Some domainers, including Elliot, Dominic and admins of DomainState have recently expressed their opinions about LLLL.com domains describing them as a “bubble that will one day explode”. What are the reasons they list?
- LLLL.com domains have no end user value
- LLLL.com domains were bought out by domainers and are only sold between domainers
- There are 26 times more 4 letter domains that 3 letter
- LLLL.com are risky and prices will fall
- Other reasons, that are too lame to list here
Now here is why I think they are wrong:
- Check this little sales compilation from Feb 2008, extracted from Tdvr:
asot.com $1,450.00 02-2008 Pool
olet.com $1,750.00 02-2008 Sedo
tgbg.com $1,350.00 02-2008 SnapNames
zety.com $1,200.00 02-2008 SnapNames
PLAW.com $2,050.00 02-2008 SnapNames
maub.com $2,050.00 02-2008 Sedo
Saws.com $50,000.00 02-2008 SnapNames
tied.com $15,050.00 02-2008 SnapNames
pcid.com $2,500.00 02-2008 SnapNames
mcno.com $3,964.00 02-2008 Afternic
krto.com $3,027.00 02-2008 Afternic
ruif.com $2,692.00 02-2008 Afternic
WBBE.com $4,587.00 02-2008 Afternic
XXAA.com $4,088.00 02-2008 Afternic
seri.com $5,110.00 02-2008 NameJet
yanq.com $1,100.00 02-2008 Sedo
axed.com $4,601.00 02-2008 Sedo
ONNN.com $2,000.00 02-2008 Sedo
QCAC.com $7,041.00 02-2008 Afternic
QUEB.com $4,088.00 02-2008 Afternic
IASN.com $4,085.00 02-2008 Afternic
DAAS.com $5,149.00 02-2008 Moniker
Reje.com $2,100.00 02-2008 Pool
tpao.com $3,388.00 02-2008 Afternic
xold.com $3,288.00 02-2008 Afternic
remt.com $3,288.00 02-2008 Afternic
icia.com $1,637.00 02-2008 Sedo
hfan.com $4,000.00 02-2008 Sedo
ceum.com $1,250.00 02-2008 SnapNames
KEXU.com $1,100.00 02-2008 Afternic
JULK.com $1,099.00 02-2008 Afternic
ROLK.com $1,500.00 02-2008 Afternic
LAFO.com $2,000.00 02-2008 Afternic
dunt.com $2,320.00 02-2008 Sedo
EATC.com $1,670.00 02-2008 SnapNames
geps.com $2,600.00 02-2008 NameJet
ezob.com $1,015.00 02-2008 TDNAM
jagr.com $3,215.00 02-2008 TDNAM
UNET.com $100,000.00 02-2008 Sedo
buvo.com $1,800.00 01-2008 Afternic
It’s hard to say how many of the above were end users, but probably about half since they sold for well above the market value. Of course some of these are words, so they don’t really count.
How many end user sales for LLL.com were there so far this month? Just one: UAA.com sold for $73,445 on sedo. The rest are simply between domainers.
Please note these are only reported sales, as we know the wide majority of sales don’t get reported. But the fact is most mid sized end users can’t even afford to buy their LLL.com for market prices, while LLLL.com are still affordable for end users and can make a decent profit to the seller.
- Yes, did you expect it to be the other way around: End users bought out the LLLL.com’s and sold them to domainers? Same happened with generics, traffic domains and LLL.com’s. The same “experienced domainers” in fact predicted the fall of 3 letter .com domains back in the days, but people are short sighted as you can see.
- And that’s why they are considerably cheaper than LLL.com and there are now many more domainers, end users and internet users to support this natural growth in the domaining space. We’ve seen a stable growth in .com registrations and shorter is obviously better (in domaining only.. and for branding).
- Life is risky too – you can die, unless you’re Kevin Ham – he owns heaven.com, god.com, satan.com and others similar and if that doesn’t give you straight ticket to heaven, I don’t know what does..
Now compare the risks with investing in 4 letter domains to risks in other popular domaining areas:
- TM typo domains: these are probably the riskiest type as you can end up paying 2 years revenue for one just to have it taken from you by the TM owner and get slapped with the maximum $100K cybersquatting lawsuit to a big corporation.
- Generics: first of all this is entirely another category, you’d be lucky to find a real generic even for $10K, which can now buy you a nice LLLL portfolio. Prices for these are inflated and you can in fact wait for years to find an end user to flip it for a profit. Or park it for 10 years to get the amount you paid for it back. In 10 years the Internet will change so much that I’m not even going to try to predict anything here.
PPC rates decline, number of advertisers in the niche can diminish and the traffic may go down for a whole variety of reasons. And if you want to sell the domain quickly for at least the high price you paid there aren’t that many domainers who can actually afford it.
- Generics in other extensions: .info and .net prices seem to have stopped growing lately. Nothing really can match .com and with any other extension you simply risk not getting any profit at all from your deal.
- new extensions, .mobi: ok.. you get the idea. Domaining is a risky business but this is as good as you can get. You can’t expect low risk when such huge profit margins are involved.
- These are mostly excuses by people who missed the boat and didn’t register any LLLL.com before the buyout.
Domaining space is growing and generics prices have inflated and become untouchable for most. Of course many people said the same things about LLL.com back at the time and now they are bashing LLLL.com again. History repeats itself and many don’t learn. For the predicted “crash” of LLLL.com “bubbled” prices to even have the chance to happen something big and bad should occur to the space. Like for example if one of the biggest holders decides to release them all to the market with prices well below the reseller rates. But that’s not very likely. Lets see who some of the bigger holders are:
- nucom.com Nucom appears to be the major holder of the LLLL.com stock. From my calculations their site has 8876 domains listed, out of which 288 are leased and 2769 are sold. They currently have 5161 LLLL.com domains remaining for sale. Many of these are quad premiums. And average domain is worth about mid-high $xxx in current market prices. For the sake of statistics and to satisfy the curiosity of my readers NUCOM also have 100 5 letter .com domains, 97 6 letter domains 110 7 letter domains, 68 8 letter domains and many domains with hyphens. Some of these are names of UK towns and places.
I have contacted NUCOM few times about possible purchases of a few LLLL.com’s and the prices they quoted always made the purchase unreasonable for a domain investor like me, since they were above the market value. Of course for an end user acquiring the domain for a company, or personal business site it would be a very fair price. They have many quad premium CVCV.com’s and believe me they are not selling these cheap. NUCOM realize the value of their domains very well and having a large portfolio they receive a large amount of inquires on a daily basis.
The minimum prices they quote are $950 per domain for sale and $19/month to lease. Of course these only refer to the ugliest of their LLLL.com’s, for the better ones prices can go up to as high as $25K
- AskMySite.com: These guys have about 7.5K LLLL.com domains, on average their domains are worse than NUCOM’s, so their total portfolio worth in current market prices would be quite below nucom’s. You can see the whole list here, but before you click you should know that following this link WILL crash your browser, or at least make it stuck for a few minutes. So make sure you close all other important browser tabs first. Askmysite don’t sell cheap either and they don’t have any quad premium cvcv.com’s, but their prices are rather reasonable.
- Adam Dicker: According to this DNF thread, Adam, the owner of Dnforum has a portfolio of 4k nice LLLL.com’s. Well done! I don’t think he would sell these cheap either. Adam is more likely to wait and sell just a few per year to end users for really high prices. And indeed he sold 2 for nice sums of money: “I used to think that way too until I sold zwas.com and zzzq.com for each over 5 figures. Who would have guessed they had value. They have different reasons for buying them, one of the above was a guy’s last name, the other I didn’t care. It’s always about what the buyer feels it’s worth not what I think.“
- Rick Kumar from DomainBoss.com owns 1500 LLLL.com’s for about 2 years now and not planning to sell cheap. He receives many inquires and generally asks for high $x,xxx. Rick reports that he sold one LLLL (not very premium) a year ago to an end user for $5.5k.
- BuyDomains.com own about 1000 LLLL.com’s. They are a big company and sell mostly to end users. They obviously have no intention of releasing their LLLL’s or selling them cheap.
- me. Well, I do have an LLLL.com portfolio which can be valued in high 5 figures to low 6 figures (part of it is for sale on 4 letter domains and some with bargain prices here), but I’m nowhere near the above guys. I don’t mean specifically me in this case, but rather any other similar mid sized LLLL holder who has at least a couple hundreds of them of decent quality. Even if an investor like that decides to sell all his LLLL.com for $25 each to win “the dumbest domainer of the year” award it’s not going to affect the market much. Everyone will just agree that it was a very dumb move, that deserves the award, and the trading will continue same way after a few lucky people get their bargains.
- You. Feel free to post in the comments below how many LLLL.com’s you have and if you are planning to sell them cheap – If you do just send me an email right away 😉
There are probably other big LLLL holders who have at least a couple thousand LLLL’s for a over a million bucks worth, but no one throws money away. The big holders would rather sell a few for really high prices and keep their portfolio as its value increases. With more domainers coming to the scene and .com registration numbers increasing rapidly LLLL.com value will continue growing. Not in such crazy rates as it has during the last 4 months, but closer to the LLL.com growth rates and slightly above these. Check out the recent sales to keep up to date with current market rates and monitor their growth.
LLLL.com will soon be the new LLL.com as the 3 letter minimum prices cross $10k by the end of this year.