Comments on: Sedo Paid $825,000 for RevenueDirect http://domainnamewire.com/2009/04/08/sedo-paid-825000-for-revenuedirect/ Domain Name Industry News and Views Sat, 26 May 2012 20:25:03 +0000 hourly 1 http://wordpress.org/?v=3.3.2 By: Brook http://domainnamewire.com/2009/04/08/sedo-paid-825000-for-revenuedirect/comment-page-1/#comment-476713 Brook Tue, 08 Sep 2009 21:11:51 +0000 http://domainnamewire.com/?p=5659#comment-476713 Matt, you are right. I am a London property valuer and long time domain investor. I have valued property in the hundreds of millions (£). I know numbers. However, more importantly in this instance, after working with big companies, I know how they report sales and how they "account" for them. Ask a top accountant what 1 + 1 = ? and the answer will be "whatever you want it to be, sir". $825,000 = FAIL Matt, you are right.

I am a London property valuer and long time domain investor. I have valued property in the hundreds of millions (£). I know numbers. However, more importantly in this instance, after working with big companies, I know how they report sales and how they “account” for them.

Ask a top accountant what 1 + 1 = ? and the answer will be “whatever you want it to be, sir”.

$825,000 = FAIL

]]> By: Matt http://domainnamewire.com/2009/04/08/sedo-paid-825000-for-revenuedirect/comment-page-1/#comment-424869 Matt Tue, 23 Jun 2009 21:40:40 +0000 http://domainnamewire.com/?p=5659#comment-424869 Their base rev share was 65% from what they have claimed. It just doesn't make sense. The deal is much bigger than the parking unit itself. And to be honest, who would sell 1x year or less, and who would not be willing to jump on a deal like this if they were the buyer? 1x year revenue, RD can lower their revenue share to 10%, and still bank on traffic that will be pointed to their nameservers for years! Just think about it. Their base rev share was 65% from what they have claimed.

It just doesn’t make sense. The deal is much bigger than the parking unit itself. And to be honest, who would sell 1x year or less, and who would not be willing to jump on a deal like this if they were the buyer? 1x year revenue, RD can lower their revenue share to 10%, and still bank on traffic that will be pointed to their nameservers for years!

Just think about it.

]]> By: Andrew Allemann http://domainnamewire.com/2009/04/08/sedo-paid-825000-for-revenuedirect/comment-page-1/#comment-424460 Andrew Allemann Mon, 22 Jun 2009 15:14:14 +0000 http://domainnamewire.com/?p=5659#comment-424460 Matt, I don't think RD was worth as much as other domain parking companies on a domain-by-domain basis. They probably had a much lower rev share than Sedo and I don't know if they had the search feed. So if you want to play with the numbers, say 300k domains x $15 per domain. That's $4.5M a year. Let's then assume they payout 70% of what they get, that leaves them with $1.35M a year in gross profit. Then consider the other costs and it quickly turns into a sub $1M a year business. Small parking companies can easily sell for less than 1x earnings right now. Matt, I don’t think RD was worth as much as other domain parking companies on a domain-by-domain basis. They probably had a much lower rev share than Sedo and I don’t know if they had the search feed. So if you want to play with the numbers, say 300k domains x $15 per domain. That’s $4.5M a year. Let’s then assume they payout 70% of what they get, that leaves them with $1.35M a year in gross profit. Then consider the other costs and it quickly turns into a sub $1M a year business. Small parking companies can easily sell for less than 1x earnings right now.

]]> By: Matt http://domainnamewire.com/2009/04/08/sedo-paid-825000-for-revenuedirect/comment-page-1/#comment-424314 Matt Mon, 22 Jun 2009 05:13:36 +0000 http://domainnamewire.com/?p=5659#comment-424314 If you really think that the domain industry is just worth a few hundred grand, or even a few million dollars based on the domains parked in comparison, then I have to tell you that is not the case. The domain parking industry is worth well over a billion dollars, and RevenueDirect was one of the bigger domain parking services. I know you post good factual information, but there is something completely wrong with this sale. Unless Dotster had some real issues with fraud or something and lost a feed, then this is very unlikely in my opinion. We have our own views on this. I think my calculations are pretty good and I just think that RD/Sedo know something we do not know, and will never know. Let's leave it at that. If you really think that the domain industry is just worth a few hundred grand, or even a few million dollars based on the domains parked in comparison, then I have to tell you that is not the case. The domain parking industry is worth well over a billion dollars, and RevenueDirect was one of the bigger domain parking services.

I know you post good factual information, but there is something completely wrong with this sale. Unless Dotster had some real issues with fraud or something and lost a feed, then this is very unlikely in my opinion.

We have our own views on this. I think my calculations are pretty good and I just think that RD/Sedo know something we do not know, and will never know.

Let’s leave it at that.

]]> By: Matt http://domainnamewire.com/2009/04/08/sedo-paid-825000-for-revenuedirect/comment-page-1/#comment-424313 Matt Mon, 22 Jun 2009 05:08:14 +0000 http://domainnamewire.com/?p=5659#comment-424313 Andrew, not trying to egg you. I know you are posting the facts, but I am sharing with you my opinion based on my industry knowledge. I am willing to argue this if you are willing to compare apples to apples. I am comparing RD nameserver domain resolution to Sedo nameserver domains resolution. Both services offered URL forwarding. Apples to apples: Approx 2 million domains resolving at Sedo vs nearly 300,000 resolving at RevenueDirect. You are right $77 million includes Sedo's domain marketplace commission. Even though RD acquisition includes RD domains placed for sale on Sedo (which is apples to apples), I'll give you the benefit of a doubt on this one. You estimated 10 million to be from sale commissions, so let's say 66 million $ from domain parking revenue. $66 million / 2m domains = $33 per domain $33 per domain * 300,000 = $9.9 million per year in domain parking revenue alone. Not to mention the rest of the deal, which seems pretty huge as well. You're right, 800k, maybe even a few hundred grand less seems like the reasonable sale price. NOT. Andrew, not trying to egg you. I know you are posting the facts, but I am sharing with you my opinion based on my industry knowledge.

I am willing to argue this if you are willing to compare apples to apples. I am comparing RD nameserver domain resolution to Sedo nameserver domains resolution. Both services offered URL forwarding.

Apples to apples: Approx 2 million domains resolving at Sedo vs nearly 300,000 resolving at RevenueDirect.

You are right $77 million includes Sedo’s domain marketplace commission. Even though RD acquisition includes RD domains placed for sale on Sedo (which is apples to apples), I’ll give you the benefit of a doubt on this one. You estimated 10 million to be from sale commissions, so let’s say 66 million $ from domain parking revenue.

$66 million / 2m domains = $33 per domain

$33 per domain * 300,000 = $9.9 million per year in domain parking revenue alone.

Not to mention the rest of the deal, which seems pretty huge as well.

You’re right, 800k, maybe even a few hundred grand less seems like the reasonable sale price. NOT.

]]> By: Andrew Allemann http://domainnamewire.com/2009/04/08/sedo-paid-825000-for-revenuedirect/comment-page-1/#comment-424124 Andrew Allemann Sun, 21 Jun 2009 15:07:59 +0000 http://domainnamewire.com/?p=5659#comment-424124 Matt, I don't know if you're just trying to egg on a resposne or what. I've talked to many people familiar with the deal. This was the sale price. A few people I talked to think it was overpriced by a couple hundred grand. Not all of Dotster's domains are parked. A company wouldn't lie in its regulatory filings. Matt, I don’t know if you’re just trying to egg on a resposne or what. I’ve talked to many people familiar with the deal. This was the sale price. A few people I talked to think it was overpriced by a couple hundred grand. Not all of Dotster’s domains are parked.

A company wouldn’t lie in its regulatory filings.

]]> By: Andrew Allemann http://domainnamewire.com/2009/04/08/sedo-paid-825000-for-revenuedirect/comment-page-1/#comment-424122 Andrew Allemann Sun, 21 Jun 2009 15:06:43 +0000 http://domainnamewire.com/?p=5659#comment-424122 Dude, Matt, just go look at the regulatory filing. They paid $825k. If you want to argue math, I can assure you there are more than 1.9M domains parked at Sedo (nameservers aren't the only way domains are parked) and that $77M wasn't all parking. Dude, Matt, just go look at the regulatory filing. They paid $825k.

If you want to argue math, I can assure you there are more than 1.9M domains parked at Sedo (nameservers aren’t the only way domains are parked) and that $77M wasn’t all parking.

]]>