Last year was extremely challenging for the world. Coronavirus (COVID-19) upended both the health of nations along with many of their economies. The impact COVID-19 has had on businesses varies. Companies that depend on people showing up in person – like restaurants, gymnasiums, and hotels – have been hit harder than most others. Conversely, businesses that benefit from online activity have seen a boom. Shares in Zoom, the now popular video conferencing platform, soared more than 600% in 2020. Let’s take a deeper look at how the changing business environment has impacted domain sales and investments last year.
Flocking To The Web
Businesses have quickly tried to adapt to the new world. They’ve found ways to deliver their products and services through the web as best as they can. Restaurants have added online ordering for takeout and yoga instructors have started delivering their lessons via the computer. This has all led to a surge in domain name registrations. Domains are required for a web presence, so they are a good indicator of how many businesses out there are creating a web presence.
This all became apparent in the second quarter of 2020 (April – June) when people worldwide registered 11.1 million new .COM and .NET domain names. That was 800,000 more than they registered during the same period of 2019. In the third quarter of last year (July – September), people registered a million more .COM and .NET domains than the third quarter of 2019. Services that help people create websites online have seen a similar surge in new customers.
What About The Domain Aftermarket?
In normal times, you would assume that an increase in people starting online businesses would translate to a rise in domain aftermarket sales (the sales of domains which are already registered). But keep in mind, these haven’t been normal times. Last year (and even still into the new year) people are watching their bank balances closely. Businesses are still struggling to make ends meet.
Some domain investors experienced their best year ever. However, larger datasets from last year paint a much different picture. It could be that there were simply two different markets: a strong one for low-priced domains, and a weak one for expensive domain names. This would make sense when you consider everything that happened. People will be cautious before shelling out lots of money for a new domain name.
With the last day of 2020 recently passing, DNJournal has charted only one seven-figure domain sale in 2020. Only three domains have sold for between $500,000 and $999,999 USD. Compare that to 2019, which had six domain sales over a million dollars, and 13 which sold for more than $500,000.
Last year, domain sales database NameBio reports $118.9 million in sales. However, 2019 included the sale of Voice.com for $30 million, suggesting last years total might be just slightly below the year before. NameBio reports a total of $151 million in 2019.
Popular domain escrow site Escrow.com reported that total transactions for domain names dropped from $85.8 million in the first quarter to $55.2 million in the second quarter.
Another major sign of how COVID-19 has impacted businesses would be Escrow.com seeing a big uptick in transactions involving personal protective equipment and used automobiles during the first half of last year.
The data above shows that COVID-19 has had an impact on the domain name aftermarket. This impact seems to be somewhat segmented, with strong sales at the lower end of the market as businesses move online, but sluggish activity at the high end of the market. This pandemic won’t last forever. While some domain investors are struggling, the future does remain bright!