Despite parking meltdown, Sedo’s sales success keeps it on the right path.
AdLINK Group, parent organization of Sedo, recently released its quarterly financial report (pdf). Despite a weak environment for domain parking revenue, the company seems to be holding its own in the current downturn.
Sales for the first nine months of 2008 are down 5.4% compared to the same period last year, with sales of EUR 42.4M. However, when you factor in adverse exchange rate conditions, the company grew revenue 6.25%.
Adlink blames weakness on domain parking:
This was due in particular to the changes in the policy and algorithms of one of our most important partner in the search engine business during the first quarter of 2008.
That partner is Google.
Given that domain parking revenue is down, and domain parking is a higher margin business than domain sales (which earn Sedo at most 10% gross margin), this means that domain sales at Sedo are increasing significantly.
Although the company doesn’t break out revenue between parking and sales, we can back into a decent estimate. In 2007 the company sold EUR 49.8M worth of domains. Let’s assume an average 10% commission, meaning sales commissions generated EUR 5M for the company. Last year the company paid EUR 34.5M to parking customers. If we assume the company paid out 50% of its parking revenue, then it earned about EUR 34.5M in 2007 from parking.
This obviously doesn’t add up to the company’s total sales, but it just shows how important parking is to the company’s income. Since know parking has been hit hard this year, you can decipher that domain sales are substantially higher in 2008 for the company to maintain level revenue numbers.
General user data also shows this increase:
-14.3 million domains, up 61% from same period last year
-6.1 million domains for sale, up 45%
-859,000 registered users, up 48%
-175 employees, up 22%
Tan Tran says
Hello,
Tan here from FreshDrop.net. I was curious if the figures of 859,000 registered users comes anywhere close to how many domainers there are in the world.
I’ve always been curious about that fact. Is 859,000 close to the number of domainers in the world or are we looking at a more substantial lesser number.
Tan
Andrew says
Tan,
Depends on who you consider a domainer. Some of these registered users are undoubtedly buyers including corporations. And many probably one a domain or two.
I suspect the “core” group of domainers is less than 10,000.
Adam says
andrew sp what’s your definition of domainer that you come up with 10,000 ?
859,000 seems substantially off to me regardless of whether they are buyers, sellers or “onsie-twosie” domain owners.
David J Castello says
Andrew:
The core stat of 10,000 domainers has been around for a while now – at least 2-3 years. I think the figure is much higher. I meet many of our small business advertisers and our talk will usually include domains. I would say that more than half of them own domains besides their own business domain and their reason for doing so is because of their perceived present and future value of these names. That makes them domainers. There is much more “domain fever” out there than we know.
Tan Tran says
Andrew,
That’s what our assumption is as well… somewhere in the 10k to 100k range… with a definition of a domainer as someone actively looking to acquire, hold, or sell domain names.
Would be great if someone had stats on this… a good way to measure growth in our industry. The more domainers, the more money will flow in.
Andrew says
@ Tran – Very difficult to measure…perhaps Sedo’s registered user # is a good proxy at least.
@ Adam – I really just pulled that out. DNForum has 68,000 members. Is that a better number? I don’t know…how many of those people are active domainers vs. just having a few domains? Hard to say.
Adam says
@andrew it would be nice if one of those forums qualified those #s. I think those are quite easy to pad. But even a survey can’t get to the real truth. If anyone knows I think it’s the parking companies since they see the earnings.
To me a domainer is someone who earns a substantial part of their living from domains, full-time or part-time but making a living is key. I’d guess the number to be 1/2 that 10k you and David are throwing out there.
Buying domains here and there on the side makes someone a hobbyist in my eyes not a domainer. Sort of like a person who has a camera and takes a few photos on the weekend, sure they may be considered a photographer but not in any real/”professional” sense.
About a year ago a domainer friend of mine was called by a company doing research in the domain space. The caller was doing a feasibility study to see how big the space was. He asked my friend “do you have any domains that make $100 a month?” My friend said “uh yeah” and the caller said “REALLY!?!” excitedly. He had been calling on tons of supposed domainers and not 1 of them had a domain that made more than a couple bucks a day.
Andrew says
@ Adam – by that definition I’d guess 3k-5k.
Tan Tran says
I read somewhere that Korea has the most domainers per capita in the world.
As well, i’ve been keeping an eye on the Chinese domainer space and they have been growing quite substantially.