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.