LLLL.com Drops
I’ve been noticing more frequently lately that LLLL.coms are available for handreg — that is, some LLLL.coms are not receiving bids at expired domain auctions and are not being registered by those running automated scripts which normally would catch any LLLL.coms which slipped through the cracks within seconds…
This is a scary thought for LLLL.com investors.. If LLLL.coms are available for regfee with 12 full months until renewal, it’s hard to see why a comparable LLLL.com about to expire would have any value. There have been a few of us who have been saying for some time now that we were deeply worried about what may happen in the LLLL.com space should exactly this happen. As we saw in the months leading up to and shortly after the LLLL.com buyout, it wasn’t only buyout LLLL.coms that appreciated considerably in price, but almost all LLLL.coms. The higher quality LLLL.coms haven’t exactly performed great over the past year, however their performance has been much better than low end LLLL.coms which have lost approximately 98-100% of their value since February 2008. Can we expect higher quality LLLL.coms to be in trouble should buyout LLLL.coms become readily available for regfee?
There are a few reasons I wouldn’t discount the possibility of that happening. First of all, as mentioned above, higher quality LLLL.coms did rise in price considerably in the months leading up to and shortly after the LLLL.com buyout. Second of all, almost the entire LLLL.com market has been in a slump since February 2008, so there must be some correlation between the performance of bad LLLL.coms and that of higher quality LLLL.coms. One might also consider the psychology behind there being an LLLL.com buyout versus there not being an LLLL.com buyout. Psychology is very much a part of short domains — we saw this very clearly over the past year as domainers largely went from thinking LLL.coms could never fall in price, to some domainers thinking LLL.coms would continue to fall in price, and most domainers losing at least some of the confidence they had in the LLL.com market before they started to decrease in price.
The first reaction by most is always denial. When the first few LLL.com sales were below the minimum reported by 3Character.com, most domainers regarded these sales as an anomaly — suggesting the LLL.com market was declining was treasonous according to many domainers it seemed… But the LLL.com market did fall and continued to fall month after month until it stabilized in March around the $3000 minimum wholesale level and has fluctuated between $3000-$3500 in the months since.
I expect we’ll see the same denial in the LLLL.com market. LLLL.coms are sometimes available for handreg for hours — something that never would have been imagined at the peaks of the LLLL.com buyout, yet LLLL.com investors have largely ignored this fact. I’m not going to try and predict what the end result will be, however I will say that increasing availability of handreg LLLL.coms is worrisome.
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July 4th, 2009 at 5:32 pm
Thanks for the heads up Reece!… those late night snap drops are a killer.. but maybe I’ll try for a few =D
July 4th, 2009 at 5:34 pm
You’re welcome Jason — hope you get a few good ones
July 4th, 2009 at 5:38 pm
The price drop of four letter domains hurts. I personally bought about 200 during the prime ranging from $15-$75 each. To date I’ve dropped about half of them and will continue to drop. I tried unloading some soon to be expired ones several months ago for $5 each and people were passing on them. I don’t even waste my time trying to sell them at this point. If it’s not at least a quality triple premium I’m dropping!!!
PS…congrats Reece for finally adding the notify of follow up comments by email
July 4th, 2009 at 5:48 pm
Patrick,
I’ve had the same experience myself over the past month.. The LLLL.com market has gotten very weak at the low end.
It sure took me awhile to get that comments by email plugin up LOL
July 4th, 2009 at 6:09 pm
When LLL.com market started to fall for the first time people were calling it for what it was, http://www.domainstate.com/showthread.php3?s=&threadid=91770&highlight=lll.com with a few people pretending it wasn’t. I don’t think (m)any of the veteran domainers really banked on LLLL.com’s either. It was a giant bubble and I think many people saw that but a lot of new blood and hype really pushed it - now here is the end many of us expected.
July 4th, 2009 at 9:00 pm
Kevin,
There were plenty of experienced domainers who didn’t see the LLL.com crash coming — there are a few threads on Namepros and DN Forum that serve as proof of that. Thankfully I only had 1 LLL.com when they started to crash — some people unfortunately weren’t so lucky. Have to agree with you though about the new blood and the LLLL.com market.. Some of the new investors in both LLL.coms and LLLL.coms thought it was “impossible” for prices to decrease.
July 5th, 2009 at 3:07 am
Reece,
Perhaps so at DNF/NP. I don’t spend any time there. But if anyone looked at it objectively it was quite obvious that reseller prices were so far disconnected from end-user demand/ppc revenue that it couldn’t sustain itself unless bubble kept inflating. I think you can find talk about LLL tokenization for years if you look. Sometimes the blind just don’t want to see I guess.
July 5th, 2009 at 3:44 am
Hi Kevin,
Yeah — completely agree with you about the disconnect. I’m sure deep down many domainers questioned the sustainability of LLL.com prices. I think the fact that LLL.coms had gone up in price consistently for such a long period of time fed the belief that prices couldn’t fall and it essentially became a self-fulfilling prophecy that each month LLL.com prices would rise. All these years of unchecked gains would no doubt at some point result in exactly what happened and we all saw how rapidly prices declined when that belief that LLL.com prices couldn’t fall was shattered.
July 5th, 2009 at 7:17 am
“Can we expect higher quality LLLL.coms to be in trouble should buyout LLLL.coms become readily available for regfee?”
If the buyout breaks then I think we’ll see the LLLL.com market fall heavily accross the board. I would expect 50%-75% falls for the names with some value left if it happens. However I don’t think the full extent of the falls will happen instantanouesly, I’d say over 6 months or so.
I’m sure we will hear people convincing themselves and trying to convince others than that the collpase of the buyout won’t matter for high quality LLLL.com’s. Supposed “bargain haunting”, hype etc is what result in a slow decline since early 2008 and once again those kind of factors could result is people having a very good opportunity to get out should the buyout fall over.
July 5th, 2009 at 8:18 am
For me dropping my LLLL is one of the most painful situations, especially because same domains received a bulk offer of 7K on 1st quarter 2008, but that time I haven’t sold them. Now struggling to sell them for 1K.
But those have money to hold them for long term will benefit irrespective of current market condition.
July 5th, 2009 at 2:39 pm
I’m personally holding 20-30 LLLL names that I will never sell. Unless of course, there is a $XXXX offer. Even though domainers are starting to liquidate some of their names and use that money for renewals, there are still a lot of domainers that are willing to hold onto quads and triples for 5-10 years, if that’s what it takes.
This bottoming out period, is going to also bring in new domainers that might not have spent $50-$100 on certain LLLL’s, but are now happy to pay $10-$20. Survival of the fittest will also be a key in making profits in the future.
There is still plenty of money to be made on double premiums as well. I won a double premium name this week and already have a company lined up with negotiating a price. There are plenty of names selling for peanuts that attract certain buyers that know exactly who the name should be sold to. It’s just a matter on how deep your pockets are and how much you are willing to gamble.
July 5th, 2009 at 6:19 pm
Reece, how and from where in the world do you gather all the information??
I’d like to follow your foot steps
oh and Should we still keep our thoughts intact for LLLL.com market?
Thanks, Jay
July 5th, 2009 at 6:49 pm
Hi Jay,
I use many RSS aggregators and websites such as Google Blog Search, Google News, and Google Alerts to stay up to date on information that interests me.
July 6th, 2009 at 2:53 am
and your list of interest is..? you can msg me on NP!!