Even Top-Tier Domains Are Relatively InexpensivePosted: February 11, 2012 | |
The cost of buying a better domain always comes up as a potential reason not to. Despite the better domain enhancing a company’s online presence and empowering their marketing efforts for the life of the business, the cost can still turn people away.
I believe that a lot of it has to do with the notion of buying something that’s not physical. Even with the massive amounts companies like Apple and Google have spent buying patents from other companies, some are completely awestruck at the amount of money spent on top-tier domain names.
The highest single domain-only sale was Sex.com for $13 million. There have been many higher domain purchases that included sites, but generally those purchases focus more on the revenue of the site vs. the domain. Cloud.com was a recent example of that and Citrix (the buyer) value it in their financial records as being $18 million of the more than $200 million they spent to buy the Cloud.com business.
I thought it would also be interesting to take the combination of Year-To-Date top sales lists of domain sales from DNJournal and total them to see how much the highest sales really amounted to. 2004 is the earliest year of their annual lists, and a total of 1,607 sales were counted.
The total is not as high as you might think: $261,050,457.
Before I proceed, I should state that this obviously doesn’t cover ALL domain transactions – only the highest per year as noted by DNJournal. Many private transactions take place that never get reported, or their exact sales price are not given, and obviously there are many more lower sales that have occurred beyond the ones used for this sum.
That said, consider the power of high quality domains and that those domain transactions represent control over a significant powerful portion of the web.
Let’s put that number into perspective:
This single painting sold for nearly as much
$261 million buys about 5.44% of this yacht
This house cost nearly 1,000 times the highest domain-only sale
$32 billion was spent on online advertising in 2011 alone – over 100 times the sum of those highest domain sales
Apple has nearly $100 billion cash on hand – 0.261% of that makes all those domain purchases
The Apple note is worth expanding on…if it wasn’t already amazing just how much cash Apple has (more than the amount the US government has), it’s interesting to figure just what that kind of money could buy in domains.
For instance, Sedo, the largest domain marketplace, boasts over 15 million domains. Per research firm IDNX, the average Sedo domain sale price of popular extensions is $2,500. 15 million x $2,500 = $37.5 billion…if that crude math represented reality, Apple could buy all 15 million domains listed on Sedo and still have $62.5 billion left over!
So if you or anyone else you know ever gets a notion that domains sell for ridiculous prices, you know now many other figures that may indicate that they really don’t. The internet is based on domains – someone could own a powerful piece of the web for the amount of money that has been put into a single yacht or house!