Domain name company sees higher e-commerce revenue.
Communicate.com (OTCBB: CMNN.ob), a domain name company that owns valuable domains such as Boxing.com and Perfume.com, reported record quarterly revenue for the quarter ending March 31, 2007.
The company makes money primarily through its e-commerce sites such as Perfume.com and Karate.com as well as PPC income from domains such as Call.com. Retail sites are now generating over $15,000 per day although margins remain relatively slim. This low margin is partly because the company dropships many of its sales. This cuts margins but reduces risk. The company is starting (or planning) to carry inventory in the future. This should increase margins but increase risk. PPC revenues are down compared to last year, but the company has adjusted its parking pages and is recovering from a massive reduction in pay-per-click revenue that occurred last year. One thing I notice is that Communicate.com removed the preview pictures from its parked pages. Perhaps preview pictures don’t increase click-through rates afterall.
The company currently shows $1.4M in intangible assets related to domain sales, leasing, and advertising. I assume this is the book value of its domain names. With active sites like Perfume.com and stellar one word domains like Brazil.com and Yen.com, this number is low — but blame that on accounting rules. The market currently values the company at about $20M USD.
One possible thorn in its side is how it monetizes Cricket.com. Cricket.com predates Cricket Wireless, and Cricket.com has a disclaimer about not being affiliate with Cricket Wireless, but all of its ads are for cell phones. On the other hand, this domain isn’t generating more than $5,000 or so in PPC revenue per month on the high side (see comment below) and with the popularity of the sport Cricket this domain could sell for over $1M.
Adam Rabiner says
Andrew,
Thanks for the article about Communicate.com. Just a note that Cricket.com currently is our #1 PPC site by far, and does much more than $5K per month in revenues for us. I will see if I can provide you with the most recent figures.
Editor says
Thanks Adam. Does it concern you that the #1 PPC site is coming from traffic confused about a trademarked term?
Adam Rabiner says
Andrew,
We expect to see the PPC revs at some of our other parking pages pick up in Q2.
As for cricket.com, about 50% of the type-in traffic is international, looking for cricket sport content. Also, we are not advertising the domain at all, and are doing nothing to infringe on the mobile phone company’s trademark. We recently applied to become an affiliate of their’s a few months back, and they said no — which in my opinion, is crazy.
Editor says
Adam, quite frankly I think they’re crazy for not offering a lot of money to buy Cricket.com. My thought on the trademark was that the ads I see are all for wireless phones. But the bottom line is the domain existed before the company, and you have a disclaimer, which is probably more than you *have* to do.
Given the popularity of the internationl sport of cricket, I really think this is one of your most valuable domains.
chicago domainers says
Hey Andrew
Yea, I would guess more along the lines of about $50k/month