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100,000 Domains Sold for $164 Million
miller60 writes "Here's a news item that puts some hard data on the domain typo millionaires post from a couple weeks back. Marchex Inc. just paid $164 million to buy Name Development Ltd., an obscure company that displays pay-per-click keyword ads on 100,000 domains. It's not a stock swap, either, as $155 million of that was in cash. The seller reportedly built the portfolio by scarfing up expiring domains (including hardware-update.com, previously owned by Microsoft and linked from within the Windows 2000 OS) and replacing the content with pay-per-click ads."
when you can buy them for 4.95$ a pop!?
Do a Google search for "web traffic" and look at all the AdWord advertisements. Almost all of them are sites that buy expired domain names or common misspellings of domain names, and for the low-low price of $2 they'll send thousands of people to your web site via such domains.
Also, for anyone that has used the site... www.whatismyip.com was up for an EBay auction that ended at about 11:00 pm EST last night. Last I checked the bidding was $55,000. Not sure what it ultimately sold for.
I'm a big tall mofo.
This isn't spam - you request a page, you see an advert, it's not forced into your inbox.
This is seeing an opportunity and using it, and they deserve a bit of success from that. Whether they deserve $164m worth of success is another matter.
Who meta-moderates the meta-moderators?
I work at an ISP. If all these domains point to the same class C or something I'll just block it at the router if it's purely advertising junk.
Anyone know details? Thanks.
- Cary
--Fairfax Underground: Where Fairfax County comes out to play
I wonder how much this will sell for?
http://slsahdot.org
If it walks and barks like a dog, it's a dog, no matter what you call it.
Have you ever called 1-800-COL-LECT? Have you ever called 1-800-COL-MECT? Same thing. You get a "collect call long distance provider". Just not the one you wanted. Profiting off of other peoples' errors isn't exactly a new idea. This is just a variation on a theme.
On a funny note, I originally heard about this 800 number scheme while reading Jenna Jameson's autobiography, "How to Make Love Like a Porn Star: A Cautionary Tale". Her husband apparentally made quite a bit of money in the mistyped 800 number business.
hi mom!
Not to be a bitch to a bitch, but sometimes e-mail addresses go defunct and one doesn't think to update the domain record because one doesn't realise that one needs that particular e-mail address to renew an expired domain. How many people have stopped using the e-mail address on their domain record because it was inundated with spam, or just registered with a temporary address? What happens if your e-mail address goes bad (i.e. a former free web email service decides to start charging, or an ISP goes under, or in a fit of rage you cancel all association with your ISP) and you forget your domain password? There are ways around it, but unless you've had to deal with it before, most people won't know what to do.
Please think.
I was told a story that McDonalds spends millions on strategic restraunt locations, where it would see the most traffic, and the condition of the neighborhood and all kinds of good statistics. what ever it takes to find the perfect store location.
Then burger king builds across the street.
What a lot of the "this isn't fair, this is criminal, this is predatory" posts seem to be predicated around is the mistaken belief that life is fair and that the stupid should have the same good life as the intelligent.
This is not a life insurance-selling shill forcing his way into some poor ignorant grandma's house, putting pressure tactics on her to buy into scam xyz. Much like people caught up in ponzi scams, Tom Vu seminars, what have you, it is entirely up to the user what he sees. Remember that truism about lotteries being a tax on people who're bad at math? Well there you go.
Nor are these guys pushing (for the most part) spyware, trojans, credit card theft, viruses, what-have-you, on unsuspecting PC users who've taken all reasonable precautions. I understand that your post is facetious (at least I hope it is) but referring to what I wrote above, the stupid, ignorant and lazy have exactly the same chances as everyone else. What they make of them is entirely up to them, including learning how to spell slsahdot.
Cole's Law: Thinly sliced cabbage
Well, the number is actually spelled "googol" and not google (which was an accidental misspelling of googol) or googil. Googil is actually closer to the real spelling.
You'd be an internet hero.
About Warren Buffet: Buffett believes that much of the problem with the economies of the United States and other industrialized countries in recent years results from the proliferation of persons and organizations who produce nothing directly but are compensated based on the volume of business which they transact. He feels that most stock trades are recommended and made primarily to benefit the brokers rather than the investors and has stated that he feels that the world would benefit if each person had a lifetime maximum of twenty stock trades. He steadfastly refuses to split Berkshire Hathaway stock because the purpose of this would be to facilitate trading, which he has no desire to do. -Wikipedia entry on Warren Buffett Read that passage, then read it again..and when you're done reading it, read it one more time. Then you'll understand why some knucklehead will pay 160 million clams for absolutely nothing of real hard value.
I don't mind if I happen to type in the wrong page and see a bunch of useless ads. What irks me is when I am trying to do a search and all it returns are links to those ad pages.
If I may say so, life is a game, and there's so much to do and so few turns.
-Reiner Knizia
With the revenue from this, they bought a collection of domain names of marginal value. It looks like they actually paid out only only $24.6 million on cash upfront for Name Development. And even that goes into escrow for 18 months. Name Development's income for 2004 was $4.6 million.
Name Development seems to be one guy operating out of the Virgin Islands who sold click-throughs to Yahoo:
Marchex is the target of spyware/adware litigation:
I don't see how this adds up to a company with a market cap of $761 million. This looks more like a dud dot-com.
Internet domain names are a lot like commercial real estate. The value is based on traffic count much like the number of cars that pass by a retail shopping center. Real estate investors also use solid investment analysis when considering the purchase of properties which makes the sale of these domains interesting.
It was noted on NetCraft that these domains get about 17 million unique visitors a month and at a $5.00 CPM (which is quite generous) that would be $85,000 a month ($1.02 million a year) in revenue. Consequently, the ROI (Return on Investment) would be 0.622% which is a very poor rate to receive.
In order to get a decent ROI, the new owners are going to have to increase traffic, create better content for higher paying ads, or provide some upsell item with a high profit margin and conversion rate. If this were a real estate property, this rate of return would definately make this property a "don't wanter".
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