2020 was a difficult year for the world. COVID-19 has disrupted both the health of nations and the economy. The impact on businesses has varied. Businesses that depend on the people who come forward – think restaurants, gymnasiums, and hotels – have been hit hard. Conversely, companies that benefit from online activity have seen a windfall. Shares of Zoom, the now ubiquitous video conferencing platform, have soared by more than 600% this year. Let’s see how the changing business environment has impacted domain sales and investments in 2020.
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Foliage on the Web
Companies quickly tried to adapt to the new world. They have found ways to best offer their products and services on the Web.
Restaurants have added online ordering of takeaways and yoga instructors have begun to deliver computer classes.
This has led to an increase in domain name registrations. Domains are required for a web presence, so they are a good indicator of the number of companies that create web presence.
This became evident in the second quarter of this year (April-June), when people around the world registered 11.1 million new domain names .COM and .NET. That was 800,000 more than they had registered in the same period of 2019.
And in the third quarter (July-September), people recorded one million more domains .COM and .NET than in the third quarter of 2019.
Services that help people create online websites have seen a similar increase in the number of new customers.
What about the secondary domain market?
Normally, you assume that an increase in the number of people creating online businesses would result in an increase in sales of after-sales domains (sales of already registered domains).
These are not normal times, however.
People keep a close eye on their bank balances. Businesses are struggling to make ends meet.
For the record, some investors in the field are having their best year. But larger datasets paint a different picture.
We may know of two markets: one strong for low-priced domains and one for sales of expensive domains.
It makes sense. People will be careful before spending a lot of money on the estates.
With a few months to go, DNJournal did not list sales of seven-figure domain names in 2020. Only two domains sold for more than $500,000.
Compare that to 2019, which recorded six domain sales over $1 million, and 13 that sold for more than $500,000.
So far, by 2020, the NameBio domain name sales database is reporting $93.3 million in domain name sales.
The rest of the year will need to be exceptionally strong to reach last year’s total of $150 million. However, last year included an outlier sale of Voice.com for $30 million, suggesting that this year’s total could be slightly lower than last year’.
DNJournal and NameBio can only track public domain sales data. Many domain sales are private and Escrow.com manages many of them.
Escrow.com reported that total transactions for domain names increased from $85.8 million in the first quarter of this year to $55.2 million in the second quarter.
(As another sign of COVID’s impact on businesses, Escrow.com saw a slight increase in transactions involving personal protective equipment and car use during the first half of the year.)
A mixed bag
The data show that COVID has had an impact on the secondary domain name market.
This impact seems somewhat segmented, with strong sales at the bottom of the market as companies move online, but sluggish activity in the high end.
Of course, the pandemic will not last forever. While some domain investors are in trouble, the future remains bright.