eCommerce Times has a good article analyzing eNom’s recent purchase.
The two-part story debuted last week but the second half was just published today. Despite having some inaccuracies (such as saying Business.com is the highest-ever reported domain name sale) the articles do a good job of surveying the domain name landscape and how this acquisition can shake up the industry.
Author Anthony Mitchell analyzes why BulkRegister fell on hard times and became ripe for acquisition:
In a market where most registrars have positioned themselves as full-service hosting firms, BulkRegister kept focusing on its original business model. The competitive advantage that it enjoyed by undercutting prices during its growth spurt in 2000 has been neutralized by the evolving business practices of its competitors.
Unable to respond in a timely or effective manner with new feature offerings that could cross subsidize and enhance its core registration services, BulkRegister saw its customer base stagnate. This was compounded by poor client communications practices and difficulties in successfully launching new service offerings, especially its private registration service…
In an effort to control costs, BulkRegister channeled customer support contacts through an e-mail and bulletin board system that it calls Support Trak. Although it maintained its customer support activities within the U.S., it was not always able to maintain quality assurance or consistency. By shunning voice contacts, BulkRegister gave up opportunities for using voice conversations to resolve customer misunderstandings, retain important clients and upsell additional products and services.
Mitchell identifies four advantages to eNom by acquiring BulkRegister:
1. Placeholder (parking) ad revenue
2. Access to portfolios
3. Access to expired domains
4. Cheap acquisition price
The latter isn’t really a long term competitive advantage but merely speculation that eNom got a good price on the acquisition.