More Companies Buying TLDs Than Domain Portfolios

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In 2018, Afilias published a sponsored article on CircleID announcing that the company was looking to buy domain extensions at NamesCon. That was a couple of years ago, and the company is advertising on Domain Incite with a prominent banner that makes it clear the company is still seeking to acquire TLDs. That got me thinking about whether there are more companies looking to buy domain extensions or more companies looking to buy domain name portfolios.

Over the years, there have been quite a few companies that acquired domain name portfolios. Companies like IREIT, Marchex, and Rightside have either acquired portfolios or already sold their portfolios. At the moment, I think the only companies interested in buying domain portfolios are GoDaddy (NameFind) and possibly Endurance (BuyDomains). From what I understand, the companies are highly selective and the preference is portfolios with at least 10,000 domain names that have a considerable number of liquid assets.

When it comes to TLDs, I think there are several companies that actively buy domain extensions. I am pretty certain XYZ, Donuts, and Afilias have all recently acquired new gTLD extensions and would acquire one or more given the opportunity. Even GoDaddy acquired Neustar and the extensions it owns and operates. There may be others I am not thinking about off the top of my head.

This makes sense to me. Companies that operate domain extensions can operate other extensions at a relatively low incremental cost. TLD operators also have existing deals with domain registrars, allowing them to easily integrate additional TLDs into existing deals. Depending on when the extension was acquired, there may be recurring revenue from registrations, and there may be reserved domain names that can be sold at premium prices.

With domain name portfolios, there aren’t many large independently owned domain portfolios that are available to purchase any longer. I would imagine there are a few that are available for the right price, but a portfolio acquisition is a very large sunk cost with high ongoing holding costs.

I would not be surprised if we learn about future domain portfolio acquisitions, but there aren’t many buyers right now. However, I would be very surprised if there are not future TLD acquisitions, as there seem to be several buyers actively seeking to acquire extensions.

10 COMMENTS

    • Seen? Not really, but I never saw Frank Schilling, Mike Berkens, Marchex, Ian Andrew, or others actively selling the portfolios GoDaddy acquired from them either.

  1. Most investor portfolios are full of worthless junk better left to expire than renew anyway. Would you want to acquire the liabilities inherent to such portfolios?

    • Yes, I completely agree. A recent blog post asking people to post their best .com domain names for sale pretty much illustrates this, sadly.

  2. Seems like high quality portfolios are selling on about 3x-4x revenue at the top end. I think there is no growth in revenue and it requires major reinvestment capital to replace the sold names. Can understand why very few co’s would want to buy.

    If you look at BuyDomains the portfolio has been written down to $18million. It sold years ago for $88million. Annual sales look to be less than half what they were in the past, about $4.7 million. Given the sub $5k prices BuyDomains are getting it would potentially cost them $1-2 million to replace those sold names each year.

    Frank Schilling got a $100million offer in 2006, bought a tonne of domains for the next 14 years and then sold for $88.5million. Where is the appeal in that business?

    • “Frank Schilling got a $100million offer in 2006, bought a tonne of domains for the next 14 years and then sold for $88.5million. Where is the appeal in that business?”

      You’re implying that Frank should have taken the offer in 2006.

      You state that for 14 years after he received a “higher” offer, he continued to buy more and then sold it for less…

      Do you think he sold any domains, Snoopy? Obviously he did. Many millions of dollars worth. Why don’t you guess? Because your statement is implying it’s negligible.

      Elliot – can we please put a fact checking label on Snoopy’s posts. He’s out of control.

  3. The funny thing about acquiring a new gTLD extension is that no Registry will publicly say it when there are (so) many buyers. Some Registries just have dropped it and want not “to sell”, but “get rid of” their TLD. If one is able to advertise the sale of a domain name, I don’t see the problem with doing the same with a Registry. The message is negative when it is too late, it is not when the Registry is still profitable. There is a multiple Registry selling at least 1 TLD right now. Expect an announcement soon 😉

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