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GoDaddy Launches Domain Investing Section on Website

GoDaddy has launched a new domain investing section on its website. If you click on the “Domains” drop down menu on GoDaddy’s website, you can see the “Domain Investing” category on the bottom right section (with the word “New” next to it). Clicking on this link takes you to a section of the website that will provide educational materials about domain name investing.

The section was created to help educate people about the business of domain investing. There are a variety of resources and tools referenced within this section of the website. Interestingly, there is also a forum for people to ask questions about domain investing. I do not see this replacing other industry forums, as this seems more geared to helping people who have GoDaddy related questions, although there are plenty of broader, industry-related discussion threads.

GoDaddy’s Joe Styler shared this with me:

Giuseppe Graziano Launches Domain Brokerage

From June of 2012 until this past March, Giuseppe Graziano worked in a business development role and as a domain broker at Domain Holdings. According to his LinkedIn profile, Giuseppe “successfully negotiated over 7 digits in domain sales.” Giuseppe recently went out on his own, and he just announced the launch of his domain name brokerage, GGRG.com.

GGRG.com plans to focus entirely on “liquid” domain names. This means Giuseppe will only be looking to broker high value short and numeric domain names. Domain names in these categories continue to see higher sale prices, and I understand that Giuseppe has experience in this niche.

Giuseppe shared some information about

Taking Less Money is a Difficult Decision

When I am in the process of evaluating a domain name to buy, I will “appraise” it in my head. This appraisal is very basic and consists of two numbers – what I think I could get for it should the right buyer come around and what I am sure I could get for it if I wanted to sell it quickly.

I’ll give you a quick example to illustrate how I consider the value of an acquisition. I think I could sell Drafting.com for $75,000 if the right buyer comes around, and I am very confident I could sell it at this moment for $18,000 if I wanted to liquidate it for some reason. You may have a differing opinion, but these numbers are what helps define my personal risk tolerance when buying a domain name, and we all have various levels of tolerance based on our businesses.

One issue most of us face is that sometimes the best and most obvious buyer for a domain name inquires about it, but he (or the company) doesn’t have the ability or interest in spending close to the value you hold for the domain name. For instance, a major CAD software company might want to buy Drafting.com, but the most they will spend is $30,000.

When this happens, I need to consider a few things to determine whether I should sell the domain name to this company for their best offer, or if I should hang on to the domain name and hope that a company with deeper pockets inquires or the company decides to up their offer at a later point.

In a situation like this, there are several things I consider:

  • Do I want the  cash instead of the domain name?
  • What are the tax implications of selling?
  • Can I improve my domain portfolio by selling this name and replacing it with another domain name?
  • If I see saw this on DNJournal’s sales report, would I think “wow, that was cheap?”
  • How many inquiries have I had on this domain name?
  • What are the odds that someone else will want to buy it for more money in the future?
  • Could I be wrong about my valuation of the domain name?
  • Have I already contacted other prospective buyers without any interest?

Although my business relies on the sale of domain names for the majority of its cash flow, I am probably not going to sell a domain name at a price I will regret in the future. However, there are times that it’s in my company’s best interest to sell a domain name for less than I think it’s worth.

Current State of the Market: Domain Broker Point of View

For those of us who frequently sell domain names, we know it can be challenging to do so in the current economic conditions. I reached out to several domain brokers to ask what they are currently experiencing in the domain aftermarket, and their insight is below.

Mike Fiol of Boxcar and DomainConsultant.com

“For years I’ve been criticizing our industry’s penchant for generalization. What is the state of the industry? Well, that depends on which segment you are referring to: ccTLDs, keyword rich, GEO, brandable, single word, etc. So let’s look at the good areas.

Brandable generic .coms have risen, as we predicted publicly in 2008, replacing the keyword rich variety as the sales staple. Got generic one-word domains? Hold. Other promising areas include ccTLDs, Spanish and GEO domains, the fastest growing traffic/end user segments.

But the truth is the domain industry is in flux, tossed into cautious turmoil by ICANN, leaving us at a transcendental crossroad. For there are two possible outcomes: the new gTLDs will devalue existing extensions or they will increase and perhaps, finally fortify value.

Domainers need to decide which road to take and by doing so, may help define the state of the industry…for at the moment, it is largely unpredictable, unidentifiable.”

Rob Sequin

“First, I’ll say that speculation is out of the market. So, the “good old days” of a quick flip on the forums or via a broker is pretty much dead from where I sit.

There is some speculation .co domains and there will be speculation in the next dot whatever too but established .com portfolio owners are either selling, developing and/or dropping domains but generally they are not buying.

There are a few portfolio owners who are adding to their portfolios IF they are presented with great domains that are a perfect fit for them AND priced reasonably.

There are end users who are buying but they are on the “mom and pop” end ($500 to $2500) or the real high end with start up with venture capital backing. I don’t have hard stats but I’d say the $5000 to $50,000 pricing for sales to end users is way off.

Also, the usual buyers in most of the drop auctions are just not there. I have watched LOTS of domains expire so I could hand reg them while several years ago I’d have to pay $69 to $250 for just low value domains that I wanted.”

Toby Clements

“When someone asks me how the industry is doing I only think of one thing every time. What have sales been like, and how does my bottom line look?

Well, this time is no different. When Elliot asked me about this I thought about the past two months of being back in the saddle selling names. Most of you that know me, know that am a salesman at heart. One thing I know for sure is to keep tabs on what is selling, and more importantly, what is not selling.

What I have been seeing is the less expensive names or “value oriented names” have taken a front seat for the masses. Names that sell from 1k – 6k are no brainers to most anyone that invests, and for those that are new to the game or don’t have large bankrolls, these are the most attractive.

I have done five, six and seven figure deals. I like all of them, but it’s my opinion that right now the really hot, and consistant sales are the smaller ones.

It’s great to hit doubles, triples, and home runs. It’s the best feeling in the world when you hit a grand slam, but don’t forget about the singles because they can win the game too.”

Dave Evanson of Sedo

“The current domain market may not be sizzling but it isn’t on ice either. It’s holding its own and doing much better than the rest of the economy. Buyers continue to be selective with many looking for their favorite verticals (such as insurance), categories and types of domains with monetization strategies and price ranges in mind. Money continues flowing in from pockets of global wealth, money managers, twenty trillion dollars a year in inheritance in North America alone to younger, more web savvy generations and from companies large and small shifting offline advertising dollars to online marketing including domain holdings.

Domain sellers are a bit more aggressive today given high levels of premium inventories on the market. Some “long time” domain investors need or want to raise cash while a growing number of them are coming into retirement age after 10-15 years in the business. Premium keyword .com names are appreciating nicely whereas .net and .org are hanging in there for now. With the new TLDs .info and .us may be on their last legs.

The creative talent behind .co is continuing to inject excitement into that baby. The 2,000 or so yet to be born extensions will have a few survivors. These, along with companies (like Facebook) promoting and using their own domains, will create more clutter in the space and the result will be a halo effect leaving the .com as king. The industry is becoming more sophisticated as evidenced in part by its ability to distinguish between, and appropriately valuing, end user and domain investor sales. An increasing percentage of blockbuster deals are staying private especially among non-public companies and domain investors.”

Pat Calvoni of Afternic

“In the past many purchases were made based on speculation—in the hope that the domain could be flipped for a significant profit. Now, with the economy still weak I think that buyers—both domain professionals and end users—are more cautious about their purchases than they were a few years ago. People are coming to the table with a specific business model, or a clear investment strategy in mind. This caution really means that we have to be more focused than ever on the “value sell” when negotiating.

People will spend, but only if they are really clear about the potential ROI from the domain purchase. I think that is where we provide a real advantage to both domain sellers and buyers. We’re here answering questions and clarifying the value proposition, which gets a lot of “on the fence” buyers sold.”

i.CO Auction: Bidder Deadline January 21

Snapnames/Moniker will be auctioning off the single letter domain name, i.CO at the beginning of February. In order to bid, entities must be pre-approved by January 21, 2011 – less than 10 days away. If you want to bid but aren’t approved, it looks like you’ll be SOL.

The private auction  will open online on Thursday, February 3, 2011 and conclude at 3:15 pm (US) Eastern time on Thursday, February 10, 2011. Bidding can be done online at Snapnames.

i.CO, or by contacting Moniker:  sales@moniker.com or (800) 688-6311.

According to the press release,

“I.CO is one of the shortest and most memorable URLs in existence,” said Juan Diego Calle, CEO and founder of .CO Internet S.A.S.   “This is an exceptionally valuable piece of Internet real estate, and the teams at SnapNames and Moniker have set up an outstanding auction process to alert and engage the right buyers.”

The .CO Registry has allocated only a few single-letter domain names to date, several of which have enjoyed high-profile success, including Twitter’s t.CO and GoDaddy’s x.CO, both used as branded URL shorteners, and Overstock’s o.CO, which is replacing Overstock.com as the company’s primary brand for all of its international websites.

e.CO was sold by Sedo last year for $81,000, and the domain name is currently up for sale. Interested buyers can visit e.CO to contact the domain owner. I understand the owner is considering offers of $350,000 or higher at the present time.

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