Looking at September’s $4.7 million sale of IG.com & Yahoo’s current auction of AV.com

This September, IG.com sold to iG Group for $4.7 million. Bergdorf Goodman bought BG.com last year for an undisclosed price.  Yahoo is auctioning AV.com right now with a $1-1.5 million reserve. These rare two character .COM domains can be among the most critical pieces of intellectual property a large corporation can own, especially because only one company can own each acronym.  I’m betting that American Express regrets not buying AE.com – instead American Eagle owns it.  As we’ve said all along, shorter is indeed better, with last month’s $4.7 million acquisition of IG.com providing just one more example of support for the future value of 2 letter .COM domains.

You’ll find most of your airlines, banks, and highest grossing global corporations on one of the 676 exclusive two letter .COM domains in existence. Consider British Airlines (BA.com), Goldman Sachs (GS.com) and Dow Jones (DJ.com). In addition, you’ll discover most top tier entertainment giants like Warner Brothers (WB.com) and Sports Illustrated (SI.com) on their premium two character domains.

Volkswagen might have its German site on Volkswagen.com, but if you search “Volkswagen,” it’s their exclusive VW.com site that returns in search results. Take pause here: it’s not because we have trouble spelling! It’s because a rare domain like this is an indication of stability, security, confidence, exclusivity… and a hard asset that will always grow in value for the domain owner. In addition, 2 letter domains are super easy on the eyes- and on our typing fingers- in a mobile environment.

As mobile growth skyrockets across the internet and particularly within significant populations like India and China where users almost exclusively utilize mobile connections, these short domain names will continue to increase in value. With studies showing that tablets exceeded desktop conversion rates in Q1 of 2013 and mobile & tablet use nearly doubling during 2013, the length of the domain name becomes even more vital.

After all, there’s nothing easier to type on a smartphone or tablet than a two character .COM. Now that’s money in the bank. Domains name valuations, like real estate, significantly depend upon comparable sales. Consider, of course, that most of the biggest two character .COM sales were never made public, such as our sales of DX.com to Deal Extreme and RH.com to Restoration Hardware.

Corporations like these prefer to keep those figures private, and domain brokers like Media Options with strong reputations for discretion are most often involved in those sales & acquisitions. However, there are many public sales as well. In 2007, Liverpool Victoria purchased LV.com for $1.2 million. Yellow Pages acquired YP.com for $3.85 million a year later.

Understandably, Facebook paid a steeper a price, at $8.5 million for FB.com in 2010. More recently and not entirely public, Salesforce acquired DO.com from Microsoft for an estimated $2-$6 million in 2011. Media Options is currently brokering an astonishing 4 of these rare two character .COMs: IE.com, PX.com, CH.com, and EO.com. In fact, Media Options has bought, sold & brokered more than 20 two letter .COM domains. 

Although very difficult to access, a “wholesale” market does exist with exceptionally rare opportunities for two letter .com domains. Even there, however, values have popped up almost 200%, from $100,000 – $150,000 in 2011 to $150,000 – $250,000 in 2013. Yahoo’s current $1-1.5 million reserve for AV.com underscores the 2 character .COM’s strong value.

The value of these domains will continue to grow, given that the two letter combination places a hard limit on the availability of two letter .COMs, in conjunction with the exclusive and profitable businesses that already own so many, making the available list much shorter. Any domain owners interested in entrusting these delicate negotiations to a domain broker would do well to identify a broker experienced in building relationships with large corporations and with a strong reputation for discretion.