Business Insider published an article on Saturday that takes a look at what most in our business have been discussing for months. Buyouts here, buyouts there, no more 6N.com or 4L.net. The article delves into why domain names are the perfect Chinese investment vehicle.
No customs declaration. No property taxes. No annual fees (outside of a $10 registration fee). Domestic and international escrow services. Ownership privacy. If there was ever an asset made to handle Chinese wealth, it was domain names.
The article goes on to look at other important factors such as rarity and liquidity. Nice to see LLLLsales.com get a mention.
Today is different, with numeric and short domains (often unpronounceable to the Western world) defying all traditional domain-name investment logic and shattering record charts. For example, according to DNJournal:
989.com was just sold for $818,181.
899.com changed hands for $801,000.
588.com grabbed $1,000,000.
While these type of domain names have always had value, the explosion has also led to five-number domains (like 87899.com), six-number domains and even longer combinations attracting thousands of dollars in bids.
China, after all, is a numbers culture.
And the demand doesn’t stop there.
For non-Chinese investors, domains like mzqy.com and yybw.com were traditionally of lower demand since they never passed the radio test. Today, however, four-letter combinations are bringing in ever-increasing prices. Take one look at leading auction house NameJet’s home page and you will see a vast number of four-letter dot coms or visit LLLLsales.com to view market sales activity for only four-letter domains.
On the surface, this may seem to make little sense.
But it certainly does.
The key for everyone is whether or not this can be sustained, I see names being regged out to 14N.com, names like 77777778888888.com for example. The article seems to believe if prices take a hit there is a pool of Chinese investors waiting to jump in and buy.