02|22|2008 02:17 am EDT
I received an email, right after I posted about the TRAFFIC auction results. “Don’t sound the alarm ! The ship is not sinking.” Seriously though. No. It wasn’t that dramatic but it did remind me of the scene from the Titanic movie, where the band keeps playing. The email referred me immediately to Michael Berken’s post on his blog about his take on the auction.
Given that my previous post about the auction simply stated “Making comparisons to past results and using the data we gathered, the results of this auction arenâ€™t very impressive,” I was admittedly surprised at this quick damage control by the sender. So, I took a little time to read Mike’s post and a few others across the web and add my further commentary below (and after the jump). Berkens points out several factors that contributed to the eventual results of the TRAFFIC auction and seems to be unfazed overall. . . .
1. Timing with DomainFest stealing some of the TRAFFIC thunder and sales. – While I can sympathize with this argument, TRAFFIC has never been without a little competition. Sedo/Greatdomains conducts online auctions ending around the same time as the events, which takes away domains and bidders wallets. Domain Roundtable also introduced competition ($3.8 million on their first live event) that should have taken away some thunder as well.
I suppose I can see how you would take the 2 events and combine them, but I think in all fairness since the domains were being submitted months in advance Moniker/TRAFFIC had a good inventory and a perfect opportunity to make some more record breaking sales. The other problems may be more to blame . . . but let’s talk about those too.
2. More high priced domains – sure this is a top heavy auction but that’s the reputation that TRAFFIC/Moniker has built out of this auction. For the results not to produce more sales in this caliber, one has to be a bit unimpressed. The TRAFFIC auction has a reputation for 7 figures sales doesn’t it ?
3. High reserves – This is like a skipping record. It’s always about the prices though. Auction companies need to pick better priced domains. Domains that will sell and that are priced right. This is as basic as it gets and there’s no time for laziness in this department. DomainFest had a similar problem. I did a short exercise before this auction to find domains I thought were priced right. My list was very reflective of the results of the auction. I found around 50 and I’m a tightwad. The auction produced around 80 sales.
I can assure you that many names that sold at past TRAFFIC auctions had high reserve prices and still sold or still received bids. I know because I’ve bought at least one. It’s nothing new to have bloated prices. Sellers are accustomed to getting a little more out of their domains at TRAFFIC but the high reserves aren’t working out in this climate apparently.
All in all, I think Mike makes some good points, but people expect more out of TRAFFIC, regardless of competition, regardless of high priced reserves. I think even Monte expected better. Mid-way through the auction, when antidepressant.com was brought up on the block, Monte proclaimed “someone needs to bid or I’m going to need some of this”. We all could use one possibly.
Elliot Silver speculates on his site that the market is at rest. Can we call this a plateau? Ron Jackson agrees with Mike and stated on his site the “overall domain market which remains strong.” Ron never would say anything negative would he ? He’s way too nice ! Even Andrew Alleman reports his view of that “If tonightâ€™s domain name auction was a barometer for the domain industry, we know nothing more than we did before the auction began. The results were, well, mediocre.” There isn’t anyone in this space writing about it who wants to sound any alarms. Myself included. Why would we? We’re all heavily invested in the space and want for it to continue. Before the auction, many people I spoke with, among them the top domainers, commented that this was one of the most important auctions yet. If it was so important, what did we learn from the results ?