NI-Limits Blog

Earlier this year, Domain Tools offered an interesting article concerning the marriage of domain names and the multi-million dollar market-place for premium domain names:

Imagine if when people purchased houses they were not allowed to have mortgages. Sit back and just ponder that for a minute before reading the rest of the article…. When people can purchase $10M dollar domains for $500K down with a 5 percent interest rate that is when we will see the most valuable of domain names start trading hands with the smaller investors. Travel.com is easily worth $50 Million. However not one domain investor has a wallet big enough to afford swallowing it in one bite. No one buys assets that big with all cash. Domains like these will never trade hands until institutional money starts backing our industry.

If you can afford a domain like Travel.com for $10M right now, you will be laughing all the way to the bank in a few years when financing catches up with our industry. $10 Million would be a steal for anyone that purchased Travel.com at this price. Not many people can purchase with all cash right now, but those that do get a good discount because there is a small supply of super rich guys with all cash offers. It all comes back to supply and demand. How many people purchase a house with all cash? If I was the owner of Travel.com I would never sell for $10 Million right now. I would hold out until the institutional money shows up and allows purchase prices to climb into the 10 digit range. Hotels.com was purchased for a song a few years ago, the new owners of this property now know the true power of generic signature domains.

Later in March of 2008, they reported again on the sale of Fund.com
for US$ 10 Million:

Well, technically it sold for $9,999,950 in an all-cash transaction, though I am not sure why $50 was withheld from making it an even $10M. Even in this slow market we are seeing record-setting sales figures. A publicly-reported transaction of this size is rare, I know of a few domains well above $10M, such as Poker.com and Sex.com, that never officially disclosed their prices. The few runners-up so far have been Business.com and Porn.com which both didn’t quite make it to the $10 Million dollar range but were very close.

It takes a lot of work to broker a domain at this price, what could have been registered for nothing 20 years ago is now worth more money then one man could spend. The generic domains that command power are these category domains.