Home / Domain Sales / Despite poor economy, domain prices on the rise

Despite poor economy, domain prices on the rise

good economy
With the economy at rock-bottom, stock prices have fallen dramatically over the last year. One might expect domains to follow a similar trend, however, the average auction price for a name has increased– from £1,282 last year to £1,757!

This year has also seen quite a few high-price domain sales, such as toys.com for £3.11 million ($5.1 million USD) and candy.com for £1.8 million ($3 million USD). The number of domain sales as well as the prices best resemble the 1999 .com boom.

I don’t know if the rise in prices is a sign of investors turning to the Internet in light of the poor stock market, a realization that the web exists and is actually profitable, or both. As I have stated in the past, I think the rampant speculation that is plaguing the domain market will be its downfall. We will see another .com bubble burst similar to what happened in 2001.

There are some valuable domains out there, but many investors seem unable to discern between a good piece of web real estate and cyber junk. I see domains that wouldn’t have even been registered three years selling for several times their registration fee on auction sites.

A perfect example of the perilous investments being made is Craig Harrison, who spent more than £21,097 ($35,000 USD) on 2,600 essentially worthless real estate domains. He then partnered with an auction to sell them in what he called “the next Internet gold rush.” Granted, the names didn’t sell, but the fact that several parties were interested and an auction house took him seriously is bad enough.

Many of these “domainers” know little to nothing about the web or its economics. They are not seasoned veterans and think anything they register must be worth something because, after all, if someone else can make money online, then it must be easy. A lot of people are going to get burned. It could be next month or maybe two years now. In either case, I don’t want to be around when the boiler explodes.

Check Also

Domain Name

Important tips worth considering when searching for a domain name

A domain name refers to the web address that people have to type in the …