Early this morning, Escrow.com shared an extensive report “tracking the rate of returns on domain name transactions historically and in the final quarter of 2018.” Dubbed the Escrow.com Domain Investment Index, this report aims to educate the market about the viability of investing in domain names by sharing data from sales transacted via its platform. Today’s report is the inaugural edition of the report, and it appears the plan is to publish it quarterly.
Because of its position within the domain name industry, Escrow.com has an extensive trove of data, especially for mid to high value domain name sales that have not been publicly reported. Perhaps tellingly, the company is able to observe and track domain name sales, including the resale of the same domain names by clients.
Here’s an excerpt from what I was told about the report and Escrow.com’s opinion on domain name investing at this point in time:
“Drawing from data provided by Escrow.com, which has processed more than USD$3.9 billion worth of transactions to date, the inaugural Escrow.com Domain Investment Index report demonstrates the emerging place of domain names in the broader portfolio of investments available today, and outlines the viability of domain names as a mainstream investment option. Indeed, the data in the report demonstrates how investing in domain names like investing in virtual real estate.
We believe that domain names as an asset class are undervalued. If you buy a shopfront it would cost millions. For example, Tiffany’s spends USD$20M a year renting its fifth avenue shopfront. Yet you can still buy an Internet shopfront cheaply.”
It will be interesting to see how this view changes and evolves over time, especially if this thinking changes from quarter to quarter.
As I share this with you, I am at NamesCon in Las Vegas and have not had an opportunity to read the report yet.
I uploaded the report PDF, and you can access it here.
Here’s the Executive Summary of the report that was shared with me:
“The Escrow.com Domain Investment Index for Q4 2018 provides a snapshot of the domain name market during the 2018 December quarter, set against the backdrop of previous quarters.
The latest data from Escrow.com, the leading provider of secure online payments and online transaction management for consumers and businesses on the Internet, reveals that there continues to be certain elements that make some domain names more valuable than others. Indeed, some types of domains, particularly those comprised of fewer numbers or letters, have seen a marked rise in value over the past quarter.
Just as ‘High Street’ real estate can command a higher price than other properties, domain names with two and three characters, for example, have seen substantial increases in terms of median price — especially in the most recent quarter. Meanwhile, those with two numbers have fallen, compared to the previous quarter and the corresponding quarter the year prior.
At the same time, some markets have seen an increase in total domain name transaction value while others have waned, with the United States appearing to increase its already substantial transaction value while China sees a fall.”