LLLL.com Buyout Near Failure?
The past 17 months haven’t been kind to LLLL.com investors… We saw the minimum wholesale on LLLL.coms fall from $55 to roughly 50 cents and while other LLLL.com segments haven’t seen such steep declines, most have performed miserably since February 2008, with quad premium rares (AAAB/BAAA, triple letters, AABB, ABBA, ABAB), highly pronounceable and CVCV LLLL.coms being the only ones to have performed “okay” in light of the declines we’ve seen across all domain segments, these LLLL.com segments having performed similarly to LLL.coms (down about 50-60% for the most part; a few exceptions occuring with the highest quality pronounceable LLLL.coms [mostly CVCVs] which appear to be down about 15-25%).
I’ve written a few posts recently about how the number of dropping LLLL.coms not being backordered or registered using drop catching software has been on the rise, and today to the shock of many LLLL.com investors, 25 LLLL.coms were available for hand registration this morning. Matt has been one of the most reliable sources for free lists of available LLLL.coms — both before and after the LLLL.com buyout occured, so if you’re looking for a few LLLL.coms to handreg, you might want to bookmark that url.
As a few domainers have been saying for awhile now, it remains to be seen what will result from the buyout failing. It wouldn’t surprise me to see many LLLL.com investors lose faith in the market… If February 2008 taught us anything, it’s that nothing kills prices like reduced expectations. I think we’ll see the highest quality prounounceable LLLL.coms be fairly immune to any negative repercussions from the LLLL.com buyout failing — these LLLL.coms have found a reasonable number of end users and enjoy similar status to LLL.coms as domainer tokens. They might very well decline, however I do think LLLL.coms of slightly higher quality than buyout LLLL.coms (eg. the lowest LLLL.com market segments for which their buyout holds) will be the most affected — quad premium LLLL.coms and weaker pronounceable LLLL.coms (most CVVC, VCCV and weaker VCVC). This could very well have an impact on the prices of pronounceable LLLL.nets which might now find themselves competing against pronounceable LLLL.coms.
All speculation at this point, however the LLLL.com buyout is appearing more likely to fail with every passing day. I would recommend anyone investing in this market at this point exercise caution. “Don’t invest more than you can afford to lose” is an understatement at this point. If you have reason to believe things will turn around X years down the road, go ahead and put a few bucks in LLLL.coms, however be aware of the holding costs — especially if investing in cheaper LLLL.coms. Like any domain name market segment, there exists the possibility to purchase an LLLL.com for under market value and resell it for more, however this is no longer the safe bet it once was.
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July 15th, 2009 at 8:02 am
Looks like all of those have been registered now.
July 15th, 2009 at 10:34 am
Reece, everything is down, not just LLLL.com - though I’m renewing most of mine since I believe that the names I hold are worth more, even now, than what I paid for them.
But it is a major mistake to think any segment of LLLLs immune from the price crash. I said this earlier, I’ll say it again too - when prices fall, they fall across the board, we’ve already seen this happen tbh.
The smart money is upgrading their portfolios, slowly but steadily imho.
July 15th, 2009 at 11:48 am
You’re right about the CVCV’s - i’m still seeing a lot of interest and in the “oo” names - e.g Joof.com.
Obviously the offers are lower - but not much.
July 15th, 2009 at 12:51 pm
I’ve always been a fan of CVVCs with “oo” — some of them are incredibly pronounceable. Don’t currently own any myself for the record.
July 15th, 2009 at 2:57 pm
Meaningless LLLL.com’s have always been next to worthless, apart from this bubble self-inflated by a group of twits.
You would have all been better off regging QUALITY IDN’s that were sitting there begging to be registered.
Traffic on Russian IDN.com’s is EXPLODING. We tried to tell you, but you all laughed in our faces.
Well now it’s our turn.
Ha ha ha ha ha ha ha ha.
July 15th, 2009 at 9:45 pm
“Reece, everything is down, not just LLLL.com”
Very few segments of the market are down like LLLL.com, about the only thing comparable is .mobi. It is the bursting off a speculation bubble.
July 16th, 2009 at 12:12 am
@ Drewbert: IDN is as much speculation as LLLL.com in my opinion. Who’s to say anyone will want to use IDN.com when they can have IDN.IDN?
July 16th, 2009 at 12:23 am
Recce, how much traffic are your LLLL.com’s getting?
July 16th, 2009 at 12:26 am
Hi Drewbert,
I don’t have any LLLL.coms anymore — sold about 90%of mine last year when they peaked in late January - early February 2008. I’m sure your IDNs are getting more traffic than LLLL.coms get.
July 16th, 2009 at 1:27 am
Right. They are. A lot more. Which makes them less speculative.
Congrats for getting out of the market at it’s peak.
July 16th, 2009 at 1:49 am
Thanks Drewbert and all the best with your IDNs
July 16th, 2009 at 2:17 am
@Reece.. so you bought http://www.LLLL.com, went to the trouble of setting up a blog called LLLL.com, but you bailed long ago on LLLL’s? right. well that’s just plain weird to me.
July 16th, 2009 at 2:34 am
“Traffic on Russian IDN.com’s is EXPLODING.”
How many roubles in that traffic worth?
July 16th, 2009 at 2:54 am
Hi JR,
I’ve been writing price guides for LLLL.coms since November 2007, so the domain name had a purpose in my mind even if I wasn’t investing in the market. Though I have not invested much in the market for over 1 year now, I still enjoy reading and following the market.
Many domainers purchase LLL.coms as a trophy domain — this is my trophy domain
July 16th, 2009 at 3:37 am
Thanks Reece.
You might want to consider re-investing some of the LLLL.com sales revenue in some IDN’s
http://www.idndemystified.com/ is a good place to visit for starters. He does very well explaining the why’s.
Snoop, a few roubles is better than no roubles at all. Russian PPC is not declining like western PPC is.
July 16th, 2009 at 3:41 am
Thanks Drewbert — another IDN investor pointed me to that very URL a few days ago. It sure is an excellent resource for IDN investors and even other domainers who want to get a better idea of what’s going on elsewhere in the world.
July 16th, 2009 at 6:26 am
It surely is a bad time for LLLL.coms, although I think it will rebound IMHO.
The old “LLLL.coms are pointless if they contain bad letters” argument is one that I don’t agree with, especially since the counter-argument “LLL.coms with bad letters are worth $x,xxx; what’s the difference?” has never been properly defeated. I think this shows that LLLL.coms *are* a useful investment (in the long run), but this drop is because:
i) LLLL.coms got bought out right before the recession
ii) The recession hit, and prices fell everywhere.
iii) Some people then thought, since LLLL.coms are a relatively new buyout, that perhaps they aren’t a good investment.
iv) Confidence, and so prices, plummet on LLLL.coms.
In, say, 5 years time, the amount of internet users will be much higher than they are today, and many more domains will be registered. LLLL.nets will be bought-out by then, probably as will the four-letter versions of some of the other more popular TLDs.
I’ve still got about 50 LLLL.coms - 5/6 are $xxx, 1 is $x,xxx, and the rest are $xx. However I do think that the prices will rebound again soon enough.
To re-iterate what I’ve said above - I believe the drop to be based on lack of confidence since LLLL.coms are a new market. I don’t think it’s due to a fundamental flaw in LLLL.coms.
July 16th, 2009 at 7:33 am
“The old “LLLL.coms are pointless if they contain bad letters” argument is one that I don’t agree with, especially since the counter-argument “LLL.coms with bad letters are worth $x,xxx; what’s the difference?” has never been properly defeated. I think this shows that LLLL.coms *are* a useful investment (in the long run), but this drop is because:”
The difference is that the demand for 4 letter terms if signifcantly weaker, and the supply significant larger. The market can only support a certain amount of names with true collectors status. Just like new minted coins generally aren’t collectors pieces (lack of demand, too much supply), neither are low quality LLLL.com’s.
To say the argument has never properly been “properly defeated” is a bit like a LLLL.com naysayer arguing that nobody has ever proved why these names should be worth anything, you’ve already made up your mind what the “correct” argument is and no matter what is said that probably wouldn’t change.
In once sense though the argument has been defeated by the market itself, the buyout is on the verge of collapse. As they say “look at the scoreboard”. In other words if you want to know which argument has been defeated just look at current sales values - just yesterday a portfolio of 70 LLLL.com couldn’t get a one cent bid on ebay. Registering bad quality LLLL.com’s is “pointless” because they are worth nothing.
July 16th, 2009 at 7:47 am
>> The difference is that the demand for 4 letter terms if signifcantly weaker, and the supply significant larger. The market can only support a certain amount of names with true collectors status. Just like new minted coins generally aren’t collectors pieces (lack of demand, too much supply), neither are low quality LLLL.com’s.
At the moment, yes. However with LLL.coms worth $x,xxx and LLL.nets worth $xxx, since internet usage is growing and the fact that “.com is king”, there *will be* demand for LLLL.coms in the future. I’m not saying that LLLL.coms should be valued at $xxx nowadays, I’m just arguing that in the future they may be a good investment.
Expecting LLLL.coms to instantly shoot up to high $xx minimum wholesale and to stay there was naive and a fault of those (including myself) who bought into LLLL.coms as “the next big immediate thing”. However I also think it’s naive to say that a failure today means that they are worthless.
Many companies have lost massive amounts of value recently. That doesn’t mean that they don’t provide a good/useful service, of course.
>> To say the argument has never properly been “properly defeated” is a bit like a LLLL.com naysayer arguing that nobody has ever proved why these names should be worth anything, you’ve already made up your mind what the “correct” argument is and no matter what is said that probably wouldn’t change.
Not at all
I fully apologise if it came off that way, although I’ve never honestly had anyone reply back to the argument with anything decent. So thanks a lot 
I can understand what you are saying, and whilst I don’t agree enough to change my mind completely, I would (and do) happily change my mind if a good enough argument/good enough evidence is put across. As I say, I don’t fully agree with you, although I’m not one to never change my mind. We’re business people, flexibility is a must
>> In once sense though the argument has been defeated by the market itself, the buyout is on the verge of collapse. As they say “look at the scoreboard”.
I agree. However many banks are on the verge of collapse too. That doesn’t mean that there’s no point in a financial system.
I’m happy to bet that LLLL.coms will be much more valuable in 5-10 year’s time than they are today.
When LLL.coms got bought out, people were saying that even the good ones were worthless. In the early 90s (when I was just a kid, infairness), there were some generic .coms still not registered since people thought they’d never have a value.
As the internet grows more popular, I fully believe that shorter domains will grow in value once more. In 5 years I do believe that LLLL.nets will have a minimum wholesale price of low $xx.
July 16th, 2009 at 7:49 am
Snoopy,
To re-iterate what I said, I am flexible and do change my mind. I’m not blindly saying that LLLL.coms will succeed and ignoring anyone that offers evidence to the contrary 
Forgot to put at the start of my comment - thanks for the good reply and discussion points
July 16th, 2009 at 8:13 am
“However I also think it’s naive to say that a failure today means that they are worthless.”
-The low quality ones are worthless, that is a fact.
“I agree. However many banks are on the verge of collapse too. That doesn’t mean that there’s no point in a financial system.”
-The analogy is completely obvious but I don’t see how it relates at all to what low quality LLLL.com’s. Let’s forget the pointless analogies and have some real debate.
“When LLL.coms got bought out, people were saying that even the good ones were worthless.”
-Is this something factual or did you just make that up. When LLL.com got bought out who were the people claiming the good quality one were worthless?
July 16th, 2009 at 8:19 am
At least from what I’ve read, the whole debate around whether LLL.coms would ever be worth something was about whether bad LLL.coms would ever be worth something. I don’t think there was ever a debate about whether the good LLL.coms would have value — it was long before I ever got into domaining if it did indeed occur.
Bad LLL.coms have a lot in common with bad LLLL.coms — the only thing they have going for them is collectibility and as Snoopy has mentioned, there are far more bad LLLL.coms than bad LLL.coms — too many bad LLLL.coms in fact for them to be collectible like LLL.coms at least at this point in time. If the domainer population were to balloon 26 times the size of what it is today, who knows, however I do think someone would be safer investing in bad LLL.coms than in bad LLLL.coms if only given the choice between the two.