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2018-Q4 A STRONG FINISH FOR 4L

With over $8.6M in escrow.com recorded sales, Q4 sets the record as the best quarter ever recorded for 4Ls.

Welcome to the 11th edition of the Liquid Domains Overview (LXDO), which focuses on the 614,928 .com domains we call “liquid”. The objective of the report is to present key statistics and generate a debate amongst the industry stakeholders about the fair value of such domains. We hope you enjoy it and we encourage your feedback and participation for the next reports.

DEVELOPMENT INDEX AND OWNERSHIP DATA

2018 ended with a reversal of trends from Q2 and Q3, with China gaining about 22,500 domains (+3.67%) and controlling about 1/3 of all the liquid domains, especially numerics. Once again, the largest movement in ownership came from domains going from public to private. Private domains now represent 38% of all liquid domains. This is a continued trend from the inception of GDPR in Q2, which caused the number of liquid domains under privacy to almost double in less than one year. 2Ns and 3Ns have the most private registrations with over 50% of each category having masked whois data. We can again observe a correlation between average domain value and number of domains under privacy. The US controls 17% of the liquid domains, while Europe and the rest of the world excluding China, account for 10% combined.

Once again, the most developed categories are 2Ls, followed by 3Ls and 2Cs. The least developed categories are numeric domains led by the 5Ns, followed by 4Ns and the 3Ns.

SALES DATA

4Ls .com domains registered a record $8.6M in escrow.com transactions, by far the best result since the publication of this report. The second largest escrow.com domain sales volume belongs to the 3Ls, with almost $5M in transactions; followed by the 4Ns which registered one of their strongest quarters with $2.7M in escrow.com sales. There was no escrow.com data available for 2Ls, 2Ns, 2Cs, and 3Ns, but ShortNames records a disclosed 2 letter .com transaction at $700,000. ShortNames also shows $1M in public 5N transactions, consistent with 2018 sales
volumes.

The 5th percentile values continue to show single and double digits losses. 5Ns saw the worst performance at -11.63%, followed by the 3Ls at -10.62%. 3Cs also record a signi!cant loss at -7.53%. The notable exception was the 4Ls which appear to have bottomed in the prior quarter. The category registered a 12.37% 5th percentile increase, e”ectively bouncing back from the $100 support level (last quarter the value was $97) and reaching the $109 5th percentile level over 1,800 disclosed transactions. Median prices do not show any signi!cant variation, with the notable exception of 3Cs which show a 61% increase.

FORECAST

Q1 is normally a slow quarter for Liquid Domains due to the reduced activity from China caused by the Chinese New Year. Unless there are large end user transactions, we forecast a slow beginning to 2019. It will be interesting to observe whether the 4 letter’s 5th percentile values will stay above the $100 support or whether they will continue the general declining trend of other liquid categories.

About the Data

Some of the information provided in this report, such as the category breakdown, trademark analysis and valuation data was derived using proprietary systems built by Intelium Corp. or its affiliates.

The domain sales data was provided by ShortNames.com. It was also generated using automated means and through the use of proprietary technology. The data is verified on the best available bases and may be subject to inconsistencies or errors that are corrected at the sole discretion of ShortNames.com.

The Escrow.com sales data is verified on the best available bases and may be subject to inconsistencies or errors that are corrected at the sole discretion of Escrow.com.

Index, ETF and all security return data was initially computed by Morningstar, Inc. and is shown in this report for display purposes only. This data is not, nor is meant to be used as, actionable investment advice; nor a direct comparison between any exchange or market traded security, or individual stock, or index and any category of domain names. We cannot guarantee the accuracy of any such data, as it is maintained by a third party and may be subject to errors, or unavailability. Morningstar, Inc. did not participate in the creation of this report and reserves all intellectual property rights in regard to its own materials or data.

Disclaimer

This report is not intended to be interpreted as investment, legal or tax advice of any type. No entity or person associated with the production of this report currently holds or has the intention to hold themselves out to be a registered investment advisor or attorney. The readers of this report are responsible for performing appropriate due diligence in considerations with any action they may take as a result of this report. To the maximum extent permitted by law, the Authors, the publisher and their respective affiliates disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations in the report prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

The reports’s commentary, analysis, opinions, advice and recommendations represent the personal and subjective views of the Authors, and are subject to change at any time without notice. This publication is not a solicitation or an offer to buy or sell any securities, domains or any other type of investment or commodity interest. References to specific domain names, extensions or any third parties is for illustrative purposes only and are not intended to be nor should be interpreted as, recommendations to buy or sell domain names.

The Authors or entities participating in the creation of this report may be affiliated with some of the third parties mentioned in this report.