Now that I’ve had some more time to process yesterday’s news about Neustar acquiring the company that operates the .CO Registry, I want to share some of my thoughts about the deal. I’ve come to know some of the .CO executive team over the last several years, and it’s been exciting to watch the company grow and prosper.
Here are some of my thoughts about the news:
- Over the course of the past few years, the team at .CO has built .CO into a “cool” brand. What makes this all the more interesting is that they built this brand while marketing their product to entrepreneurs as a means of building their own “cool” brands.
- Making this 9 figure deal more exciting for me is the fact that the company was founded by domain investors. The executives have been involved in the domain investing space for many years, and it’s neat to see people succeed like they have succeeded.
- With a reported sale price of $109 million and revenue of $21 million (assuming I am reading the numbers right), I think a 5x revenue multiple is a solid sale price. Some people speculated that the deal was made by the registry because of the new gTLDs that are coming, but to my untrained finance eyes, it seems like the price was very good and was made from a position of strength.
- I also think Neustar got a good deal. If I am reading the numbers right, it seems like a 5x revenue multiple was a good buy considering that Neustar currently trades at a 13.99 P/E. I am not a finance guy, but that seems like a pretty good value for Neustar.
- I am not sure what Juan’s future plans are considering that he can probably not work for another day in his life and live like a king, but don’t forget that his other company, STRAAT Investments, applied for 13 new gTLD extensions. I would assume he could invest some of the sale price into the auctions for other extensions if he so chooses.
- I am interested to see how Neustar leverages the human capital that is included in the deal. According to a blog post from Juan, the plane is for Neustar to “leverage our team’s innovative domain marketing and brand building capabilities within and across Neustar’s broader domain portfolio.”
- I appreciate the fact that .CO has been an advertiser on my blog for three or four years. .CO has spent quite a bit of money on brand awareness and marketing, and I am curious how the new leadership will impact this. I wouldn’t be surprised to see Neustar take some cues from the .CO marketing team for some of its other extensions.
While I don’t currently hold any .CO domains I still have to congratulate the .CO team. How many companies which are only four years old get sold for over $100 million? Obviously .CO has done an excellent marketing job. This also illustrates the potential which exists in this industry. Perhaps .WEB or another new TLD might have similar success. We’ll see.
I really do not think .web is a marketable term from an end user business standpoint. If you are going to adopt the direct keyword navigation model within the new GTLD’s, you would think businesses would have much better options outside of .web.
Very nicely summarized Elliot!
Congrats to Juan.
A win-win for everyone involved.
First off Elliot thanks for not just reporting the news like every other blog but actually taking the time to break down the story and giving us your insight to it. Always fun to read and interact with you and the readers.
Give Calle credit for nailing the timing of this sale. Normally when a storm is coming like with these new gTLDs people panic and have a fire sale. Calle not only sold it at the perfect time but hit a home run with price.
.CO will continue to prosper because there are not many universal extensions coming since most of the new Gs are niche specific. The question is will Neustar continue the same type of marketing push that the .CO team has created. It seems like anytime a real corporation takes over a company that does unique marketing that the previous marketing takes a dive in a short period of time because the “suits” think their ideas are better than what is already implemented. Time will tell and we should have that answer in 6 months or less.
Everyone following the new Gs has been wondering which ones are going to be the biggest hits. Well if you really know what you are looking at then you just got your answer and it has everything to do with Calle.
Since Straat applied for .web they probably figure that they need the cash to win the extension.
In any case it’s good to know that the team is staying.
Congrats on the .co team for an excellent job done.
“.CO will continue to prosper because there are not many universal extensions coming since most of the new Gs are niche specific.”
Can somebody list some good reasons why the numbers would continue to go up when:
.co was supposed to mean company, now we have .company and many other business extensions coming. So the people you’re trying to sell domains to, now have more options for reg fee purchases
or .co is supposed to be global. With .web coming, which is closer to .net, do you think .co holders will continue to renew or try some of these other extensions?
Questions: 1) Didn’t Neustar already own half (or some part) of privately held “.CO Internet S.A.S.,” the company that operates the .CO domain name registry? See: http://www.prnewswire.com/news-releases/colombia-awards-co-cctld-registry-contract-to-co-internet-sas-62271367.html
2) Was not the other part-owner (see above link) Arcelandia S.A., “a 100% Colombian, privately owned company founded in 1984”?
3) Isn’t Neustar merely buying out Arcelandia’s interest? Was Arcelandia’s interest valued at $109 million, or is that the value Neustar places on the “strategic venture” between itself and Arcelandia? (According to the press release link above, Juan Calle’s company, STRAAT Investments of Miami, Florida, “served as lead advisor to Arcelandia and Neustar during the procurement process” but nothing is mentioned about STRAAT having an “ownership interest” although Juan did become CEO of the “strategic venture.”) Elliot, because of your relationships and connections with .CO, perhaps you could shed some light on all of this? In any event, I know Juan and his team at .CO have worked very hard, and I also wish them continued success in their endeavors.
I can only assume that any info that they are willing to share has been shared.
Perhaps this will shed some more light: https://whois.domaintools.com/arcelandia.com