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Sedo Acquires RevenueDirect and Why It Makes Sense

Sedo has acquired RevenueDirect, Dotster’s domain name parking service.

Sedo has acquired domain name parking company RevenueDirect.

For established domain parking companies, acquiring another domain parking company usually doesn’t make sense. Parking companies rarely have long term contracts with customers, so the acquirer risks seeing acquired customers leaving the ship after a takeover. But this acquisition makes sense for a couple reasons:

U.S. Dominance: For a long time, Sedo has been known as the dominant domain parking company and Google partner outside the United States, while DomainSponsor has the Google lock inside the United States. With this purchase Sedo will bolster its position in the United States.

Higher Revenue Share: By acquiring more customers, Sedo can increase its revenue share rate with Google. This will put it in a position to offer more to domainers, improving its overall positioning. Further, Google domain parking contracts include tiers with different revenue share rates. This acquisition may push it into a higher tier.

Registrar Affiliation: Call it a bonus, but Sedo’s domain parking purchase comes with a new deal with the affiliated registrar, Dotster. It will send Dotster customers to Sedo for both domain parking and domain purchases.

According to RegistrarStats, Dotster is the 15th largest domain name registrar with over 1 million domains under management. The domain server ns1.revenuedirect.com has over 225,000 domains according to DomainTools.

This may not be Sedo’s last domain parking company acquisition…

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  1. Domainer says

    Dotster is a registrar that has seen its best days a while ago.
    I doubt domainers are moving domains INTO the registrar. Most likely they are moving them out.
    What do they have to offer other than a connection to the registry?

    And, I would speculate that many of the domains using RevenueDirect are owned by the registrar – Dotster.

    As you mentioned, the ability of domainers to move between ppc companies is no more than a couple keystrokes.
    So, what did Dotster really sell?

    I believe Dotster/RevenueDirect is in the “harvesting” segment of their business cycle.
    Selling off their crops.

    If domainers have been watching, they will notice that Dotster has been regularly selling off domains they had inventoried for the past 5 years.

    It appears they are slowly conventing their assets into cash.

  2. Johnny says

    Sedo is a Google feed, but RevenueDirect is a Yahoo feed….right?

    I can’t see Sedo doing anything good for anyone with this purchase. They have always paid out poorly even though they are in a position to pay better than other parking companies.
    .

  3. Jimmy says

    Actually I think Revenue Direct had lost their Google feed that’s why they were for sale. The only thing that would have been worth it was if the feed would have been transferrable, but it wasn’t.

    I do wish Sedo luck on this one and hopefully they didn’t pay too much.

  4. Andrew Allemann says

    @ Jimmy – If that happened, it would have had to have been in the last month or so. And I have good reason to believe they were still a Google partner at the time of acquisition.

  5. Don says

    I predict more consolidations! parking co are squeezed between google turning on the heat on one side, and a smaller customer base on the other end. Only the strongest will survive.

  6. wannadevelop.com says

    Dotster is a has-been and so is RevenueDirect.

    I was on board when they first launched and worked closely with them.. I put forward a lot of feedback but it never got implemented.

    The revenue shares by the way were never anything to brag about either.

    I’d be surprised if Sedo paid more then $1m for this acquisition.

    I just don’t see much value from this as a whole.

    No technology.. No real customer base.

    I bet you Revenue Direct approached Sedo too.

    Mike

  7. Don says

    That seems really low though. Dotster is still a top 10 or so registrar, Their expiring domains alone is probably worth more than that.

  8. Greg says

    Bonehead move by Sedo. They (edit) the last remaining transparent Google feed parking company. Now I’m forced on to the inferior Sedo platform. All the customization on RD, gone. Drastic drop in revenue. Most if not all RD customers will abandon ship. They paid $825K for a superior system they aren’t using and a disappearing customer base.

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