Domain AuctionsDomain Development

A new liquidity model for domains

By October 13, 2009 4 Comments

Earlier this week, Epik led the purchase of HardDrives.com.  Epik had already developed the site and was familiar with the site’s statistics. The buyer is new to the business of buying domains but he got a fair outcome. The seller got a fast close.  Buyer and seller are both happy.

We are now running a similar (exclusive) process for the domains PearlEarrings.com and FamilyVacation.com. These  are both excellent names with high development potential where the seller has decided not to develop them.

What is notable here is the following:

1. The buyer is not interested in owning a parked domain. He is interested in building a business. He is not a domain speculator.  This is notable because it has implications for domainers whose traditional buyer (other domainers) are either tapped out or holding out for lower prices.

2. The seller significantly increased his chances of getting the domain sold by partnering with Epik as the  3rd party developer who could substantiate statistics about site traffic and monetization.

3. The buyer got a running start at building a business. Epik brokered the transaction for a modest escrow fee in order to have the opportunity to continue to develop the name on the Epik platform.

The recent lesson of Insure.com’s blockbuster sale for $16 million is also instructive. This was more than a domain. It was a website with a vast number of backlinks. In other words, development of the name reduced risk for the buyer, which in turn justifies a higher purchase price.

These are challenging times for many domainers.  Innovation and cooperation are important ingredients for getting deals done, particularly when deals need to be done on short notice.

Join the discussion 4 Comments

  • Jim says:

    So what are you saying Rob? You would like those who own category domains to contact you regarding developing them? Or are you looking to potentially buy high quality names, after you have developed them?

    • Rob Monster says:

      Each category defining domain name is unique. Each owner’s situation is unique. My objective is to engage a dialog that unlocks the value of an undeveloped domain name in a way that benefits all stakeholders in ways that make business sense. There is no single formula, but I believe there is a pattern emerging for getting deals done in creative ways. We are buying names actively but simply can’t buy every name, particularly when it comes to 6-figure or even 7-figure names, let alone 5-figure names. In some cases, for high potential names, we have structured short-term option agreements whereby we can aggressively work on developing a name and pursue business development strategies with potential partners. Again, there is no one formula but we do have some templates that are working.

  • nSathees says:

    Rob,

    Are you talking only of .com’s or also ccTLD’s?

    What do you think of ToursDeals.com? is that some thing you would work on?

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