TRAFFIC Moniker Auction: The Bigger Story
Today, some of the biggest investors in the domain name industry, (professional domainers), are concluding the week long conference on the state of the domain name industry and domain name investments. The culmination is always a rousing auction of some keyword generic domain names that were submitted to Moniker well in advance of the auction, to be sold to other domainers and T.R.A.F.F.I.C. attendees and proxies at these events.
In the past, each auction has received a lot of press for the millions of dollars that were invested on domain names during the auction. That’s a big story.
But there’s a Bigger Story, to me, (and in the press and blog coverage of prior conferences I’ve not ever seen this mentioned). The Bigger Story to me is the domain names that start off well in the auctioning, then reach a certain level and bidding slows down, and then stops. The domain name may have (and often does) reach several hundred thousand dollars, and even over a million dollars in some cases, but then the reserve is not met and the sale is not made.
Who would not sell their domain name for a million dollars or more when the buyer is sitting right there ready to pay cash? The domain owner, that’s who. And that’s the Bigger Story.
What does this tell us? What does the current domain name owner know about that domain that makes him keep it, and walk away from a boatload of cash? He or she knows that the domain is profitable. That the domain is making a lot of money. That the domain is too valuable to let go for a a mere $1.3M bid.
People in the know understand that the majority of large domain name sales are never published. The prices that are published are often the lower end sales (even when they seem high to the rest of the world). So you have to look at other indicators to gauge the value of domain names, if you don’t already have your own sense.
One of the indicators I look at for how the domain industry is progressing, is the domain names that are NOT selling. Just as a company buy-back of stock impacts company valuation and stock prices, (because you can see and understand, definitively, that the people closest to that company and its assets clearly have a high valuation of their own stock), you can tell when a domainer values their own domain names beyond the present offers. And that’s why they’re not selling at such low prices as the $million plus that they were offered. (This does not include those who put nutso prices on their domains, without any basis for their valuation; I’m talking about people who are using their domains, understand the cash flow or emerging industries of their domains, and the business case that justifies walking away from cold hard cash of a serious nature.)
Today, as the auction progresses, I will be watching for new chapters in The Bigger Story, and watching for who is NOT selling which domain names at what prices.