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  • Breaking: GoDaddy acquires Afternic from NameMedia

    1. BY - Sep 19, 2013
    2. Domain Sales
    3. 35 Comments

    Acquisition will make it easier for customers to buy domain names that are already registered.

    GoDaddy acquires AfternicGoDaddy has acquired domain name sales platform Afternic from NameMedia in a move that will make it easier for people to buy domain names that are already registered.

    The acquisition also includes NameMedia’s domain name parking platform SmartName. The BuyDomains.com site and NameMedia’s domain name portfolio are not part of the acquisition.

    A simpler domain name purchase experience

    GoDaddy’s acquisition should create a better experience for customers who want to buy a domain name that is already registered by someone else.

    “We’re making [it] really, really simple for anyone who wants to find a great domain associated with their venture, regardless of whether it’s in the aftermarket or something that’s never been claimed before,” said GoDaddy CEO Blake Irving.

    Many people complain that “all the good domains are registered already” when they search for a domain. This frustration is exacerbated by a complicated process for purchasing an existing domain name from its owner.

    By integrating domain name aftermarket Afternic, millions of already registered domain names will be available for GoDaddy customers to purchase much the same way they register an unclaimed domain name today.

    Big strides in the domain aftermarket

    In recent years, Afternic and competitor Sedo have made the process of buying an existing domain name easier than in the past. In addition to aggregating listings of domains for sale, they’ve also struck partnerships with domain registrars so that customers can instantly buy these domains.

    GoDaddy already has partnerships with Afternic and Sedo to show domain names that are available for sale, but customers cannot purchase them without jumping through a couple hoops. The partnerships with GoDaddy, unlike with some other registrars, do not enable the instant transfer of domain names.

    Aftermarket domainsGoDaddy has its own competing service, called Premium Listings, that allows for the instant purchase and transfer of already registered domain names, but it is limited to a small subset of domains registered at GoDaddy.

    With the acquisition, the volume of names available for instant purchase and transfer at GoDaddy and other domain registrars in the Afternic network will increase. Afternic has nearly six million domains listed for sale, and about half of them are available for instant purchase and transfer. GoDaddy has a further one million domains in its Premium Listings program, which will be rolled into Afternic.

    The Afternic platform sells about $1 million of domains in a typical week, with many of them sold to end users looking to acquire a name for their new business or upgrade to a better domain.

    Benefits for domainers

    The acquisition will provide advantages to aftermarket domain name sellers.

    With GoDaddy’s Premium Listings rolled into Afternic, there will now be one common platform for listing domains for sale on GoDaddy and the more than 100 partner sites in Afternic’s Premium distribution network.

    “The concept of Afternic has been ‘list once, sell everywhere’,” said GoDaddy Director of Product Development Paul Nicks. “That’s really going to come to fruition now. You don’t have to list your domains on GoDaddy Premium listings, Afternic, and all these various spots. You’ll have one control panel you go to and manage all your listings.”

    This also means that domain name owners no longer need to choose between registering their domains at GoDaddy to take advantage of Premium Listings or at another registrar to list them on Afternic.

    With Afternic’s “fast transfer” system for instant domain transfer fully integrated, and customers able to purchase existing domain names the same way they register an available domain name today, there should be more sales compared to GoDaddy’s existing partnership integration with Afternic.

    “We see a significant increase in sales velocity with fast transfer,” said Bob Mountain, SVP of Business Development at NameMedia, who will now be Chief Revenue Officer at Afternic.

    Compared to the existing Afternic implementation with GoDaddy, Mountain believes there will be “a good double digit increase” in sales velocity.

    Mountain also expects a significant increase in the number of domains listed for sale through the platform. In the future, domain owners will be able to list and manage their domains for sale directly through their registrar interface rather than logging in to Afternic.com. This should result in more people listing their domains for sale.

    The acquisition will mean domain sellers pay lower commissions, too. Afternic’s commission is 20%, which is lower than the 30% GoDaddy charges for Premium Listings. Irving said it’s not the company’s intention to change commission rates from the current 20%.

    GoDaddy will continue to operate the GoDaddy Auctions site for expired domain name inventory, as Afternic does not have real-time bidding capabilities. Afternic will be a separate brand.

    In addition to the aftermarket ramifications of the deal, the acquisition of SmartName means that GoDaddy now has a domainer-focused parking platform. Its own parking program, CashParking, has mostly been targeted to small domain name owners.

    Competitive ramifications

    Of course, the acquisition also removes one key domain aftermarket competitor from the business. When it comes to selling aftermarket domains through domain registrars, it’s now just a GoDaddy and Sedo world.

    Domainers who list their domains for sale with Afternic are sure to keep a close eye on commissions.

    The deal will also put pressure on publicly traded Sedo, which is already reeling from a declining domain parking business.

    Sedo’s existing partnership to list domains at GoDaddy will continue, although Sedo’s domain listings will only show up when the same domain isn’t also listed with Afternic. Sedo has about 17 million domains listed for sale and generally sells between $1 million and $1.5 million of domains each week across its marketplace.

    Sedo continues to dominate the market for country code and non-English domain names, although Afternic is working to add more ccTLD options and build its registrar partnerships in Asia and Europe.

    Adding GoDaddy’s reach to Afternic will additionally put competitive pressure on Sedo’s new TLD offerings, which Sedo is counting on as a revenue source in the face of market pressures elsewhere.

    New TLDs also play a role

    The timing of the acquisition is convenient for the coming introduction of new top level domain names.

    Afternic has been working with new top level domain applicants to identify their “premium” domain names. It will then list them for sale on its network once the TLDs launch.

    That means that new TLD operators who partner with Afternic will have greater reach for their reserved domain names now that GoDaddy owns the company.

    Afternic’s new TLD partnership with auction platform NameJet to offer sunrise and landrush auction services remains intact.

    NameMedia investors get an exit

    The sale is an exit of sorts for private equity-backed NameMedia. The company filed to go public in 2008, but later withdrew its S-1.

    Originally created by the acquisition of Mike Mann’s BuyDomains (RareNames) for $72.5 million plus stock, the company went on to acquire a number of domain name businesses.

    It bought domain parking company GoldKey for $3.0 million and SmartName for $16.5 million in 2006.

    NameMediaAlso in 2006, NameMedia paid just $4.4 million to acquire Afternic — but the domain sales platform back then was very different from what it is now. One of the oldest domain marketplaces, Afternic at the time was primarily a place where domain name professionals transacted. The typical end user domain buyer was not aware of its existence.

    That changed when the company started distributing its listings to more websites and registrar partners. More importantly, Afternic began integrating its fast transfer service with domain name registrars so they could sell aftermarket domain names in much the same way that customers register an available domain name. Weekly sales have doubled since 2009.

    Much of the growth in registrar partners and fast transfer was spearheaded by Bob Mountain, who joined the company in 2009. 18 of the top 20 domain registrars have inked deals with Afternic, some on an exclusive basis.

    24 Afternic employees will move to GoDaddy with the transaction, remaining in Boston.

    NameMedia’s large domain name portfolio and consumer sales site BuyDomains are not part of the sale. By selling off its domainer-focused assets, the company is now basically a large domain portfolio holder.

    Financial terms for the deal were not disclosed.

35 Comments
  • Looks like Frank has officially shaken up the landscape with DNS. Glad to see it because it’s the right model with good actors behind it.

    But don’t like to see GD get even more market share over the industry (in aggregate).

  • Has GoDaddy mentioned or communicated if one who lists on their platform will get access to the multiple listing sites that Afternic offers? Or Will one continue to have to list names at Afternic in order to get names placed on multiple sites? Thanks

    • John, GoDaddy’s Premium Listings will be rolled into Afternic. Domains listed on the platform will be syndicated across the entire Afternic network. I’m sure there will be some transition process for domains on Premium Listings in the future.

  • reallifedrama says:

    September 19, 2013 at 8:37 am

    Bringing mainstream closer to the domain aftermarket is a good thing.

  • This is a brilliant move by two of the top companies in the domain space because it will help further close the gap between premium domain demand and supply, which is a victory for us all. The secondary market is clunky at best; this helps remove a lot of the inefficiency. Bravo!

  • I think that all of us in the industry that sell domains should be happy about this acquisition by Go Daddy. It doesn’t matter if you were using Afternic for domain sales, Go Daddy for domains sales, or both, this should increase your overall revenue. If you weren’t using either of them, now is a good time to take a look at moving over.

    I wonder how they will handle those of us who have our domains listed at both Afternic and on Go Daddy, but at different prices? I am sure there will be some issues to work out over the next couple of weeks, but well worth it.

    Congrats to Paul and Bob for making this happen!

    • Hmm…I don’t think you could have a domain at GoDaddy that is listed with Afternic’s extended network. But I guess you could have priced it at both locations. Definitely a lot of integration work ahead.

      • I don’t think people who hold names at GoDaddy are able to use Afternic’s Premium Promotions (20%) currently. Their page doesn’t list them as a registrar: http://www.afternic.com/domain-reseller-network#1 – Does anyone know if that is right? thanks

        • John, that’s correct. GoDaddy hadn’t opted in to that. But it’s possible that someone listed a domain with Afternic’s regular promotion level and set a fixed price.

          • Andrew, that’s right. I believe quite a few people that hold their domains at Go Daddy have also listed at Afternic under their regular promotion level. I know that I do. Will be interesting to see how they roll out all of the integration over the next few weeks.

          • I’ve always been scared to list with buy now prices in two places. Especially if one of them isn’t automated to remove the listing if the other sells. So I just have a fixed price at Afternic or GoDaddy…now I won’t have to choose.

  • …Many people complain that “all the good domains are registered already” when they search for a domain…

    The Year 2013 called and said “it’s time to quit whining and not be a complete ignoramus.”

  • Great news! I have been looking forward to see GoDaddy gets in the Fast Transfer game. Now it’s even better with the Afternic acquisition.

    The question now, will GoDaddy keep on his 30% fees for Premium Listings? Which will be a big disappointment.

    I have my domains on both Afternic and GoDaddy Premium Listings but with a little higher prices on GoDaddy to cover the fees difference. Will see how GoDaddy will handle this.

    • Sameh, I asked both Paul Nicks and Blake Irving this question. They can’t promise that rates won’t change, but the idea is to keep Afternic’s rates 20%. Since Premium Listings will be rolled in to that, we’re essentially looking at a lower commission.

      With Premium Domains I always price my domains a little higher to cover the extra 10%…but it’s still painful :)

  • They should just have a simple 10% Commission to list across all platforms. If someone wants to promote in someway maybe charge 20%. They’ll have more transactions occurring. Real Estate industry has various software programs that list on multiple sites for free that work great and lots of people including brokers use.

  • It’s a sign the domain industry is maturing. Eventually I’d like to see just one, single global market place serviced by a number of brokerage firms. Buying and transferring domain names should be very simple for consumers.

  • I am not sure how this plays out in the long run. The idea of 20% commission does not thrill me nor the 30%. I was in the process of taking my Godaddy premium listings and moving them to Sedo and Afternic where the commision is 15% and now this.

    I may have to look elsewhere or continue selling them myself. I am trying out domainnamesales but I have not quite figured it out yet but their 12.5% commision is not too much to ask.

    20% is too much to give away as far as I am concerned and then they jacked it up to 30%. That did it for me.

    • The 15% commission on Sedo and Afternic only applies in limited situations. On Sedo it’s only if the sale takes place on Sedo (not a partner site) and on Afternic it’s only on a limited number (32) of partner sites (and that doesn’t include Fast Transfer). The relatively higher commissions are because they have to pay part of the commission to the partner site.

      Although DomainNameSales.com charges only 12.5%, it doesn’t have any distribution. Basically anyone who makes an offer through the service found it through your parked domain. So you’re really comparing a 12.5% commission to a 15% commission at the competitors. Both Sedo and Afternic also offer rebates on commissions in some circumstances if your domain is parked with them.

      • I am well of scenarios you discussed but I chose to eschew them. The limited situations worked well enough for me. 20% commission is too much to ask and 30% is downright robbery, and I don’t want to be robbed. Godaddy with its reach could have charged a decent percentage, 10% to 15% and made up the difference in volume but they chose to go a different route except for the Godaddy Auctions.

        Yes, you can add the percentage over your asking price but that makes it a tougher sale at a higher price than at a lower price and lower commission.

        Take a look at many auction houses, and not necessarily domain names, and see how they are priced. It will be only a matter of time before experienced auction houses and auctioneers enter this space and we will see then how 20% and 30% pan out. Heck, if eBay had gotten its act right with domain name auctions, it could given the existing domain auction outfits a run for their money.

        • You see, I think you’re comparing Apples and Oranges. There’s a difference between listing something for auction compared to presenting something for sale to someone at the exact moment they’re looking for that exact (and unique) product.

          • Not really. High commission, higher price disrupts and distorts your return ratio and shelf life. In simple terms, the higher the price as a result of high commision, the longer it takes to sell your name where as the lower the price given the lower commission, the quicker it is to sell which will help your invntory turnover ratio.

            If domainers can sell their names quicker given alower commission, lower price structure, they are more likely to buy more and often to replace their inventory regardless of whether it is through auction or buy now. The high commission, higher price puts a damper on the lure of instant quick sell. Granted many people have different reasons for opting for the auction platform as opposed to instant listing. But onething is clear, the American retail juggernaut is built on quick inventory turns and the essence of right pricing.

          • Right, but I’m sure Afternic has done the math and figured out where the maximum point is for them. Domains have a very low price elasticity of demand. If they lowered the commission to 1%, would they make up in sales what they lose in commission? No, not a chance.

        • Of course not, the 1% is an extreme just as the 30% is approaching the extreme the other way. There is an inherent value in finding the optimal point where the seller and the brokerage both benefit. Presently that equilibrium price or commission rate is not even close but more of an illusion as expressed by many sellers whether here or elsewhere. Many in the industry seem to point to 10% to 15% as an acceptable range. I am sure Godaddy understands that and it is left to be seen what they do within the next few weeks or months as they ramp up and leverage what they now possess in Afternic.

          At the end of the day, the brokerage house can charge 30 or 40% all they want, and the sellers can raise the price all they want to reflect that expense, but the price has to be what the buyer is willing and able to pay. You can price yourself out of the market just like in realestate.

          • The only people who have the data necessary to figure this out would be the likes of Afternic, GoDaddy, Sedo, and just a handful of the very large domain portfolio holders. Just “many in the industry seem to point to 10% or 15% as an acceptable range” doesn’t mean much.

  • Many of us have a valid excuse why we missed an early wave of opportunity to invest – or invest more heavily – in Internet domain names. We may have had no idea what was happening and what we were missing out on, or we may have had a clue but could not quite grasp how to get a handle on it.

  • One other comment: I hope GD brings back stats on Afternic, specifically offer views (Sedo still has it). It was available before the last facelift which gutted the usability/functionality of the site imho.

    This was very useful as a data point in analyzing a domain for a variety of obvious reasons, but especially with Afternic/BD because they attract a lot of end-users. If more than a few folks are clicking the offer page over a year timeframe, then there’s definitely value to the domain.

    • Is the offer views important to you as a seller to understand the value of your domains, or do you think it’s important because buyers may see that a lot of people are interested in the domain?

      • Andrew, just meant from seller’s perspective. I was being harsh on their site design because it seemed to favor flashiness over functionality. If the same functionality remained but just operated in a more difficult fashion it wouldn’t be too big of a deal.

        I’m not sure whether offer views is of much use to buyers as it could be gamed so easily by the seller (i.e. run up the counts via different IPs to look more “valuable”). But haven’t thought it through; would be interested hear if anyone thinks it’s a benefit to providing that stat to buyers.

        • I ask because perhaps this is something that domain owners could view in their dashboard but not be shown to the public. GoDaddy already shows the number of times a whois record for your domains have been viewed…maybe this is something they can add to a future iteration.

          • Best thing GoDaddy can do here is have the commission be 10% and for the name to be listed on as many platforms as possible, do fast transfers of sales & educate the public about being able to buy names in the secondary marketplace. Their revenues will explode. As it is I think the sales at Afternic go up substantially.

          • Andrew, it existed in the old design but was removed as a viewable column in the control panel domains view (someone correct me if I’m just blind). Sedo still has it in their sales settings view, and as you noted GD has whois views.

            It’s impossible to say if it directly correlates with sales potential, and it’s especially skewed for average-quality portfolios like mine. But I did notice that my mid-$xxxx sales almost consistently had a few views/month before they finally sold. The deadbeats averaged almost zero. Hence it’s a data point that was interesting if nothing else.

  • @Kassey: A sign the the domain industry is maturing would be to see it become rare that someone walks away from a contract to purchase a domain name with absolutely-nothing-happening-to-them.

    This is a black eye on the domain name industry. Its 2013, this should not be happening anymore. It doesnt seem that any of these brokerage houses care enough to stop it.

    People walk away from real-estate purchases but they pay dearly to do so….

  • Jesse Westphal says:

    April 30, 2014 at 9:35 am

    I have dealt with Name Media in the past and love their process. I hope Go Daddy keeps this same simple process.

  • I think has turned out ok. Also, Name.com was bought out Demand Media and no hiccup over there either. Sometimes consolidation can be good and glad this worked out.

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