Earlier this week we came across a great piece of analysis by Ron Jackson over at DNJournal. Ron took a deep dive into reported domain sales for 2011 and made interesting comparisons with 2010.

It led us to wonder about how Flippa website sales performed for the same period.

To make it comparable, we followed DNJournal’s lead and categorized websites into .coms, ccTLDs (eg .uk, .ca, .au), and non-.com gTLDs (eg .net, .org), and also excluded .com sales below $2,000 and other TLD sales below $1,000.

While this led to website transaction volumes clocking in at around 10% of the same volume in the domains data set, it uncovered some fascinating results.

Website dollar sales grew by over 50% while domains declined by 5%

The DNJournal records showed a 2% increase in total dollar volume in .com domain sales to reach $67.2 million for 2011 – unless we include the $13 million sale of Sex.com in 2010, which would mean domain sales volume dropped by 15%. Our records from the Flippa marketplace showed a staggering 57% increase in website sales volume to reach $15.5 million in .com websites sold for over $2,000.

While non-.com TLD domains suffered a decrease of 11% to sell just $10.2 million in 2011, their website equivalents increased by 63% to reach almost $3 million in sales volume. Websites with ccTLDs were again arguably too low in volume to provide much insight but did increased in total dollar volume by over 150%.

All of this goes some way to explain why Flippa’s total dollar transaction volume just shot past $70 million.

Websites held their value more than domains from 2010 to 2011

Median Sale prices declined marginally across the board. However, for .com domains, median prices declined by 14% to $3,000 while .com website median prices went down by just 3% to $4,350. For non-.com TLDs, stand-alone domains declined by 10% to $1,800 while their websites peers were selling only 5% lower at $2,000.

Websites with cc TLDs broke trend and were selling for a median price of $1,750 (down 8% on previous year) compared to just domains that clocked in at $2,000 (down 3% on previous year) – possibly due to the very low transaction volume for this category of websites.

Note that both the DNJournal figures as well as our own are but a subset of total transactions in the respective domain and website marketplaces – but ultimately enough to give you an idea on overall market trends.

Any views on what drove these shifts from 2010 to 2011? What does it mean for 2012? Let us know in the comments below.

Image: polarjez

Just over a year ago, we introduced a feature that allowed website sellers to indicate whether their website was New or Established.

The trouble we’ve been seeing as of late is that the distinction between New or Established has become largely arbitrary. Some sellers are listing websites created in the last month with zero traffic as being Established, while others have listed websites created over a year ago with traffic AND revenue as being New!

We were confused and it would seem that website buyers were too. Only 4% of website searches in the last month have used the Established/New distinction – this is compared to 73% of searches that involve related metrics such as website age, uniques and revenue.

At the end of the day, it would seem that website buyers have varying views on what constitutes a New versus Established website. Rather than have someone define this for them, we are removing the arbitrary New versus Established website split on Flippa.

What Does This Mean for Website Buyers?

Not a whole lot. We expect that most buyers will continue to use the revenue, traffic and age search refinements we rolled out earlier this year. However, now every website listing page will include core metrics such as PageRank, Domain Registration, Links/Keywords in Google, Compete Stats and Copyscape scores.

Note that the Established tag was already removed from results pages earlier this month.

For the few folk who had saved searches containing the New v Established distinction, these searches will now return all websites from which you can refine using your own criteria.

What Does This Mean for Website Sellers?

Website sellers will no longer need to define whether they think their website is New or Established. One less step to getting a listing live. Note that some sellers may see the distinction on existing listings – this will go away in time.

Given the low numbers of users actually using the split, we’re not expecting this change have a big impact to the website buyer and seller community. However, as always, we’d love to hear if you especially love or hate this change in the comments below.

Image: Seth Anderson

We’ve sold over $50 million worth of websites and have the largest set of data about buying and selling websites anywhere in the world. We find this data absolutely fascinating and thought it high time that we share it with the broader community (rather than just with our immediate friends and family … who roll their eyes at the mention of page views or monetization methods!).

So we’re going to deliver a regular “State of the Website Economy” report, each focusing on a specific area of our comprehensive website sales data as an infographic. We’re focusing on domains – the foundation of websites – for this inaugural edition:

• What is the relationship between website values and their country-specific Top Level Domains (TLDs like .us and .tv)?
• Which domains beat the market average?
• How does domain length influences website value?

Finally, we answer the question on everyone’s mind: Does anyone really give a hoot that GoDaddy CEO Bob Parsons shot an elephant in Africa earlier this year?

Enjoy!

To put this together, we took the data from dubstep website and domain listings that ended between November 2010 and July 2011 – representing over $16 million in website sales.

What we learned

1. .ca websites tend to sell for more than .us websites (or most other county domains for that matter).
2. .me comes from Montenegro (yes, we do know that a number of formally country-specific top level domains are used more globally such as .co, .tv, .me, .ly and .bz!).
3. Despite domain registrars pushing .co and the number of recent high profile single-letter .co sales, there is not a great deal of demand for .co websites as buyers still seem to prefer .com.
4. While .info and .net websites predictably sell below the market average, we were surprised to see .biz perform fairly strongly.
5. Website values drops rapidly once you go past 10 characters in your domain – as evidenced by the recent sale of iWillUseGoogleBeforeAskingDumbQuestions.com
6. There was an uproar and threats of GoDaddy boycotts from across the globe when Bob Parsons shot an elephant in Zimbabwe, but the event failed to resonate in the long-term as website creators continue to use GoDaddy. In fact, their share of registrations seems to have increased since the shooting, and their share of website sales hasn’t diminished when looked at relative to the rest of the website market. We doubt the event even factored into GoDaddy’s $2.25 billion sale to private equity firms last month!

 Do any of these results surprise you? Is there anything you’d like to see in future editions? Let us know in the comments below.

We’ve recently been in contact with a number of website buyers on Flippa who have voiced concerns at the number of brand new, start-up sites on Flippa with seemingly robust traffic performance.

One such buyer known on Flippa as CallMeFlipper suggests that while it is technically possible for start-up sites to get good traffic in a short period of time, some dishonest sellers may be resorting to PPV traffic to artificially inflate their traffic performance.

So What Is PPV?

Pay Per View (PPV) traffic is when the site owner pays for additional traffic to their site, most frequently via adult content sites, to boost their page views.

The Wall Street Journal ran a story on this a few weeks ago in the context of how this is used to exaggerate traffic claims to advertisers (non-WSJ subscribers can access the non-paywalled version at ITWorld.com).

In a nutshell, a web user (or in that case “adult content consumer”) goes to a website which automatically opens a stack of other windows for sites whose owners are paying for additional page impressions. The following image from the WSJ outlines this in more detail.

In the context of buying websites, PPV traffic can be used to artificially inflate a website’s audience. A less scrupulous seller may even preserve the PPV traffic for long enough to avoid subsequent charge-backs. At best, the new owner is left with a website that has no traffic. At worst, their AdSense account may become banned as ad networks such as Google are cracking down on PPV traffic sites.

How do we know this? Back in 2008, CallMeFlipper trialed PPV on one of his sites as a marketing tool. He was very surprised to see $100 in AdSense revenue hit his account within 24 hours. Surprise and delight turned shortly afterwards to shock when Google terminated his AdSense account. Wiser for the experience, he hopes that Flippa buyers and sellers can learn from his mistakes.

So How Do I Avoid Considering Websites That Are Using PPV?

While verified Google Analytics remains the only way to be truly confident about a website’s traffic claims, website buyers will need to look deeper to check for telltale signs that the traffic has been purchased.

As such, you should be concerned when stats report display any of the following:

• The biggest traffic source is “Direct”. This is exceptionally difficult to achieve for a new site and could suggest that it is as a result of the aforementioned pop-up page load
• The bulk of visits are by new visitors—how is a new site getting so many new visitors, and why aren’t they coming back? This is especially concerning when the site also relies on direct traffic—how does a new user know to come to the site directly if they’ve never been there before?
• Low pages per visit and average time on site—if you were surfing the web and a bunch of sites popped up against your wishes, you’d typically shut them down in an instant. This is typical of PPV which results in only one page being viewed and time on site being measured in seconds

While different sites behave differently across these metrics, extremes such as those outlined above should raise alarm bells. For the sake of benchmarking, Flippa has nearly 10 pages viewed per visitor, a bounce rate of 30%, average time on site of over 10 minutes with one third of our users being new visits.

What if the website auction you’re looking at doesn’t provide verified Google Analytics, or the verified stats don’t include the metrics outlined above? In this case, it’s much more difficult to assess the legitimacy of the stats and you should only proceed if you are comfortable with the resulting risk.

Why Doesn’t Flippa Automatically Block These Listings?

There is unfortunately no technical replacement for due diligence. Flippa cannot simply block start-up sites listing on the basis that they have incredible traffic as they may be clean as a whistle. There are furthermore no APIs for us to access Google Analytics to automatically flag websites with metrics such as high bounce rates from direct traffic.

(OK, there is actually an API, but it provides no information about which site the measurements are for, so we’d be giving you false comfort in the case where multiple sites use the same Analytics code to bump up their results for dubstep.)

Regardless, we hope posts like this go a long way in assisting website buyers in making informed decisions.

Oh, and before anyone asks: no, we are not planning on changing our no-adult-content website policy!

Used PPV for your website? Bought a website you suspect used PPV? We’d love to hear about your experiences in the comments below….

While listings, bids and sales are already thundering along on Flippa for 2011, it is worth taking a few moments to reflect on 2010 – the first full calendar year that Flippa has been in operation.

2010 by the Numbers

Over 150,000 bids were placed on Flippa website/domain auctions in 2010 which drove the nearly 20,000 successful auctions and private sales we saw for the year. This amounted to almost $21M worth of websites and domain names being sold on the industry’s most active marketplace.

We had almost 2 million unique visitors come to Flippa in 2010 according to our analytics. In terms of the active website buying and selling community, we had our 90,000th user registration in 2010 which goes a long way to explain the 1.6 million logins we had for the year!

Another sign of the booming growth in the Flippa user community is that our support team managed nearly 20,000 customer queries. On a less positive note, the team suspended or banned over 2,300 user accounts in 2010, primarily for registering duplicate accounts, shill bidding or not following through on a won auction transaction – the types of users the rest of the Flippa community won’t miss!

Our analysis also showed that Flippa users put websites/domains on their watchlist over 130,000 times during 2010 and around 135,000 comments were left on 70,000 listings.

2010 Auction Highlights

A few of our favorite sites that were auctioned on Flippa and sold for 6 figures:

• s9.com
• retweet.com
• list-of-companies.org
• debate.org
• blogtopsites.com
• puppiesndogs.com

There were also a few auctions that captured the attention of technology and business commentators:

• Facemash.com
• Audioo.com
• Qwitter.com
• Song.ly

The precedent set by these terrific websites in 2010 is already looking to continue through 2011 with exciting listings of the likes of Links.com, ay.com, songbright,  dirt.com and twaud.io.

A Thanks for the Year That Was

As these numbers indicate, Flippa remains the undisputed number 1 marketplace for buying and selling websites.

Naturally, the terrific results we see on Flippa are due to a number of important factors.

While big thanks are due to our tireless support and development teams here at Flippa HQ, the biggest thanks needs to be directed to all the active buyers and sellers that make Flippa the number one destination for anyone looking to buy or sell websites.

We are humbled by your ongoing support and look forward to bringing you an ever increasing return on investment in 2011!

What was your most memorable auction or private sale on Flippa in 2010? Let us know below …

Image: coquetboy

More than 55% of the auctions on Flippa result in a sale, which is not a bad success rate. However, of those which finish unsuccessfully, almost half have bids – they just fall a little short of the seller’s reserve.

Until now, these sellers were left with two options:

1. Re-list their website and go through the effort of managing another auction
2. Give up on selling their website

But now there’s a third option. Flippa now gives the seller some time to negotiate with the highest bidder, when the site has failed to sell at auction.

So how does it work?

When an auction ends below the reserve, the seller’s view of the auction page now includes a “Make an Offer” link.

By clicking on a link, the seller can provide an offer amount and message for the highest bidder. The seller can then manage their negotiations through the auction page.

This sends a message to the highest bidder allowing them to accept the bid, reject the bid, or make a counter offer.

If a counter offer is made, the process continues until the buyer and seller ultimately agree on a price (or otherwise end negotiations).

This successful outcome is then reflected on the auction page, congratulations!

Note that the opportunity to initiate negotiations remains in place for 3 days and the process is only visible to the buyer and seller. The listing will remain in the “Ended Unsold” area on Flippa until the negotiations are successful.

This “Highest Bidder Negotiation” feature is a great way for sellers to avoid the effort of re-listing their website on Flippa – especially when a seller might have, to put it mildly, over-estimated the initial market value of their site.

As always, we look forward to hearing feedback from our buyers and sellers on this new feature below.

Can you find yours? Just in case someone decides to count them, there aren’t actually 1250 sites in the graphic, there’s only about 1000. Still, it’s pretty impressive! March is shaping up to be even bigger.

The boys have slipped some great features in to Flippa in the last few days, and there’s more coming!

Flippa on Twitter

Followers of Flippa on Twitter know that this week we’re rolling out a great feature, a dispute procedure which gives you more certainty when a sale doesn’t go through. Want to have the success fee waived and a free relisting when the buyer or seller is dodgy? Have a look on Twitter! You should follow us on there because that’s where new feature announcements pop up first.

More Listing Stats

A couple of switched-on users let us know last week that Compete can be a great source for stats about a site. Guess what? They were right! So we took a few hours to incorporate the Compete public API into Flippa. Now you’ll see stats direct from Compete when you view listings on Flippa. It’s all gonna help buyers make more informed decisions about their purchases. (Coming soon is the ability to filter and sort on these stats.)

Thanks heaps to those Flippa users! If there’s anything you use when assessing a site which could feasibly be incorporated into Flippa, don’t hesitate to let us know. We’re all about getting you as much information as possible. (You might even end up with a handful of credits for your trouble…) Either let us know at the Flippa UserVoice or email us at Flippa Support if you have any brainwaves.

Double-Page Screenshots

Another interesting feature is that we now have double-page screenshots on new listings. This is a bit of visual sugar for your listing page. For an example of what I’m talking about, have a look at the Twollow listing:

Twollow For Sale on Flippa

Pretty? Or useless? Let us know!

Reduce Listing Duration

Auction owners sometimes need to change their listing’s end time. It’s always been possible to finish a listing early, but not to shorten it. We won’t be letting sellers lengthen listings as that’s dodgy—buyers deserve to know what they’re bidding on. But it’s now possible to reduce the duration of a listing, down to at least a day from the current time. Have a look on your listing page in the owner action box to do this.

See “Watching” Count

Sellers can now see how many people have their listing on their watchlist—have a look in the top right corner of your listing page near the view count. This was requested by a few people. Let’s hope it helps you gauge interest in your listing!