere US$8 million for hell.com.
Consumer misunderstandings (or merely buyer remorse) are
evident in reports in 2007 that the Dallas Cowboys football
team sought to cancel its aquisition of cowboys.com after
realising that it had agreed to pay US$275,000 rather
than US$275 in a domain name auction.
Interest has increasingly turned to sales of keyword portfolios
- collections of sites that gain traffic because users
have mis-typed an URL or intuited a domain name. Sites
in those portfolios are typically used for advertising.
Relevant names may be identified through domain name
In 2005 online marketer Marchex reportedly paid US$164
million for Name Development Ltd, offering keyword advertising
across more than 100,000 domains. That deal followed US$155
million paid by SAVVIS for Cable & Wireless America
(inc some 350,000 names) and US$176 million by Freenet
for German hosting operator
Tect (inc 2.2 million names). US-based NameMedia acquired
650,000 names for its own portfolio, with 'rights' to
a further 350,000 names registered by other entities.
Domain name portfolios are discussed in more detail in
a supplementary note elsewhere
on this site.
(mapping domain name prices)