The .au domain name is an often overlooked and extremely undervalued domain name within the vertical market of domain names globally. The .com in my opinion will always be the pacesetter, market leader, king, big daddy or whatever you would like to call the numero uno or number one. Back in 2008, auDA relaxed the domain name ownership policy to allow the .au domain names to be traded just like other top level domains and other Country code domains around the World. The policy has restrictions such as there is a waiting period of 6 months before this can be done on a new registration of a never before registered domain name or a registration of an expired domain name. The policy also requires the owner of the domain name to hold either an ABN or an ARBN.
The “.com boom” as it was labeled was mainly in the U.S. market and held up to the emergence of commerce to be channeled online more easily through not only websites like eBay.com, but to any domain name that would have access to a shopping cart. It didn’t take too long for the big suit corporates in America to spot the trend and the growth of a new phase of business couldn’t sustain the supply and demand fundamentals of business. The “.com bust” soon followed in quick succession to the .com boom and big corporates let domain names expire just like their businesses had expired. The problem with that was the value that they had built in the domain name and in some cases, even the development of a brand, still had value in its own right.
Articles from websites still online were still displaying content and in some cases even donating a link to the domain name. Experts in the domain name industry emerged and began picking up these domain names. I personally didn’t get a chance to make any of the major purchases.
Now, based on the history of the .com, we can draw a parallel to the .com.au. Will the .com.au ever be as valuable as .com? That is a loaded question and it’s loaded because it is dependent upon buyer preference and concept for the domain name. Beauty truly is in the eye of the beholder and we here in Australia would like to think that to brand any business identity online that it should be done with a .au domain name, but that’s not always the case. I feel that in a geographical capacity that the .au will always prevail or should prevail. Sydney.com is the Australian owned domain name and Sydney.com.au is a privately held domain name. Globally, when you say “Sydney”, it is highly recognisable as the capitol of Australia, even though it’s not, and is visually recognised by the Sydney Opera House and the Habour Bridge. I believe that the Australian Government should have taken out the Sydney.com.au domain name many years ago as now it would be too costly in my opinion.
Moving passed the similarities of seeing opinion based values over the .com to the .com.au in relation to “Geo names”, you must look at the trend since the relaxation of the auDA policy in 2008. There are 3 factors that will continue to make the .au domain names, no matter what the extension, either a .com.au or the .net.au, grow exponentially in value. Those factors are technology progression by way of more access and better access to the internet (NBN don’t get me started- that’s another 3,000 word debacle to unwind and sort out), the total number of internet users growing annually and the overseas companies now recognising the Australian market as UNTAPPED and ready to go like no other market on the planet.
Let’s have a look at some of the .au domain names that have sold in 2008 through 2009 and put them into perspective of what I would assess the value that they would be worth in today’s market.
1. DebitCard.com.au- Sold for $3,000.00 on NetFleet. I believe that if DebitCard.com.au would be placed in an auction today that it would bring $14,000.00 to $20,000.00.
2. Sunrise.com.au- Sold for $400.00 on NetFleet. I believe that if Sunrise.com.au would be placed in an auction today that it would bring $4,000.00 to $6,000.00.
3. Mortgage.net.au- Sold for $13,500.00 on NetFleet. I believe that if Mortgage.net.au would be placed in an auction today that it would bring $24,000.00 to $36,000.00.
Now let’s fast track to late 2010. Let’s have a look at what the market is bringing and more importantly, who the participants are making mistakes by allowing the domain names to expire and who the companies are that are acquiring them.
1. Hardware.com.au- Sold for $33,333.00 on Drop.com.au. Woolworth’s picked this domain name up after Bunnings let expire. I believe that in 2 to 3 years time that Hardware.com.au will be worth $120,000.00 to $150,000.00.
2. Electricity.com.au- Sold for $30,933.00 on NetFleet. TRU Energy let this domain name expire and Pacific Octane picked it up. I believe that in 2 to 3 years time that Electricity.com.au will be worth $150,000.00 to $200,000.00. *There is no self promotion intended for Pacific Octane Pty Ltd, I am merely basing my opinion of the value of the domain name in an exponential growth trend that I’ve been monitoring for 8 years and how the trend in .au domain name sales seem to follow this trend quicker in relation to the .com.
3. Auto.com.au- Sold for $5,807.00 on Drop.com.au. A well known domain name investor allowed this domain name to expire and Car Sales LTD picked it up. I believe firstly in today’s market that it is worth $10,000.00 to $12,000.00 and Car Sales did a fantastic job in the acquisition of this domain name. I believe that in 2 to 3 years time that Auto.com.au will be worth $40,000.00 to $50,000.00.
The start of any web based business whether or not it is based independently as a brand on the web or whether it’s a shop that expands through the web is founded by one thing- the domain name. Looking at the trend now that will keep driving up the value of the .au domain names is something that has been happening quietly for the last 12 to 18 months but is now becoming more mainstream and is being looked at seriously by Australian investors. The ability to create, brand and enter the market being a web based business is extremely affordable if you know how to do it properly. Have a look at these online businesses that have done it properly:
Atlassian: The early breakthrough success of the current round of tech funding. These wiki software makers received US$60 million in funding from tier-one US investor Accel Partners in July 2010. http://www.atlassian.com
Big Richard: Underwear and condom maker which received and investment from Sydney Angels in 2010.http://bigrichard.com.au
Drive My Car Rentals: A car sharing service launched in December 2008 that has received two rounds of funding through Sydney Angels, the most recent being an injection of $600,000 in mid-2010. http://www.drivemycarrentals.com.au
Conversant Media: Media company that has also been the recipient of an investment from Network Ten in its online sports community website The Roar. http://www.conversant-media.com
GraysOnline: Online auction house which in January received a reported $35 million from fund manager Caledonia Investments in exchange for 25% of its business. http://www.graysonline.com
GetPrice: Five-year-old comparison shopping site wholly acquired by News Digital Media in September 2010. http://www.getprice.com.au
HelpMeChoose: Online home loan comparison service that was bought by Mortgage Choice in October 2010. http://www.helpmechoose.com.au
Jump On It: This deal-of-the-day site received $5 million in November 2010 from the Amazon-backed social buying site Living Social. http://www.jumponit.com
Oasis Active: Ten Network lifted its stake in this free social dating website to 40% in January. http://www.oasisactive.com
Our Deal: Group buying site has been backed by both News Limited and Network Ten. http://ourdeal.com.au
OzForex: Accel Partners’ second investment into an Australian web company, this 12-year-old online exchange payments service received upwards of $70 million in November 2010 in an investment round that also included the US asset manager Carlyle Group. http://www.ozforex.com.au
Ozsale: This members-only online shopping club that launched in 2007 was the recipient of $14.5 million from New York-based investors Insight Venture Partners in August 2010. http://www.ozsale.com.au
RetailMeNot: Hitherto unknown Melbourne-based online coupon site that burst to prominence when it was acquired by US company WhaleShark Media for close to US$90 million in December 2010. A spin-off of Stateless Systems, which owns a range of popular websites. http://www.retailmenot.com
Roamz: Local marketing site that received an undisclosed amount from marketing services company Salmat in January 2011 to create a new joint venture. Roamz was founded by Jonathon Barouch, the entrepreneur behind the online florist Fast Flowers, which was sold to 1300 Flowers in 2010. It is yet to launch.http://roamz.com.au
Spreets: Deal-of-the-day site sold to Yahoo!7 in January 2011, having grown its monthly revenue from $0 to $4 million in just 12 months. Early backers include Facebook investor Klaus Hommel. Spreets is modelled on the US company Groupon, which raised $950 million earlier this year.http://spreets.com.au
VioCorp: Video streaming specialists who received $5 million in funding in the first investment made by former Fairfax Media CEO David Kirk’s Bailador Fund in December 2010. http://www.viocorp.com
####### *Source SmartCompany.com.au
So when you have a proper business plan in place, you put together the right team of individuals that are experts in their field and you have a common goal, the journey could be as little as 2 years in recognition of being acquired by the right company that appreciates your creative ability in plan and process with bringing something to market and creating a strong brand and customer base. There is a company that I’m watching right now and it’s a very clever concept, idea and the concept and idea is even better because it’s branded by a great domain name. Voucher.com.au is an up and coming competitor in the “deals” market space for businesses to offer consumers heavily discounted offerings on products and services in hopes to secure a margin of repeat customers. This is the Groupon model and is the single most popular trend in my opinion of “getting deals” and being able to take advantage of business owners wanting to compete in the online space for new customers.
In closing, I see the .au market surpassing that of the .fr and the .co.uk per capita in regard to the overall growth of creative awareness of websites such as dntrade.com.au, netfleet.com.au and drop.com.au combined with the ability of overseas investors looking at what this specific time period is now- the 2nd phase of growth and it’s a ground floor opportunity.
JW
Yes I can’t help but agree there is opportunity mainly because the domain space was largely protected from the ‘land rush’ that happened in the .com space. This has broken down somewhat in the past 5 years or so but there was and probably still is an opportunity to get domain names that give your venture a head start.
If you really want to be the next big thing you need a name that catches peoples attention, fires the imagination at best or at worst is easy enough to remember and jumps you over the competition. If you are serious about your venture why wouldn’t you spend $$$ getting hold a name that makes a difference? People spend thousands of dollars on all sorts of advertising expenses but when it comes to domain names can’t understand why the name they want (or ‘their’ name) can’t be registered for $20! Rather than buy the best name in the first place they end up spending thousands of dollars on advertising their third or fourth best choice – go figure.