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Media Options: State of the Nation

TLD.org has written on op-ed post about their speculation on the domain aftermarket; one that relied heavily on the actions of Media Options and our domain investment operations.  It was written without thought or comment from Media Options and was completely off base in interpreting our decisions and actions in the domain aftermarket and as such provided an uneducated commentary to domain investors who are uncertain about the current market and looking for information to make important investment (or divestment) decisions.   In response this piece, I have written a long comment which addressed their concerns with facts, figures and actual thoughts behind these issues.  After writing this comment I felt, and was advised by others, that our comment and thoughts there-in are important and of interest to the greater domain market and should be posted as an entirely separate article on our own blog.  Here it is:

1.  First off, Media Options has NEVER marketed our owned and operated domain names to end-users.  Never.  Not even once.  We spend our time, energy and resources selling our client’s domains.  That is a fact.  That is a policy.  It has never changed.   When we do sell our names, it is only when we are approached on an inbound inquiry or we actively put them in an auction, most commonly Namejet, although we have experimented with others as well.  If you buy a domain from Media Options on Namejet you can be 100% certain that this domain has been on the “sideline” so to speak.  It has NEVER been marketed to end-users.  It has NEVER been shopped around in the aftermarket or on forums (unless that is where we bought it ourselves).  Much to the dismay of many other active buyers in the aftermarket we rarely sell our names to other domainers.

Media Options has been selling domain names on NameJet for at least 3 years (maybe 4).  We have always done so privately and without promotion, banners or marketing of any type until recently when we decided to “brand” our auctions via Namejet.  We want to act as a “curator” for these types of auctions which benefits all parties involved.  We bring more attention, publicity & ultimately buyers to a Namejet auction than an individual seller could achieve themselves merely for the fact that we sell such large volumes on NameJet and make investments into the promotion of those auctions.  Yet by selling through us and allowing Media Options to manage your auction, you pay the same commission you would as if you went direct to NameJet.  Media Options was the first and only domain broker to be given an agreement to sell 3rd party domains on NameJet, meaning we were selling client’s domains in addition to our own owner operated domains.  That has very recently changed and some others have followed suit, but I think it is important to emphasize that we were the first.  The majority of the large sales you have seen on NJ from Media Options are client names such as:  LOV.com, OAI.com among others. But yes, we also sell our own names as well. Media Options is going to be making an announcement very soon about some entirely new domain brokerage products that we are going to be offering to our clients and the domain market at large.  Much more in line with a domain sales manager / sales lifecycle manager, offering the highest opportunity for anyone to sell their domain at the highest possible price the aftermarket will pay at any given time.  NameJet auctions will be one component of this offering.

2.  Media Options only does end user brokerage on domains that we feel we can sell for at least $75,000 (occasionally we make exceptions) and in most cases $100,000.  These are NOT the domains we sell on NameJet.  We do “end user brokerage” the old fashioned way.  We make hundreds of calls and send hundreds of emails and knock down doors to find qualified buyers for our client’s highest value domain names.  Our End User brokerage is entirely separate and independent of our aftermarket or “wholesale” operations (which is what is mostly being discussed in this comment as well as the article to which it pertains).

All other domains which don’t fit our “end user” criteria are marketed and sold using our Media Options Domain Newsletter (the longest consistently standing domain sales newsletter in the industry), social media, marketplace and website which receives thousands of qualified visitors every day.

In case you have never checked, Media Options ranks in the top 3-5 organically in Google for “Domain Broker” & “Domain Name Broker”, among many other terms.  This visibility drives a tremendous amount of qualified leads and helps us sell our client’s domains very effectively.   The only companies that come close to the PR, SEO & organic search traffic investment that we make are SEDO and GoDaddy, both of which we do not consider competitors as they are much larger companies and do not operate much in our specific niche.

3.  Media Options has been one of the most aggressive “traders” in the LLL.com market for years.  By trader, I mean that we are constantly buying and selling.  In fact there are probably only 3 other buyers in the domain aftermarket who have bought, sold, brokered & traded the amount of 3 letter .com domains (2 letter .com domains as well for that matter) that we have over the last 2-3 years.

At the same time that we are selling some of our LLL.com domains on NameJet, we are also BUYING MORE!  For every one LLL.com we sold on Namejet over the last six months, we have bought at least three more.  In fact, in the last 30 days alone, we have acquired nearly 20 super premium LLL.com domains.  We have in fact, over the last 60 days (or less) invested $900,000 of our own capital into the acquisition of premium .COM domain names (with a few exceptions like yt.org, vr.net & rw.org).  Just to name a few of our acquisitions, we have bought:  Blood.com, SRE.com, Frozen.com, RainDrop.com, Diw.com, Atlantico.com, PX.net (we already own PX.com), TRO.com, Flap.com, BER.com & hundreds more!

4.  Some people have mentioned to me that they feel Media Options buying & selling operations are a conflict of interest with our brokerage business.  I would in fact argue the exact opposite.  Most other brokerage firms in our business have a strict policy against buying domains or maintaining an owned & operated portfolio.  Of course Frank Schilling’s Domain Name Sales is one of the few exceptions (seems to work just fine for them!).  Our regular trading activity gives us a unique insight into the current domain aftermarket which few individuals in our industry have.  I can name on 2 hands the number of individuals in our industry which are what I would consider highly active and aware in the CURRENT domain aftermarket.  People that can tell you the “spot price” or value of any name in today’s market if you need to sell.  Not because they are clever, but because they are buying and selling domains in that market every single day.  There are plenty of people who write about the aftermarket.  Plenty of people who offer advice about the state of the aftermarket.  There are brokers out there offering up “white papers” and knowledge bases and articles containing their speculation about the current state of the aftermarket and values of certain types of domains.   Most of it amounts to just that, speculation.  It serves two purposes:  click bait & attracting sellers by telling them their domains are worth far more than they actually are in reality.

As Media Options’ CEO, I make buying and selling decisions on a daily basis both for our clients and our owned and operated portfolio.   I am trading domains every single day including Sunday.  I can tell you today what your domain is worth in the aftermarket and the answer I give you will be different than the answer I would have given you a week ago; because on a micro level, the market is in a constant flux.

We always sell domains on Namejet to make sure we have the most recent and REAL market data.  Any broker can tell you whatever you want to hear about the value of your domain.  I can tell you the truth.  I can tell you exactly what your domain is worth TODAY because we probably sold something similar yesterday and bought something else the day before that.

I am not writing this to compare our brokerage business to any other.  I think the way we operate is unique; it’s not for everyone.  What my intention is from this epic post is to set the record straight about our motives in selling domains and the current state of the domain aftermarket.  The aftermarket is alive and well.  In fact I’m more bullish on domain names now than I have been in the last 18 months.  There has been a lot of speculation about domains and their future.  There has been a lot of speculation about what would happen to .com in light of 1,000 new gTLD’s.  There has been a lot of speculation about the domain name system and how we navigate the Internet in general.  In my eyes, and in the opinion of many other smart people in our business that I trust and look to for advice, many of those questions have been answered and a clear path has been laid out as to the way forward and how all of this is going to play out.  That path is paved in gold!

I have never been so bullish on domains.  I have never seen such a rise in domain values (good domains, premium .com domains) ever before in history.  Some call it a bubble, I call it an awakening.   Rick Schwartz had a 20 year plan and it is no coincidence that the end of the rainbow is 2015.  It is going to be an exciting year and those who are sitting on premium domain names are going to be rewarded.  Those who are not , are going to have a much higher cost of entry to the party if they want to come and play.   Bubbles are built on credit.  Bubbles are built on speculation.  Neither one applies here.  There is no meaningful form of credit in the domain industry, domains are paid in cash which puts a floor on the value of nearly all domains except in that rare occasion that someone NEEDS to sell fast.  But that is an exception, not the rule.

Speculation insinuates that there is no precedent.  It means that the market is guessing.  Well, I can say without a doubt that guessing and luck have nothing to do with what is happening in the current domain market.  Prices are rising and it’s because there is more light than ever being shined on the domain industry as a whole as a result of new gTLD’s and that is only going to continue in hockey stick growth.  There is more money flowing in from outside than ever before.  There are more people online than ever before.  There are less available premium .com domains than ever before.  There are more businesses that require a web presence than ever before.  More local companies in foreign markets are expanding their businesses globally than ever before and .com is still the most important domain extension to do so.

What do I think about new gTLD’s?  I think it’s too early to say.  Anything I say is speculation just like anyone else and I don’t speculate.  Nobody knows.  Nobody.  But what I do know is that it’s an interesting proposition.  It’s a interesting supplement to the existing naming framework.  It offers endless new branding and naming possiblities to those that can’t afford to pay the real value of a premium .com.  I think it’s foolish for anyone to speculate that new TLD’s of any sort will be worth more than the corresponding .com.  But I also think in some unique examples there is potentially more value, but again, exception, not the rule.  Most importantly, I think there is plenty of room for everyone.  Plenty of room for new gTLD’s.  In fact, I think new gTLD’s are the best thing to happen to .com!   A rising tide lifts all boats (as long as your boat doesn’t have a leak)!

In summary, I want to be abundantly clear.  We, Media Options, are highly bullish on .com domain names.  I am confident that values are only increasing on premium .com domains and I currently see no obstruction to that growth beyond ourselves.  Be it short domains like LL.com and LLL.com or brandable generic keywords; they are all going UP!  There is less certainty with long tail domains, however, I must say, and certainly more pressure on .net & .org domains as more options become available.  If you are not the first choice then you are only as good as other available options and now there are many.

I want to be clear that when Media Options sells domains on NameJet, it is because we are constantly testing the market.  We are constantly looking to validate our price assumptions.  We are constantly questioning our decisions and opinions.  We are constantly putting our money where our mouth is.   We are not scared of the market and we are not liquidating.  Far from it in fact.

Lastly, Media Options is a NET BUYER, NOT SELLER.   90% or more of all of our earnings from domain name sales & brokerage operations are re-invested into further domain acquisitions.   If you go to the guys I call “domain chasers” or suppliers, the guys who are every day tracking down original owners of old domains in order to buy them for a quick flip, and you ask who are your biggest buyers, nearly all of them would include Media Options on their list.   We are quiet.  We are private.  We are discreet.   We do not flaunt our domain purchases, nor our sales.   We help provide liquidity in a completely illiquid market.  We help set a FLOOR on premium domain names in the “wholesale” market.  This gives us the ability to intelligently advise our clients about the value and marketability of their own domains.  It tells us who the buyers are.  It tells us who the sellers are.  Most importantly it provides us a perspective into the domain market that few on Earth have because quite frankly, they don’t have skin in the game!

 

About Andrew Rosener:

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