It was recently announced in a press release by CentralNic, a London based domain services company, that they've sold several 2-letter .COM domains for $4.5 million dollars. If you read the press release, which you can do so below this article, it does not specific what company/person bought the domains. The answer to that question is simple though.
Godaddy bought CentralNic's 2-Letter Domains
Godaddy bought CentralNic's 2-letter .com domains. How do I know? Do I have some special connection at Godaddy? Nope. Should I? Yes. Do I have incredible superpowers? Perhaps. I am a genius? Hell yes! 🙂
The answer comes from Godaddy's domain marketplace it owns, Afternic. In addition to it's premium domain division, NameFind, which owns hundreds of thousands of high quality .COM, .NET, and .ORG domain names.
CentralNic's domains are listed at Afternic under the NameFind seller profile. Here are the links to all of the CentralNic domains with minimum offer prices.
Editor's note – If anyone buys one of these domains through one of these links, I do believe I should get a broker's commission for that sale. Right, Afternic? 🙂
Did you notice when all these valuable 2-letter .COM domains were listed on Afternic? April 12th. Why is that significant?
CentralNic is Shutting Down Sub-Domain Business (kinda)
The above domains that were listed on April 12th. Several weeks later at the end of April it was announced that CentralNic would be shutting down selling sub-domains off he above listed 2-letter .COM domain extensions. What does that mean?
I could sell sub-domains off of this site's domain. For instance If someone wanted the domain – Cool.AdamYamada.com – I could sell that to you. You or someone you know could come up with any variations of words, numbers, etc.
CentralNic has been using the above domains to sell pseudo-domains to customers for many years. It was a smart business model for CentralNic before they got to be a “real domain registry” so to speak. CentralNic went from selling pseudo-domains to managing the technical backend for country code top level domains (ccTLDs) such as .LA, the domain for Laos, and .AM and .FM.
When the new domains rolled out, CentralNic was positioned with the technical DNS (domain name system) infrastructure to support many new domain extensions. The most popular for CentralNic has been .XYZ. Of course .XYZ has experienced setbacks such as NameCheap dropping .XYZ support. Also Facebook and Instagram do not allow .XYZ domains on the social media platforms pages.
The company has been banking on the fact that many delegated ccTLDs sell sub-domains. For instance in the .UK namespace the most popular choice has been .CO.UK for many years. CentralNic banked on the confusion with country domains that do the same thing.
It is confusing for those that don't deal with domains, web hosting, and webmastering. This is exactly what CentralNic understood while registrar customers using these do not. The confusion with what ccTLDs officially delegate and make available sub-domains vs CentralNic.
Canadian registrar and web hosting company Sibername posted the full email that went out to registrars. All the domains that being shutdown.
It is interested to note that GB.com, SE.com, and NO.com are not currently listed on Afternic as far as I can see. I can't remember if Godaddy/NameFind had all of these on Afternic but I believe they did back in April.
Unsure why GB.com, SE.com, and NO.com are not on Afternic while the other five 2-letter domains are. Perhaps NameFind/Godaddy have already sold them to buyers before acquiring them? Who wouldn't love to do that?
As an FYI to Godaddy/Namefind if you are reading this, you are technically breaking Afternic rules. You are not supposed to list domains you don't own. 🙂
Godaddy's 2-Letter Sales
Let's assume that CentralNic sold all 8 of the 2-letter domains to Godaddy/NameFind.
$4.5 million / 8 = $562,500 US dollars
There are only 676 2-letter .COM domains. They are becoming much harder to acquire these days. Roughly 50% of 2-letter .COM domains are in use by companies while the other 50% are in the hands of seasoned domain investors.
So is $562,500 dollars for eight 2-letter .COM domains a good deal? Probably was as Godaddy/NameFind isn't going to find that many people with so many 2-letter domains. CentralNic would find too many buyers intereted in a bulk sale.
SE.com currently is at Godaddy but has CentralNic nameservers and DNS. I assume that has been transferred to Godaddy.
Jamie Zoch from DotWeekly reports Godadady sold nine 2-letter .COM domains in 2016 out of it's NameFind division. This include;
Acquiring whatever 2-letter .COM domain inventory Godaddy can makes a lot of sense.
How long before CentralNic destroys other sub-domains?
CentralNic still sells sub-domains to customers on these domain extensions at the moment.
How long before they sell of these domains off to raise cash?
You might assume CentralNic's business is profitable, providing technical infrastructure for new domain extensions. It's not. CentralNic has a negative price-to-earnings (P/E) ratio of -5,875 according to Yahoo Finance. Seems being a registry backend isn't as profitable as people might expect.
It's only a matter of time before CentralNic sells off all these domains to Godaddy or another company. Meaning whatever domain you have that is using one of these will be no longer go dark, forever.
If you are using one of the above listed sub-domains I highly recommend you switch to using a .COM/.NET/.ORG domain name for your business. You have the security of knowing these aren't going anywhere as long as you pay the fee each year.
In the past CentralNic hast lost control of domains. The most notably incident was with GB.com, which they sold to Godaddy. A prior executive at CentralNic had control over GB.com which the company wasn't aware of. Thousands of GB.com sites went dark since the executive changed nameservers to his new company/venture.
Godaddy is on a path to of domain registrar, premium domain sales, and web hosting world domination. 🙂
If you are using a CentralNic sub-domain that was sold to Godaddy, call and ask them to give you a free domain coupon. Godaddy/NameFind can afford to do so. Make sure to get a .com/.net/.org or at least a real ccTLD this time though.
What do you think of Godaddy buying these 2-letter domains from CentralNic? The real question I'm wondering, did CentralNic approach Godaddy to sell them these? Or did Godaddy approach CentralNic?
CentralNic sells Domains for US $4.5 Million [Press Release]
CentralNic plc, (AIM:CNIC), the internet platform business which derives revenues from the global sale of domain names, is pleased to announce that it has entered into its largest ever premium domain name sale agreement under which it will receive consideration of US$ 4.5 million.
Premium Domain Name Sale
Under the premium domain sale agreement entered into on 13 December 2016, CentralNic will receive US$ 4.5 million consideration in cash, the proceeds of which will be utilised to further accelerate growth within the Group. After accounting for associated costs and using an illustrative US$/STG exchange rate, the contribution to 2016 Adjusted EBITDA is expected to be approximately £2.8 million.
Pre Close Trading Update
The CentralNic Board confirmed that, as a result of this sale, the Company expects to finish the year with earnings in line with market expectations and substantially ahead of the same period last year.
During 2016 CentralNic’s wholesale division retained its position as the global leader by volume, accounting for almost one in three of all new Top-Level Domain name registrations. There are excellent prospects for future growth moving into 2017, resulting from a much larger base of domain names due to renew combined with the accreditation of the .xyz TLD by China’s Ministry for Industry and Information Technology.
CentralNic’s retail division became the Group’s highest revenue generator in 2016, augmented by the acquisition of the Instra Group in January 2016. Retail division earnings are expected to be in line with expectations in 2016, while the Group continues to focus on developing services to stimulate future growth.
CentralNic’s enterprise division has achieved record results in premium domain name trading. Progress was also made in developing software licensing and managed service revenues, although new corporate customer acquisition is taking longer than anticipated.
CentralNic CEO Ben Crawford said: “2016 has been a transformational year for CentralNic, adding significant scale to the Group with revenues expected to grow by over 110% and Adjusted EBITDA by over 65%.”
“The Group is now well positioned to continue to grow its recurring earnings businesses, notably wholesale and retail, while seeking to become an established supplier to the enterprise domain name market. We look forward to continue executing our growth strategy in 2017.”