David Chelly, editor of Domaine1.fr wrote an article he wants to share with the readers of DomainNews. He discusses reasons why it is worth investing in French domain names and we think it is a very good article and hope you will enjoy it...
Reason # 1: A huge reservoir of endusers
French is the mother language of about 200 million people in the world and it is used by over 500 million people in dozens of countries...
Whereas France is a declining country, famous French multinationals such as L’Oréal, LVHM (Louis Vuitton), Renault, Carrefour or Danone continue to remain among the leading players in their sector, thanks to their international presence. There are even bigger and more profitable French companies in the energy, banking and pharmaceutical sectors, and also many more in other French-speaking countries like Belgium, Canada or Switzerland. Such companies spend billions of dollars of advertisement yearly and the online presence is a major goal for most of them. They have not yet invested in premium domain names, but it is not surprising nor worrying. France is not a pioneer of the internet and even in the highly-advanced USA, domain names are still mostly changing hands between domainers.
Reason # 2: Affordable and undervalued prices
Unlike domain names in English, prices of French domain names remain far from enduser prices. Until now, probably only a few dozens French domain names have been sold for more than €20,000, whereas a single page ad in a French periodical often requires a six-figure budget. Funny comparison when any significant domain name purchase generates a huge flow of free communication in the medias. After having acquired masculin.com in June 2007 for €150,000, which is the largest public transaction to date for a French domain name, the new owner declared that the buzz around this purchase has saved him several millions of euros in his communication budget.The current methods of domain name valuation created by domainers (domain age, number & quality of letters, extension & language, etc.) may be useful for some transactions, but they do not have any relevancy for endusers. Like for any other kind of investments, multinationals and SMEs from French-speaking countries will accept to pay up to the net present value of what a domain name is supposed to bring them. And, though their market may not be as wide as the English market, it is less competitive and margins are significantly higher. Prices should sharply rise as soon as French endusers become aware of the advantages that generic domain names bring in terms of type-in and purchasing traffic, image, recognition and strategy.
Reason # 3: An uncompetitive market
There is hardly a French domain name market because the number of active French-speaking domainers is extremely low, probably below one hundred. Nothing more normal in a country where no bank, no financial institution nor any business angel would accept to lend funds to purchase domain names. Where only six months ago, there was even not a single board for domain names in French, and where talking about domaining is still strictly prohibited in the two major French webmasters boards. Except to curse domainers and present them as cybersquatters/typosquatters, thieves and parasites, just like the established online magazines for domain names (Mail Club, Domaines Info, DNS News, etc.), which have never written anything positive about domaining, are repetedly doing. In those conditions, experienced international domainers, which are accustomed to a competitive market with a scarce offer at deterrent prices, can feel very comfortable with purchasing French domain names. That is why NetTraffic, a company owned by a famous US registrar, has been able to register and snap thousands of quality .fr domain names. Investing in .fr, which requires an address in France or a registration through a registrar that offer this service, is an easy and cheap way to build a valuable portfolio. The prestige, the recognition and the type-in are as good for French people for .fr as for .com. But .fr should preferably be only a part of your French portfolio because of the risks involved. The national registry has only recently recognized the existence of a secondary market but is still behaving like in a communist-style country. It is has been able to confiscate 8,000 domains to a single person in an arbitrary decision, and, for many reasons, an investment in French domain names should preferably be done in cooperation with local partners.
Reason # 4: Reliable local partners
The hostile environment for French domaining has a positive side-effect. Just like French entrepreneurs are doing very well abroad because it is almost impossible in their home country, French-speaking domainers are currently creating, by necessity, a community that is world top class. Development, ethics & vision seem to be among the current priorities of US domainers, but they are also integrated by French-speaking domainers. Regarding development, Virtual Network, a Swiss-based company with an outstanding portfolio of developed generic domain names (musique.com, jeux.com, humour.com, annonces.com…). soon understood that the most interesting thing in a domain name was not the raw material, but the transformation. And that end-users are feeling much more comfortable purchasing websites with members and traffic, rather than a unknown and frightening thing called “domain name”. Thanks to their mastering of key factors of success such as SEO and online marketing, Virtual Network’s names bring everyday hundreds of thousands of profit and receive dozens of offers from end-users. Ethics, at least in words, is compulsory to succeed in doing business in France.
The current situation in the French-speaking domaining community could be deemed as satisfactory in this matter. In a sector where total quality is very much lacking, Sedo France has been doing an excellent job, driven by a will of long-term prosperity and cooperation in a sound environment. Several courageous decisions have been taken to clean the sector, which is now ready to fully integrate in the internet economy.
Vision is also a criteria for which French-speaking domainers could be to some extent proud of themselves. French-speaking major players like Creafab, Domainerie, Domyno or Shopnames may not yet be sized to play an important role internationally, but their executives are full of ideas and contacts and ready to take a new dimension, when it is the right moment. And just like almost everybody in this tiny sector, they are reliable and willing to accompany any foreign player in the exploitation of the untapped French market.
Source: David Chelly, editor of Domaine1.fr - Submission to DomainNews.com - June 10th, 2008
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