Affiliate Summit registrants found something in their inboxes a few days ago that might have more than one looking quizzically at the message and perhaps even more hitting delete. It was easy to see why. The subject read, "Moniker’s Master Auction Inventory Announced." That same sentence headlined the message followed by an opening line stating, "The first cut of more than 2,000 domains that will be included in the Live and Silent Auctions at Affiliate Summit are now available for download." Too bad nowhere in the email does it explain who or what a Moniker is or sell readers on why those attending Affiliate Summit should care about bidding on domain names. They seem like two different worlds, affiliate marketing and domain name buying. And, for now they might remain that way, but how closely they relate to one another doesn’t matter. Just the receipt of this email represents something bigger than we might expect; it signals a new dynamic to both conferences and internet real estate. And, whether you participate in this auction or not, it is worth understanding it’s significance.
I registered my first domain name in 1998. I’ve always had a fascination with them but never the foresight to purchase many like a land speculator. I simply came up with a name that I thought would make for a descriptive and memorable brand. That worked for Google, Yahoo, YouTube, and has long worked for pre-internet brands like Nike, Microsoft, and countless others. Herein lies the oddity of domain name ownership. In 1998, CaliforniaRefinance.com was available, but I would never have thought to buy it. The same hold true with ValetParking, SofaCushions.com, and a plethora of non-obvious generic names. Savvy speculators rushed in and quickly purchased obvious generic domains, ones like Sex.com, Love.com, Business.com, News.com, TV.com, and so on. They may or may not have intended to build a business, but upon the general public being able to buy domain names they, at the very least, recognized the potential value, and many saw incredible returns on their early efforts in the first dot-com wave by selling them for millions of dollars.
When the dot-com bubble deflated in 2000, many who had registered domain names earlier, either to build or sell, let their renewals lapse. At an average cost of $35 per year, if you had more than a few, the costs started to accumulate quickly. Imagine owning "just" a hundred or perhaps even a thousand, and looking at thousands or even tens of thousands in renewal fees. During this time, domains began to look less like a money making vehicle and more a necessity if you wanted to start a site / business. Domainers though, with domainer being a term used to describe one who makes their living off domains, never gave up on the ownership of names. They continued to look for a way to make money off an asset in which they believed, and since the resale market was repressed, they turned their efforts towards finding ways to cover the registration fee. Think of a land owner with land on the side of a highway who agrees to earning money from an outdoor advertising company while they wait for the right timing to build or sell. In the online world, paid search, and to some extent affiliate marketing, became the billboard revenue for domain name owners.
By 2005 and especially 2006, stories of domain name owners making large sums of money off their internet real estate began to surface, and the industry started to attract the attention of the larger world. No longer did a parked domain mean squatter; instead it started to mean real business, as users continued to show that some percent would type their search into a browser and add ".com". Still, the ownership of domains as investment vehicles remained largely within a small community. More specifically, if you wanted a certain domain name or had an interest in creating a portfolio, if you didn’t know a domainer, you would feel lost. Those in the space would read DNJournal and a few forums. They would have attended the first domain name conference series and known about not just large domain name holders making millions off parked pages, but more importantly the return of the high dollar value, single domain name sales. The information and the access was never really available to the general public. Think of art of cars. Collectors know when the auctions take place, and they track which pieces or cars go on sale when and where. If some amazing sale takes place the rest of us might hear about it, but that’s about it. Until now, that’s just how the domain world worked, and it’s what makes the domain auction at Affiliate Summit so monumental. It’s the first such event held outside the rather insular community, and in my opinion, it represents a tipping point in the domain market.
The precursor to this event took place recently in New York. Moniker, the same company hosting this auction, has long participated at the domainers tradeshows, but only recently have they taken a leadership role at the auctions, formalizing them and having them operate more akin to Sothebys – with a live auction, call-in, silent, and absentee options. At the New York show, probably the third "real" auction, the results surprised just about everyone. They sold $12.4 million worth of names, $10.9 million during the Live Auction and $1.5 during the online component. Two domains sold for seven-figures – CreditCheck.com which included FreeCreditCheck.com fetched $3 million and Seniors.com $1.8 million – with an additional 14 others selling for more than six figures each, e.g. Cardiology.com for $550,000. In total, 115 domains sold during the event with an average of $96,000 each. I don’t expect the same to happen at Affiliate Summit. Some affiliates are domainers and will seize the opportunity to snap up names that might sell for more in a more competitive landscape. Again, though, the story here isn’t going to be how much they sell for, mainly that those attending had a chance to buy. It won’t be long before every conference will have a domain name auction for every business group has businesses that need domains. They might not buy them to park or flip like a domainer will, but they still need them. Imagine too those who have a name appropriate for a sector now with a venue to sell them. Auctions with the right audience always do best. It’s simply an exciting first step for an industry that has made people money but not been widely adopted or understood. We’ll leave the debate for what makes a better name – a generic or unique – for another time.
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