You can have a look at a SEC filing from BankRate.com, which provides details into its recent acquisitions, and it identifies over $80,000,000 in domain name acquisitions. The company specifically identifies what it spent on the domain names it acquired, although some of that value seems a bit high from my perspective. The total domain name spend recorded in the filing was $84,880,000.
Some of the domain names the company mentions that it acquired includes CreditCards.com ($26,500,000), CreditCards.ca ($650,000), InsuranceQuotes.com ($5,900,000), CD.com ($500,000), NetQuote.com ($40,900,000), Bargaineering.com ($2,700,000), CarInsuranceQuotes.com ($7,500,000) and a couple of others.
The figures mentioned above are specifically for these domain names and do not include customer lists or technology. The costs for everything else are also included in the filing but may be treated differently from the domain assets when it comes to taxes. I also suppose the domain name obviously increases in value when something is built on it, and perhaps that includes the goodwill associated with the brand.
I know it may seem far fetched that NetQuote.com was recorded as a $40 million domain acquisition, but here’s the exact quote from the filing: “Approximately $92.0 million was recorded as intangible assets consisting of Internet domain name for $40.9 million, customer relationships for $46.0 million, and developed technology for $5.1 million.”
One other interesting thing I noticed was BankRate’s amortization treatment for domain names. According to the filing, they amortize domain names from anywhere from 5 years to 25 years, depending on the domain name. I have no accounting experience so I won’t comment on why, but it’s interesting to note.
Thanks to George Kirikos for the tip.
Bargaineering.com – $2.7M.
Yeah, that is believable. I am guessing the prices are for some BS accounting trick.
Brad
@ Brad
LOL… Perhaps they consider the goodwill associated with the domain name as well, since it had been developed.
For instance, MutualFinds.com would be worth very little as a domain name alone. However, if it made $500 a day in PPC because of typo traffic, domain investors would pay a lot of money to own it.
Thanks Elliot for posting these numbers. It’s crazy to see how much some domain names go for. I find it very odd that BankRate can get way with an amortization treatment of up to 25 years when the whole modern domain system is barely that old.
I hope the domain names I own will be around in 25 years time, but I’m not holding my breath.
“For instance, MutualFinds.com would be worth very little as a domain name alone. However, if it made $500 a day in PPC because of typo traffic, domain investors would pay a lot of money to own it.”
I’d imagine on it’s own, with no good will, search positioning, partnership contracts, etc bargaineering.com doesn’t make registration fee.
There’s a reason they valued it at that much but it’s likely only going to be ever known by BR’s accountants.
Think about a bankruptcy liquidation event . . . think that name would fetch more than 10% of what they valued it even with search positioning ?
want to watch comments
If they just went public, they are pumping up their numbers big time with the domain names. Like you said, it’s an accounting issue and when they crash (if they do crash), those values might be the big part of a lawsuit.
This is classic corporate “accounting” 101 at it’s finest. LOL
not domain acquisitions, these are website acquisitions…bargaineering.com has had steady traffic for 4 plus years, there are not many sites that can claim 200k visitors per month, this is in line with their bankaholic acquistion, more than 1 way 2 make money on line and exit with a nice payday!
@ don
They broke the transaction down, and the # I reported was for the domain name.
Elliot, all investors are eligible to depreciate domain names on their taxes…just like any other asset. Usually this is done over a 5-10 year period, however that can be accelerated or decelerated based on tax liabilities at the time of acquisition.