Company values retail value of portfolio at approximately $1,000 USD per domain.

A Dark Blue Sea investor presentation (pdf) suggests that the retail value of its 570,000 domain portfolio is about $600 million. The presentation also provides a wealth of other statistics and details on its deal with domain registrar GoDaddy.

Dark Blue Sea, an Australian company, is well known to domain name investors for its Fabulous domain registrar and domain parking services.

As of the end of 2007, approximately 152,000 of the company’s domain names were profitable, meaning they eclipsed the $6.42 wholesale price of domain registration. The company estimates the average retail value of its domains to be $1,000, and also predicts that GoDaddy will help it sell 45,000 domains over the coming five years. Dark Blue Sea inked a partnership with GoDaddy earlier this year that involves a commission and options for 7% of Dark Blue Sea. The options vest according to the number of sales GoDaddy generates, which incentivizes the company to make sales. Overall, Dark Blue Sea expects $25 million to $30 million in profit from the GoDaddy deal over the next five years.

So if only a quarter of Dark Blue Sea’s domain names are profitable from pay-per-click revenue, where is the value? The company points to the retail market, where domain purchase prices have little connection to PPC multiples. For example, here are some domains the company has sold, the sales price, 12 months trailing revenue, and the implied revenue multiple:

MagazineReviews.com – $1,200 – $2.28 – 527x
CollegeInvestment.com – $2,650 – $32.08 – 83x
UraniumOxide.com – $830 – $.69 – 1197x
MexicanStocks.com – $800 – $.76 – 1058x
ArtBlankets.com – $1,200 – $.33 – 3663x

Another company that focuses on retail sales is NameMedia, which owns domain name aftermarket Afternic and sales platform BuyDomains. NameMedia says the “sweet spot” for small and medium business domain name sales is between $2,000 and $5,000.

Auction for pizza.com hits reserve, may be one of biggest domain name sales ever.

An auction for Pizza.com is attracting attention at Sedo. The domain has 63 bids and a current price of $2,505,000 USD as of the time of writing. That’s a whole lotta pizza — about a quarter million medium pepperoni pizzas. Although bids are still subject to verification, this sale could enliven the entire domain name market. The auction ends on April 3.

Other domains in the current Sedo Great Domains auction are also receiving bids, and many of them have met their reserves and still offer attractive investment opportunities.

Autos.net is just a dollar shy of $50,000 but the reserve of $50,000-$200,000 has not been met. My guess is the latest bidder is not interested in the domain, but realized he could place this bid without triggering the reserve. I personally don’t think this domain is worth near the high end of the reserve range, but perhaps $75,000-$100,000.

CoralReef.com is at $25,000, also below its reserve of under $50,000.

But enough about the domains that haven’t hit reserves. Here are domains that have hit reserves and are worth watching:

Odometer.com $4,998
iBanks.com $2,500
Bobblehead.com $2,050
n5.com $14,700

Company lets domain owners create stores for each of their domains.

Online advertising company Chitika, which has long been an alternative to Google Adsense, has launched a program for domain parking. This is good news for domain owners who have seen parking revenues drop due to changes at ad providers.

The Chitika program essentially lets you create an on-the-fly “store” at your domain using the company’s ShopLinc technology. You get paid based on clicks, but realize what is happening here: Chitika is making money when someone clicks and actually buys something. So in the long run your domains must convert for you to add value. This is where domain parking is heading in general. It will move from pay-per-click to pay-per-action, such as generating a lead or sale.

Here’s what your parked domains look like at Chitika:

Chitika is a good option if you have a consumer-focused domain name. For example, I’m going to try the service out with my domain PosterNook.com.

Look for other parking services like this to pop up. I also expect vertical (i.e. specific topic) domain parking companies to open soon.

Company to hike .com and .net prices for second year in a row.

Domain Name Wire has obtained a copy of communications sent to registrars today regarding VeriSign’s (NASDAQ: VRSN) next rate hike for .com and .net domain names. It is copied below.

___________________
March 27, 2008

VIA Email and Express Delivery

Re: Notice of Fee Change

To All Registrars,

VeriSign, Inc. and it’s wholly owned subsidiaries (”VNDS”) is hereby notifying all registrars of a fee change for .com and/or .net domain names effective October 1, 2008. In accordance with our contract, ICANN has already been notified. Details as follows:

1. VNDS’ fee for each annual increment of a new and renewal .com domain name registration and for each transfer of a .com domain name registration from one ICANN-accredited registrar to another will be US $6.86, exclusive of any ICANN Variable Registry-Level Fee (as defined in the .com Registry Agreement) or any other ICANN fee; and

2. VNDS’ fee for each annual increment of a new and renewal .net domain name registration and for each transfer of a .net domain name registration from one ICANN-accredited registrar to another will be US $4.23, exclusive of any ICANN Variable Registry-Level Fee (as defined in the .net Registry Agreement) or any other ICANN fee.

Except for the above-described fee changes, all other terms of the relevant agreements (.com and .net Registry Agreements and Registry-Registrar Agreements) remain unchanged.

Please contact Customer Affairs Office at cao@verisign-grs.com if you have specific questions regarding this notice.

Best regards,
PJ Bolanos
Vice President, Customer Support
VeriSign, Inc.
info@verisign-grs.com

The domain industry isn’t perfect, but you need not run for the hills.

I got a kick out of a message posted on Rick Schwartz’s blog after he announced he would stop blogging:

I hope you all realize what is going on here. The message should be loud and clear. Rick has been warning everybody all year to help him mount a defense against what is coming. Very few are paying attention, and very few are helping him build the fort to protect against the coming invaders. So, rather than waste is time blogging to people who don’t listen, he is leaving us to fend for ourselves and he will use his new found time to mount his own defense (probably by developing some of his domains and selling others). We have lost our visionary and a big industry voice.

WAKE UP PEOPLE! Rick stops blogging, Frank stops blogging, Yahoo kills arbitrage, Ask/Google, Snowe Bill.

The writing is on the wall.

Man, people sure do read into things! My guess is that Schwartz discovered how much work blogging is and decided he didn’t want to do it. It’s not worth his time. And Frank Schilling has a $20 million a year empire to manage, and blogging 24/7 doesn’t make sense. As a fellow writer, I’ve seen many blogs start and stop over the past several years.

So to look at a couple big domainers stop blogging and start crying that the world is ending is just silly.

Still others are concerned because Schwartz put one of his prized domains, Widgets.com, on eBay. I say “big deal”. Maybe he just wants some more cash, and widgets are hot right now. Putting it on eBay with a reserve may get the domain some press, which can be used to parlay the domain into a big sale to a web 2.0 company.

As for arbitrage, Yahoo killed arbitrage for Joe Domainer. But that wasn’t really about domaining, anyway. Registering domains for arbitrage doesn’t make you a domainer.

Google killing its search sub feed to Ask.com made sense, too. I know it’s tough to swallow, but there’s no reason Ask should have been allowed to take a Google search feed (not content) and syndicate it to every which domain parking company that didn’t have a direct feed with Google.

OK, so I sometimes get stuck in “the world’s ending” rut too. What’s really keeping me up at night? There are a few things, but it’s none of the above (even though the arbitrage thing really killed me given how many people I referred to a parking company that were doing arbitrage).

1. Snowe bill. It’s not because I think it will be passed in its current form (if it even gets out of committee), it’s because I think there will be a bill like this at least once a year. Don’t run for the hills over this bill; there will be many more like it.

2. Google allowing opt-out of domain parking. In theory this is fine, but because there are so many junk and fraudulant domain parkers out there, advertisers will opt-out in droves…hurting the honest ones. Look for Yahoo to follow shortly.

3. Parked-page blindness. Remember the term “banner blindness”? When banner advertising click-through rates dropped earlier this decade, it was blamed on people being “blind” to banner ads after seeing them so often. The same thing is starting to happen to text ads. Next, people will become familiar with parked domain pages and become blind to them. Is this what is driving down parking revenues? The best data point I have on parking revenue is from a domainer who owns tens of thousands of generic domains and says his revenue is off 10% from the start of the year. I blame the faltering economy, new Google and Yahoo guidelines, and parking page blindness.

4. Bottom feeders.

I recall a story about lottery winners. When asked what they would do if they lost their fortunes over night, they said they didn’t know. When entrepreneurs were asked the same question, they said they’d earn it all back.

Opportunists may never get it back. Entreprenuers will. So which one are you?