2020 has been a challenging year for the world. COVID-19 has upended both the health of nations and the economy.
The impact on business has varied. Companies that depend on people showing up — think restaurants, gymnasiums, and hotels — have been hit hard.
Conversely, businesses that benefit from online activity have seen a boon. Shares in Zoom, the now ubiquitous video conferencing platform, have soared more than 600% this year.
Let’s look at how the changing business environment has impacted domain sales and investments in 2020.
Flocking to the web
Businesses have quickly tried to adapt to the new world. They’ve found ways to deliver their products and services through the web as best as they can.
Restaurants have added online ordering for takeout and yoga instructors have started delivering lessons via computer.
This has led to a surge in domain name registrations. Domains are required for a web presence, so they are a good indicator of how many businesses are creating web presences.
This became apparent in the second quarter of this year (April – June) when people worldwide registered 11.1 million new .COM and .NET domain names. That was 800,000 more than they registered during the same period of 2019.
And in the third quarter (July – September), people registered a million more .COM and .NET domains than in the third quarter of 2019.
Services that help people create websites online have seen a similar surge in new customers.
What about the domain aftermarket?
In normal times, you’d assume that an increase in people starting online businesses would translate to a rise in domain aftermarket sales (sales of domains that are already registered).
These aren’t normal times, however. People are watching their bank balances closely. Businesses are struggling to make ends meet.
Anecdotally, some domain investors are experiencing their best year ever. But larger datasets paint a different picture. It may be that we are experiencing two markets: a strong one for low-priced domains, and a weak one for expensive domain sales.
This makes sense. People will be cautious before shelling out lots of money for domains.
With just a couple of months to go, DNJournal hasn’t charted any seven-figure domain name sales in 2020. Only two domains have sold for more than $500,000.
Compare this to 2019, which had six domain sales over a million dollars, and 13 that sold for more than $500,000.
So far in 2020, domain name sales database NameBio reports $93.3 million in domain name sales. The remainder of the year will have to be exceptionally strong to hit last year’s $150 million total. However, last year included an outlier sale of Voice.com for $30 million, suggesting that this year’s total might be just slightly below last year’s.
Both DNJournal and NameBio are only able to track public domain sales data. Many domain sales are private, and Escrow.com handles many of these.
Escrow.com reported that total transactions for domain names dropped from $85.8 million in the first quarter of this year to $55.2 million in the second quarter.
(As another sign of how COVID has impacted businesses, Escrow.com had a bit uptick in transactions involving personal protective equipment and use automobiles during the first half of the year.)
A mixed bag
The data show that COVID has had an impact on the domain name aftermarket. This impact seems to be somewhat segmented, with strong sales at the lower end of the market as businesses move online but sluggish activity at the high end of the market.
Of course, the pandemic will not last forever. While some domain investors are struggling, the future remains bright.