Rapid Rise in 4 Letter .com Values

Elliot Silver
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Like an elephant in the room, the 4 letter domain craze can’t be ignored anymore. While most of the average names were worth anywhere from $10-40 for many years, the values seem to have risen to between $150-200+ within the past few weeks. Everyone seems to want to get their hands on these names, and although I don’t see a reason for the rise in value other than speculation. I’ve seen all the arguments about why they have considerable value and why people are buying them so rapidly:

    – End users want them because there are many acronyms
    – Many stock symbols are made of 4 letters
    – Easier to recall than longer domain names
    – They are rare
    – There aren’t any left to register

The impetus came a few months ago when a domain investor decided to buy the remaining LLLL.com domain names that were available to register. When people saw that these names were no longer available for the registration fee, they began paying much more to acquire these names. The values rapidly rose, and now we are at price levels that I believe may be unjustified.
Although I own a few of these names and I have friends that own them as well, I think the hype is

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Wire: Threats to the Domain Industry

Elliot Silver
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This morning’s article in Domain Name Wire is an important read for anyone who has money invested in domain names. There are many serious threats to our industry, and if we don’t take some sort of action, the threats could be detrimental to the survival of this industry. When significant money is being made in an industry, there will always be outsiders who want to get their hands on some of the money, and if we don’t get together as an industry, it will be much easier for them to do it.
On a personal note, I am a Professional Member of the Internet Commerce Association, and I encourage everyone with the financial means to join at a level that is comfortable. I’ve met Michael Collins, the Director of the ICA, and I know he is working tirelessly to help protect the industry. The sooner we band together and protect our assets, the better it will be for everyone in the industry.

Domain Industry Making News

Elliot Silver
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The domain industry has made the news again this week, this time with an article appearing in Investors Business Daily (found on CNN). With the domain industry maintaining its strength, mainstream news outlets are taking notice and beginning to cover the industry. These positive articles discuss how the industry is becoming more mainstream, which will continue to make venture capital companies more comfortable when investing millions of dollars.
Here are a few other recent articles that have appeared in mainstream press:
Christian Science Monitor
The Telegraph (UK)
International Herald Tribune
While much of the world’s economic systems are going through tumultuous times, the domain industry appears to be strong. The continued success and growth of the industry is leading to greater focus as it’s becoming an alternative to traditional investing vehicles. As more venture capital firms invest in the domain space, I believe we will see similar articles in the mainstream press. With the domain industry becoming less secretive, the fruits the industry bears may become even more lucrative.

Domain Industry in the News

Elliot Silver
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It’s always neat when I wake up and there’s an article of relevance to me in the New York Times. Page One of this morning’s New York Times Business Section features an article about the domain industry, focusing on the growth of the industry while many other industries (especially physical real estate) are stagnant or losing value. The article comes on the heels of DomainFest in Los Angeles, which featured live and silent auctions ending with somewhere around $4 million in domain sales.

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Oversee.net Receives $150 Million Investment

Elliot Silver
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As discussed on TheDomains.com, Oversee.net received a commitment for a $150 million investment from Oak Hill Capital Partners. The transaction is expected to close by the end of January 2008. Oversee.net recently made news with their acquisition of domain registrar Moniker, and the transition to working as one collective unit has already begun. I received an email this afternoon with the subject, “SnapNames and Moniker Collaborate on Internext Domain Auction.”
According to Conde Nast publication Portfolio.com, “the funds will be used to boost growth and to acquire technologies that will enhance its suite of services.”
Let’s hope future acquisitions continue to help individual companies build upon the strong foundation of its buyer.

Network Solutions' Defensive Measure for Whois Searches

Elliot Silver
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Say you want to buy the domain name HelloElliotsBlogReaders.com at Network Solutions, and you search the availability of that name. You see the name is available, but you would prefer to buy it at Godaddy. Ten seconds later, you look the name up at Godaddy to complete the registration, and POOF, the name is no longer unregistered, and it shows up as being registered by:
Domain Name: HELLOELLIOTSBLOGREADERS.COM
Registrant:
This Domain is available at NetworkSolutions.com
13681 Sunrise Valley Drive, Suite 300
HERNDON, VA 20171
US
It now appears that Network Solutions is registering domain names that are looked up on their Whois system as a “defensive measure” against people who may be able to screen their searches, affording searchers the time to register their names without worrying about them being picked off. This seems like a drastic measure to try and stop an apparent leak in the system. The problem is that by doing this, Network Solutions is preventing customers from registering the domain name at the registrar of choice. The name is still available to register, but only if done at Network Solutions.
As DomainNameNews points out, just imagine the possible litigation they could be risking if someone searches for hundreds of trademarked domain names.
Read more details at Jay’s Domaintools blog.

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