Euros vs. Dollars in Domain Names

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If I sold a domain name in June 2001 for $1,000,000, it would have only been worth roughly €1,173,000 Euros. If I sold the same name for $1,000,000 in November of 2002, it would have been worth roughly the same amount in Euros. Today, if I sold a domain name for $1,000,000, it would only yield €637,800 Euros. The name would have to have sold for close to twice the price to equal the same value.
While the value of domain names has risen over the same time period, the appreciation of the domain’s value may lose out to the depreciation of the dollar. When considering whether to accept an offer, it’s important to keep in mind.
Clearly, with the lower valuation of the dollar, domain names are becoming cheaper to buy for European investors, although I haven’t noticed an uptick in European investments. I am not an economist and can’t speculate why, but the declining value of the dollar may make you think twice about turning down a large offer and using those funds in a non-US dollar-driven investment vehicle.

1 COMMENT

  1. Great post, yes due to the us dollar going backwards you are spot on that the European investors can pick up great domains at a “bargain”.
    Keep up the GREAT WORK you have GREAT knowledge and wisdom.

  2. It’s so true. I spoke to several European domainers at TRAFFIC and they were all pleased as punch to be able to snap up names that most American domainers had to bow out of bidding for.

  3. The US dollar’s dropping primarily for three reasons:
    #1. The ballooning national multi-trillion dollar debt due to the fed gov’s profligate spending (which we’re complicit in because we keep voting for the politicians promising us the most benefits…even though by doing so we only shift their ultimate high cost to our children, their children, etc).
    #2. Relatedly to #1, the fed gov must keep borrowing from others to fund all these benefits (via treasury bills and bonds); with much of the money coming from non-us institutions, govs, and individuals.
    #3. The Federal Reserve continues to lower interest rates (which they pretty much have to do) to levels far below what other countries’ central banks are charging; which makes dollar-denominated investments like CDs worth less.

  4. If I may put a positive spin on it. The opportunity for a weaker dollar allows for greater outside investment. It is an entry way into our names, businesses and concepts for those that might not have been able to purchase them in the past. It allows for greater global access to what we have and broadens potential buyers for the future. We all need to hang tough until it gets better, which it will.

  5. As an American, I really hope for a stronger dollar. It’s a sign of economic health. But in terms of domains, what Michael Castello said is very important. The lower dollar makes domains much more attractive abroad and as the marketplace becomes increasingly international, this is a positive for domainers. Elliot, the emphasis on your example above is a situation where your property became more valuable to a European because of the lower dollar. It didn’t really hurt you.

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