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Silicon Alley Insider Values GoDaddy at $1.4 Billion, Oversee.net at $1 Billion

A number of domain name companies land on valuable start up lists. But SAI didn’t do its homework.

Silicon Alley Insider has released its latest list of the world’s most valuable startups, which includes a number of domain name companies. But I question the validity of some of its assumptions because of some glaring errors, such as saying that Oversee.net hasn’t taken any outside funding.

The top domain name company on the list is GoDaddy at #9. The valuation is based on estimated 2009 revenue of $700 million with a two times revenue multiple. It’s a very basic valuation technique, but it’s hard to peg revenue and valuation number on private companies. By comparison, Inc. magazine shows GoDaddy’s 2008 revenue at about $500 million.

Coming in right behind GoDaddy is Demand Media and its highly automated content generating system at $1.3 billion. Demand Media also owns domain name registrar eNom. SAI says it has confirmed that about 10% of Demand Media’s revenue comes from domain parking.

Also at a $1.3 billion valuation is Quinstreet, the lead gen company that just bought insurance web site Insure.com for $16 million.

Oversee.net, parent company of Moniker, DomainSponsor, and SnapNames, comes in at #16 with a $1 billion valuation. SAI estimates Oversee will bring in $200 million in revenue this year. But it also says that the company hasn’t taken any outside funding. It has. So I question SAI’s analysis.

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  1. Tom says

    I agree with you Andrew that they didn’t do their homework: Almost all those valuations are total BS, not just for Oversee.net. Using revenue multiples across the board, regardless of the company type is wrong.

    And using revenue multiples 5-10x higher than what they should be is just plain stupid. SAI should check any M&A database out there.

    There might be high-growth outliers (like Twitter or Facebook), but they are very few.

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