Domains around the World: .CO.UK

A strong secondary market with a ccTLD that has not quite caught up; this means bargains and good investments for domainers!


The

United Kingdom is a vibrant economy with a well educated and

Internet savvy population, which makes it one of the strongest

Internet markets worldwide. Despite widespread Internet use

and domain registrations, some of the best bargains in the aftermarket

are still to be found in the UK, especially among .co.uk domains.

In this article, we will take a look at the reasons for this

and also at the UK domain name market in general.


Overall Structure

The .uk ccTLD (including .me.uk, org.uk, .gov.uk) is operated

by Nominet, a private, non-profit company, limited by guarantee.

Registrations are handled more centrally than for other TLDs,

with owners being registered both with a registrar (TAG holder)

and Nominet.

Primary Market

The primary market (i.e. registrations) is finally out of its

slump and industry growth has reached levels last seen during

the 90s .com boom. This recovery and strong upturn in growth

is not just limited to the TLD "king" .com--.co.uk

is also showing significant growth in new registration. Nominet

has indicated that it expects 2004 to be its most successful

year since starting operations. Total .co.uk registrations have

now reached around 4.5 million.

UK Market Share

The domain name market in the UK is well developed and is one

of the top three markets worldwide along with Germany and the

US. Statistics from Zooknic show that British registrants have

the second highest number of domains registered (after US registrants)

across all TLDs. The overall strength and growth of the UK primary

market and especially the high UK market share (relative to

other countries), also makes the UK one of the most important

secondary markets.

Secondary Market

Sedo's recent experience shows that the aftermarket has picked

up dramatically and is now in a strong growth period. Unlike

its competitors, Sedo fortunately never experienced a "slump"

period and expanded mainly due to its strong international position.

This continual growth and recent strong upswing in the market

is also occurring in the British aftermarket.

Many, and often the best, sales go unmentioned

as they are between private parties and\\or subject to confidentiality

agreements. This is especially true in the .co.uk market where

many players are unwilling to divulge details of sales in an

effort to keep market prices down.

However, for all the recent strong.co.uk

sales there have been an equally high amount of bargain .co.uk

sales so far this year. Sales like Subculture.co.uk for £400,

Ann.co.uk for £400 and Amatuer.co.uk for £2,500

are typical of large discrepancy between value and price in

the .co.uk market, and show that there are still a lot of bargains

to be had.

.Co.Uk Lags Behind

Sedo has been a key part of the recent boom in the secondary

market and this success has been broad-based across all international

markets. The UK market has grown proportionally with the rest

of the aftermarket. The UK represents an important segment of

Sedo's customer base, however, .co.uk domain sales have some

way to go to catch up to sales of other TLDs.

This "catching up" becomes even

more apparent when you compare the success of the .de ccTLD

with that of .co.uk. The .de market in Germany mirrors that

of .com elsewhere, including some strong 6-figure sales. Sales

in volume roughly equal those of .coms at Sedo (this at over

$5 million in sales year-to-date) and have a promising future.

So why is the .de so much more successful than the .co.uk?


Why the lag?

There could be a myriad of reasons for the .co.uk sales lagging

behind other TLD sales in the UK market, and significantly behind

the analogous .de in Germany. Here we take a look at the most

plausible reasons for the discrepancies, which we see as:

* Market size

* TLD preference - ".com distraction"

* Paperwork intensive and costly transfers

*Lack of focused marketplace and community


Germany's larger population could be a major

reason for the difference. However, recent studies show that

the UK Internet market overall equals or exceeds that of Germany.

These results seem to indicate that market size is not as large

of a factor as population would have you believe.

Recent studies have shown some distraction

from .co.uk to .com, but seem to indicate that UK users prefer

.co.uk over .com to a higher degree even than German users'

preference for .de. However, the UK does have a larger share

of registered gTLDs than Germany. Also, the low percentage of

.co.uk sales at Sedo, when compared with the total number of

sales involving UK-based users, seems to indicate a preference

in the UK for other TLDs over the .co.uk ccTLD. So there does

seem to be a significant degree of ".com distraction"

in the UK domain market.

One major barrier to domain speculation

and a vibrant aftermarket in the .co.uk TLD is the paperwork-intensive

transfer process imposed by Nominet. Additional fees (GBP 35)

for a transfer levied by Nominet depress "low-end"

sales. Furthermore, UK privacy laws allow individual users to

leave the WHOIS registry blank for their domains. This anonymity

restricts the acquisition of domains and makes a sales platform

such as Sedo all the more critical for secondary market success.

Finally, the fragmented nature of the UK

domain name secondary market contributes to the current UK aftermarket.

Currently no pure UK-based domain forum or online domain journal

exists to exclusively cater to the UK market. Sedo has no major

competitors in the UK, and was able to fairly quickly consolidate

majority market share as an outsider. These factors all play

a role in creating a strong secondary market. More involvement

from a UK domain name community is certainly one the keys to

realizing this market's potential in the future.

The Future!

Sedo has been working hard to expand into the UK aftermarket

and raise the awareness of British domainers to the opportunities

in the UK and more specifically the .co.uk market. Sedo is continually

working with many of its UK partners to build a true community

and network of domainers of all levels from professional to

small market. This effort culminated recently in the Sedo-sponsored

Domain Conference in London this past July. Overall the current

growth seems likely to continue and increase, eventually leading

to a maturing of the market where .co.uk sales will fall in

line with their potential. Of course as long as the current

situation still exists there are many bargains for domainers

in the UK market, especially when hunting for .co.uk names!

So get out there and find that bargain .co.uk!