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Masters of their domains
June 5, 2007
Page 1 of 4
The domain-name market is enjoying a great resurgence, writes Dan Skeen.
FOR years, gleeful capitalists have read about moon-shot domain speculation deals, as when Marc Ostrofsky sold the Business.com domain and turned his $US150,000 ($A183,000) investment into a $7.5 million sale. But the domain name market itself has had a phenomenal revival.
Australia is cashing in as well. Last week, jobs.com.au was bought by an obscure internet firm for a reported six-figure sum.
Shaking off some lean years following the dotcom deflation of the late 1990s, it is in the middle of a buying spree that may never be repeated. Like today's crop of web 2.0 success stories, new momentum has come from more sophisticated technology and more profitable opportunities. These same trends have fostered the growth of massive domain name portfolios that some claim have the potential to make Warren Buffet drool.
Dan Warner, chief strategy officer at Brisbane-based Dark Blue Sea Limited, is used to watching multimillion-dollar sales of domains such as Diamond.com and Vodka.com take the headlines. His story of a slow and steady accumulation of domains, bought for less than $7 and sold for thousands, day in and day out for several years, lacks get-rich-quick appeal. Yet this measured approach to domain accumulation has grown a $A5 million initial investment into a company with a market cap of $68 million.
His company holds the world's second-largest portfolio of domain names, with more than 550,000. NameMedia Inc., of Waltham, Massachusetts, has about 725,000. Together, these two companies hold more than 1 per cent of the world's domains.
Mr Warner recalls that just two years ago only 18 or 19 companies had more than 10,000 domains; today he estimates that 50 companies have portfolios of more than that size. "Everyone's been buying like mad," he says.
There certainly has been growth of domain-name portfolios: businesses built entirely around domain names, says Warren Adelman, president and chief executive of the world's largest domain name registrar, GoDaddy.
Last year saw the total number of top-level domain registrations reach 120,000,000, according to VeriSign, an increase of 32 per cent for the year. And the big portfolios are getting bigger. It's a buyers' market in the minds of many who make a living off domain names, which would explain why the pace of buying hasn't yet been matched by sales volume in the domain-name aftermarket.
"People were originally speculating, but over the last few years people are realising that this market is still emerging and is quite undervalued," says Alessandro Sorbello of Brisbane-based Intuitive Domains. "So the tendency is to acquire domain names and not put them on the market but to hold them."
Click here to see rest of article ~ 4 more pages.
_______
Enjoy,
Dan
June 5, 2007
Page 1 of 4
The domain-name market is enjoying a great resurgence, writes Dan Skeen.
FOR years, gleeful capitalists have read about moon-shot domain speculation deals, as when Marc Ostrofsky sold the Business.com domain and turned his $US150,000 ($A183,000) investment into a $7.5 million sale. But the domain name market itself has had a phenomenal revival.
Australia is cashing in as well. Last week, jobs.com.au was bought by an obscure internet firm for a reported six-figure sum.
Shaking off some lean years following the dotcom deflation of the late 1990s, it is in the middle of a buying spree that may never be repeated. Like today's crop of web 2.0 success stories, new momentum has come from more sophisticated technology and more profitable opportunities. These same trends have fostered the growth of massive domain name portfolios that some claim have the potential to make Warren Buffet drool.
Dan Warner, chief strategy officer at Brisbane-based Dark Blue Sea Limited, is used to watching multimillion-dollar sales of domains such as Diamond.com and Vodka.com take the headlines. His story of a slow and steady accumulation of domains, bought for less than $7 and sold for thousands, day in and day out for several years, lacks get-rich-quick appeal. Yet this measured approach to domain accumulation has grown a $A5 million initial investment into a company with a market cap of $68 million.
His company holds the world's second-largest portfolio of domain names, with more than 550,000. NameMedia Inc., of Waltham, Massachusetts, has about 725,000. Together, these two companies hold more than 1 per cent of the world's domains.
Mr Warner recalls that just two years ago only 18 or 19 companies had more than 10,000 domains; today he estimates that 50 companies have portfolios of more than that size. "Everyone's been buying like mad," he says.
There certainly has been growth of domain-name portfolios: businesses built entirely around domain names, says Warren Adelman, president and chief executive of the world's largest domain name registrar, GoDaddy.
Last year saw the total number of top-level domain registrations reach 120,000,000, according to VeriSign, an increase of 32 per cent for the year. And the big portfolios are getting bigger. It's a buyers' market in the minds of many who make a living off domain names, which would explain why the pace of buying hasn't yet been matched by sales volume in the domain-name aftermarket.
"People were originally speculating, but over the last few years people are realising that this market is still emerging and is quite undervalued," says Alessandro Sorbello of Brisbane-based Intuitive Domains. "So the tendency is to acquire domain names and not put them on the market but to hold them."
Click here to see rest of article ~ 4 more pages.
_______
Enjoy,
Dan
