A panel at TRAFFIC discusses how valuable your domains are and the domain name aftermarket.
A big topic at the Traffic conference is how domain investors should place a value on their portfolio. And if you want to sell, what kind of buyer do you want? Not all buyers are alike. Some are investor groups, for instance, while others are small or midsize businesses seeking to acquire a domain to build their business. A small-business owner may be willing to pay a much higher multiple for a single domain than an investor aggregating a large portfolio of domains and focusing on paid-search advertising revenue. Today, a five-member panel including representatives of Sedo and Afternic, two major domain brokerages, tackled these issues. Here’s a snippet of some of their comments, edited for clarity:
Matt Bentley, CEO of Sedo.com: “How do you sell to end users? Sell on their timeframe, not yours. Don’t try to tell them how to run their business. Don’t hard-sell; get the word out, and let them come to you. Pitch on hard business value (real dollars), not soft factors. Work your connections.”
Roger Collins, CEO of Afternic.com: “There’s still a disconnect between buyers and sellers on the thinking about valuation,” and the aftermarket services still have a lot of work to do to promote to small businesses the opportunity to acquire names on those sites.
Robert Hoult, executive vice president, InterSearch Group, a search-marketing, domain portal and parking company: “We’re not doing as much buying of domains as we would like” because of market inefficiencies. And he offers some advice for domain sellers: “Use credible data to support your asset. Don’t tell buyers that Fish.com sold for $1 million to justify your asking price. Buyers want to hear why you think your asset is valuable. Fish.com is only relevant if you’re actually selling Fish.com.”
Jordan Rohan, Internet analyst, RBC Capital Markets: There are certain risks for domain owners, including Yahoo’s coming adoption of “smart pricing,” which could reduce yields for parked domains. “So developing your site at some level, even if it means cutting back on PPC ad revenue, to get increased visitation is important.”
Dan Warner, chief operating officer, Dark Blue Sea Ltd./Fabulous.com: The current aftermarket “is fundamentally broken. The sales are completely, utterly reactive sales. Customers are having to find their own way. It is not an open market. There are a lot of fundamental reasons – there’s not enough spent on marketing and commissions are too low. If we can all work together as a community to increase liquidity, you actually would double the value of your portfolio.”
Leave a Comment