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In
addition to the big buys at the T.R.A.F.F.I.C. conferences, 2006
saw blockbuster sales of Diamond.com for $7.5 million
and Vodka.com for $3 million. Roy Messer of Tallahassee,
Florida made the Vodka.com sale to the Russian Standard
Company (makers of Imperia brand vodka), with brokerage
help from Sedo.com.
|
Roy
Messer
Sold Vodka.com for $3 million |
Messer
told us “As a domainer, I have optimism that the
interest and value of domains is rising. For
me, 2006 produced one sale in seven figures and
several other sales in six figures. I feel
the publicity of reported sales will have
an "awakening" effect in keeping the
momentum moving to even higher numbers as we
enter 2007.”
Messer
added, “As long as we have at least two 800 pound
gorillas (Yahoo and Google), I think PPC revenue will
remain stable and possibly rise. My concerns are:
-
What
if one gorilla absorbs the other?
-
What
if the browser has changes that diminishes the
"type-in"?
-
Is
the issue of click fraud under control?
-
And
then there's ICANN - who knows what direction they may
take that could affect us all?
But
as I have optimism.com, I think in the short term,
we domainers have happy and more profitable days ahead!” |
One
key reason you see progressively higher sales in the aftermarket is that
domain financing
options have finally appeared in the market, making it easier to
budget high dollar domains. That space is being pioneered by DomainCapital.com
whose President, Robert Alfano, told us “nobody else is doing what we are doing, which is recognizing a domain name as an
asset and lending against it. The various live auctions that
Domain Capital partnered with Moniker on allowed us to see the
‘true value’ of a domain name and at the same time we were
able to meet a lot of our clients face-to-face,” Alfano said.
|
Robert
Alfano
President, Domain Capital |
“Domain
Capital launched in late 2005 and we were thrown right
into the deep end of the pool as we provided financing for
the purchase of Sex.com (Editor’s note: believed
to be at least $12 million). From there we
were able to see the value Domain Capital could provide to
this industry. We were able to meet a lot of great people
and we were fortunate to do business with a lot great
people. We can only hope that our services are looked upon
as a helping hand to a growing industry, because we
certainly have enjoyed being welcomed in and being a part
of something so exciting,” Alfano said.
With
high demand for domains and new financing options
available, the domain aftermarkets are superbly positioned at the
heart of the current domain boom. With a strong management
team and global presence, Sedo has been riding the
crest of the wave. |
|
Company
co-founder and CEO Tim Schumacher told us “Sedo
had a very good year in 2006. Compared with the previous
year, we have more than doubled our revenue and the
revenue which we generate monthly for our clients selling
and parking domains through Sedo.com.
For Sedo
2006, especially Q4, held many highlights: Vodka.com
was sold for $3 million, Sedo's highest sale
ever, we became the world's #1 domain parking
provider according to
webhosting.info, and probably the most significant
event, our current public shareholder AdLINK
increased its holding in Sedo to 75%, valuing
Sedo at $184 million. For us, this is a big
motivation to continue moving Sedo forward as the
world's largest domain trading and parking platform in the
coming years.”
As
for the industry at large, Schumacher noted “2006 was
certainly a very exciting year for the domain name
business. We saw a strong boom in all areas including
registration, PPC/parking, buying and selling, but the
fire was definitely fueled by the secondary market.” |
Tim
Schumacher
CEO & Co-Founder, Sedo.com |
“I
believe that our industry, in the broader picture
of the evolution of domain names, has moved into the two
phases of secondary acquisitions and portfolio consolidation. We
saw individual domain sales skyrocket, but also a wave of
portfolio sales.”
“One
of the most successful (but also what came to be the most
controversial) events of 2006, was the launch of the new .eu
extension. This was a major event completely motivated by
secondary market forces – speculators literally jumped onto this
new namespace,” Schumacher said.
|
Frederick
Schiwek
VP, EuroDNS.com |
Frederick
Schiwek, Vice President of EuroDNS.com
agreed saying, “I personally think that the most
significant event was the .eu land rush with 1,600
registrars fighting for the best names. This event I
think opened the minds of investors and registrars to
believe in the value of ccTLDs."
“In
the second half of 2006 we saw another interesting land
rush, which was the .mobi. This land rush opened a
door for domains on mobile devices and will make revenue
from domains available everywhere. Then there is .asia
which will start around April 2007, some new TLDs like .tel
or TLDs that will become unrestricted, for example .kr
(Korea) and .my (Malaysia) that will also
push our industry forward and open new opportunities. In
2006 Europe was on the move, 2007 will be the year of Asia!,"
Schiwek said. |
Meanwhile
investors
in the U.S. are starting to warm up to the American country code, .us,
now that it is making some inroads with major corporations. Some recent examples
include the Discover credit card company using Discover.us
as their main site after being spun off as a separate company by Morgan
Stanley. Also, Nestle's Pure Life water, a major
bottled water brand in America now has their URL, Nestle-PureLife.us
on the label of every bottle, and one of the world's largest makers
of projectors and LCD monitors, BenQ, is using BenQ.us
for their USA site. The URL is reportedly now plastered on taxis
everywhere you go in Las Vegas. It will take adoption by more
companies like these to achieve widespread recognition for the
American ccTLD, but names like Discover, Nestles and BenQ are very
nice bricks in the .us foundation.
We
are going to close this year’s state of the industry survey with
comments from pioneering domain investor and T.R.A.F.F.I.C.
co-founder Rick Schwartz. Over the years, no single domain owner
has displayed as much unwavering and contagious enthusiasm for
this industry as Schwartz has. Much of what he predicted over a
decade ago has now come to pass, so people tend to be all ears
when he has something to say. If any one has earned the right
to have the last word, it’s him.
|
“First
of all 2006 was just a terrific year by all accounts,"
Schwartz said. "It was a real break through year and
I see that continuing into 2007 and beyond. That trend was
most evident just the last few days of the year. The Time
magazine piece on the information age (picking You as the Person
of the Year), Google becoming a registrar and the
widely reported 25% increase in online sales as
compared with near flat sales in brick and mortar stores.
This will just continue the shift of ad dollars to the net
and leave less for traditional media. There are a LOT
of dollars coming online and that will transform what we
all do," Schwartz said.
“While
I see the industry as a whole doing very well and being
recognized for the value we hold I also think there is a
major downside. Domainers as a group have never had a very
good reputation. But I fear it is going to go from bad to
worse as we get every guy looking for get rich
opportunities to invade the space in a very unproductive
way." |
Rick
Schwartz
T.R.A.F.F.I.C. Co-Founder |
"Some
may ask why I say that. My answer would be a question. Do you know
that a 5 year old girl opening a lemonade stand has a higher
threshold for entering business than the new domainer that is
heading this way? With a lemonade stand you need a table, you need
a pitcher, you need lemons, you need water, sugar, spoons, cups
and a sign. With a domain, you need $6 and change and you
are the world's newest domainer!”
“You
may have not thought about it in this way before but when you take
the time to do that you will see what is coming and it won't be
pretty. While we have learned what is and is not accepted these
folks that are coming will play by a book with no rules
whatsoever. They will take trademark infringement to new lows.
While we try and cleanse our portfolios theirs will be domains
consisting of what we know is no longer acceptable. That said this
is a necessary evil and one of the mile markers I have been
looking for," Schwartz said.
"The main thing I personally see as a guy coming to the net
with a 20 year plan and 20 year window is that window is now fully
opened. The seed is germinated and the result is a thriving
industry with a lot of interest coming our way. We are now in
the zone as I would call it. This is the start of a domain
awareness that will shake things to the core. An overnight success
story a dozen years in the making.”
|
Rick
Schwartz with Ammar Kubba
of TrafficZ (the lead sponsor for all
2007 T.R.A.F.F.IC. conferences) |
“We
have some very sharp folks in our space. One brighter than
the next and it is great to see this unfold and the genius
behind many of these up and coming companies that are
expanding and getting much stronger. I specifically refer
to two companies. One in the Northeast and one in the
Northwest - Name Media and Demand Media. Both companies
with a strong, visible strategy and both on the march."
"We
saw several companies transform themselves to powerhouses
and that is just going to spread. Simply put, the race
is on and the forward momentum is something that can't
be stopped. The other companies in this space are not
about to sit back. They will show their strength in the
coming year.”
”I
have been a cheerleader for domains for a very long time
and now it is like being on a ship for over a decade on
the high seas and the one thing I can say is, "Land
ho!" I see land and there is no question that we
are entering a very interesting stage of domain name
history. I am overwhelmed by what I see coming. A tidal
wave of opportunity aimed right at all of us." |
"We
have a thriving aftermarket that is growing. The sale of
Diamonds.com, Vodka.com and Cameras.com make quite a group and
punctuates where we are and where we are heading. A domain auction
that watched $5.3 million in domain names change hands
in just 4 hours would have been unthinkable just a few
years back. What will those numbers look like in a few years from
now?,” Schwartz asked.
”As far as domains and values, they are going to continue going
up for quite some time. As different industries and sectors
understand the potential locked in a great domain,
things will change and they are already changing one industry at a
time.”
”We are pioneers of an industry heading into the annals of
history. Pretty exciting stuff and it is a great place to be. What
is coming will dwarf anything we have seen before. This is not
just hopeful thoughts. These are thoughts based on certain mile
markers we would pass at a given point in time to know we are on
that correct path. That 20 year plan I talked about is a blue
print I came up with that laid out certain events and when they
would unfold and in what order they would unfold. It is not an end
game after 20 years. After 20 years we will be in full throttle
and I see that continuing for many years after.”
“It
is like a rose and being able to look at it and describe
each petal before it blossoms and watch it in a time lapse
so you could see it spring to life. This rose called the
"domain industry" is just about to bloom and
the best is yet to come. While it is sweet now, the
picture I see coming to reality is nothing short of
historic. The best part is there are so many different
ways to be successful with domain names. Nobody has a
monopoly on domain name success. The most successful
domainers of tomorrow most likely don't own a single
domain name today.”
”Some think I am overly optimistic with regard to domain
names and virtually everything in life. But I have
listened to the critics and naysayers for well over a
decade and their predictions of doom and gloom were flat
out wrong. All successes should be applauded as "a
success for one is a success for all". If anything, I
can look back and say I underestimated just how
powerful and important domain names and traffic are in the
scheme of things.” |
Rick
Schwartz gets some affection from
Fabulous.com COO Dan Warner while stopping
for a shoeshine at T.R.A.F.F.I.C. Silicon Valley |
In
closing, Schwartz said, "I
see nothing but great things for 2007 and beyond. While we as
domainers may be a little battle fatigued, don't let that cloud
the vision of what is coming. The next 3 years will eclipse all of
our expectations. As I write this I celebrate the first day of my
12th year in this business. The 20 year plan is several years
ahead of schedule and my mission is to accelerate that in every
way possible. My greatest hope for 2007 is that in a year from now
we are all here, healthy, happy and have an even better
quality of life than we do now!”
*****
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