How Domain Sales are Increasing Domain Values
Monte: Right, which then falls into increasing values of domain names.
Richard: Exactly.
Monte: Obviously, because when you’re the publisher or a parking page that provides these types of results and you’re earning revenue, generating traffic and, you know, in some cases even being indexed as a result of having something live, you’re domain values are going up.
Richard: Absolutely. I mean, the domain values were really low about a year, year and a half ago, and I’m really kicking myself for not acquiring more domains during that time. But now, domains have just, you know, they’re souring high again, and I don’t believe that they’re in a bubble, I believe that there’s significant value being generated from these domain names, and that reflects then into the market prices of domain names. I mean, granted, you know, you’ll see domain names listed at Ebay for millions of dollars that aren’t worth $35.
Monte: Right, well that’s probably the reason why Ebay’s domain sales I think equated in all of last year to about $14,000.
Richard: Right.
Monte: As one of the major portals where, you know, we’ve sold several millions dollars worth of domain names and some of the other sites have, as well.
Richard: Exactly. And, you know, with the [inaudible] search [inaudible] deal that’s been [inaudible] that really sets a line in the sand for everyone to say, you know, this is a real industry, we’re not just guys sitting in basements, this is a real industry, which is generating real revenues and it’s being recognized by the market, by the public markets.
Monte: Right. And I know for a fact that’s going to be the first deal that’s going to be done this year or last year, there are several major domain acquisition deals on the table, all kinds of NDA sign, there’s all kinds of plays going on, and I think we’re gonna see a lot of more lines in the sand that are gonna be at a lot of different values, but that will show and prove that they’re truly assets here that we’re dealing with that have long term value.
Richard: I believe that--I mean, you’ve seen it in other industries, where there’s [inaudible] that go on, so if you have a small domain portfolio, you may be able to sell for three to four years revenue, so medium size guy who can then sell for five or six years revenue, until it’s at a size where you’ve got a buyer who’s willing to pay, you know, seven or eight times revenue.
Monte: Yeah, right.
Richard: So there--you know, the larger you are, the more that you’re going to be able to command from someone like [inaudible]. Because [inaudible] and others like them, it takes the same amount of work to put together $165 million deal as it does to put together a $100,000 deal. So they’d much larger work on the larger deals.
Monte: Right.
Richard: So there’s definitely rollup opportunities for domainers.
Monte: Yeah, for sure.
Richard: And, you know, the increasing public knowledge, just the [inaudible] is putting in, but just overall, the overall acceptance of buying a domain name off someone else doesn’t have the disdain that it used to have back in 2000 or 1999/2000/2001. People are like oh, you know, I don’t want to pay someone, some cyber-swatter, you know, those days have really passed, and it’s much more acceptable to say, well, if you’d like a domain name for your website, more likely than not, you’re going to need to buy it.
Monte: Right.
Richard: And, you know, that’s just general--
Monte: And it’s okay, like I’ve mentioned in a couple of the previous shows, it’s okay to spend a little bit more money to protect your brand and cover yourself, it’s worth it. If you’re in it for the long-term, and long-term on the internet has different meanings to different people, but we’re not talking about thinking about that a domain names costs $10 or $7 or $14 or $35 to register, and if you have to pay several thousand dollars for it, you’re talking about a long-term investment that’s gonna keep growing in value.
The [inaudible] sale is proof, you know, at a large number that domains hold these types of values, there’s reasons behind it, even the Fortune 500 companies are coming back on and I’m dealing with several right now on acquiring domain names for added products and services, they’re wiling to pay more money now then they were in the past, and it’s just proof that it’s turning around quite a bit.
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