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TechCrunch: ‘China Is Making Domain Name History’

If you're an active domain investor, then you're already well aware of China's increasing influence in the domain market over the last few years. But the stats have become so eye-popping at times that even mainstream media outlets are now reporting on it.

That was the case in December when TechCrunch published the article, "China Is Making Domain Name History."

And while the story is nothing new to experienced domainers, it presents some telling facts about the sheer magnitude of investments coming out of China.

"There is a market unfolding that very few know about, and tens of millions of dollars are trading hands monthly," writes Alan Dunn for TechCrunch. "Over the last two years, China has become the largest buyer of domain names, resulting in what is likely the biggest story in domain-name investing since the Internet began."

The market has changed pretty dramatically in recent years.

Not long ago, a basic strategy for investors was buying and holding their domains, essentially waiting for buyers to come to them. Today, domains are being traded at a much faster rate, often between investors, rather than businesses who are interesting in placing websites at those domains. It's becoming a "market with mass liquidity — the missing piece of the puzzle for the last decade," Dunn writes.

Here are just a few examples the article uses to illustrate these historic trends:

• Short, 3-letter .COM domains, consisting of so called "lower-quality" letters, previously sold for about $10,000 to $15,000. Today, those domains can fetch up to $50,000.

• At DNJournal.com, 9 of the Top 10 year-to-date domain sales are 3-characters or less, with sales ranging from $500,000 to $8.8 million.

• Last November, well-known domain expert George Kirikos tweeted: "136 of [all available] 676 2-letter .com domain names are now owned by Chinese registrants, breaking the 20% barrier."

• "Even the preferred way to communicate with buyers has changed. Most transactions are agreed upon in China through QQ — the largest instant messaging system in China, but rarely known in North America." One expert is quoted as saying, "Most offers are sent through QQ. Maybe 1 in 10 people use email, even fewer use the phone."

• Hand-registering these valuable domains is now virtually impossible. They're already taken. As the article points out: all 5-number .COM domains, 5-number .NETs, 6-number .COMs, and 7-number .COMs beginning with 3 eights, ending with 3 eights or having almost any repeatable pattern, are now registered. Also, all 4-letter .ORGs with premium Chinese letters are registered.

Is it a fad? Or will these trends continue?

Dunn concludes, "Short domain names are commodities now. Fads come and go, and this certainly does not seem like a fad in my opinion. Will there be ups and downs? Sure. But we are likely witnessing history in the making — a new history for an established marketplace that never saw this coming."

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