Quinstreet is clear about what it acquired when it bought Insurance.com. It wasn’t just a domain name.
I just finished listening to Quinstreet’s investor conference call from last night, in which the company reported it paid $35.6 million in total consideration for Insurance.com.
Now the big question, as others are debating right now: How much of this was for the domain name? Was this a domain name purchase at $35.6 million?
The answer to the second question is pretty clear: no. The value wasn’t just in the domain name. On the call, Quinstreet repeatedly referred to the acquisition as a “media asset”, and that was “a web site, media, and technology assets”.
It’s important to understand the history of Insurance.com. It was previously run as an insurance agency, actually selling some policies direct to customers. Quinstreet didn’t buy the agency. Contrary to earlier reports, Quinstreet didn’t layoff anyone because of the acquisition; the report of layoffs was from the owner of the agency, which Quinstreet did not acquire.
Quinstreet usually doesn’t acquire “revenue” in acquisitions. It says it “buys media and then turns it into revenue”. The average cash-on-cash return for acquisitions is 35% at the company. The insurance.com transaction would return 20%-30% on the company’s conservative acquisition model, although Quinstreet says it’s blowing through that number. The acquisition model assumed the loss of a lot of affiliate revenue and leads, but very little of that has been lost.
In fact, in response to an analyst question “aren’t you just buying the domain name”, Quinstreet responded “this is not a domain name”. It wants to build on the existing content and platform.
Bottom line: Quinstreet bought a web site that has a killer domain name associated with it. That killer domain name is one of the reasons Insurance.com is what it is today. But if another site got the same amount and type of traffic, Quinstreet probably would have paid the same thing.
premium domains says
I agree Andrew. It doesn’t count as a domain sale.
In a parallel universe it could of sold for that price for just the domain, becuase of potent traffic and the killer domain, but it didn’t.
They bought the success and goodwill of the site too.
Having said all that it’s worth far more as just a domain, than sex.com ever was. The most overrated domain ever imho
sex.com was worth a lot once, then brandables came in
anyway, good news story for domain sales/industry
I looked at archive.org and there was a website with some content on it.
David J Castello says
I don’t believe it would have been the same price with another name. They are trying to justify as much of the sale as possible outside of the domain name, but they know the name alone is a premium asset.
M. Menius says
Just like Homes.com, Hotels.com, Apartments.com, Cars.com, Business.com, the purity of the domain name is automatically associated with credibility. It’s the most solid foundation available on which to build a real business.
Jeff Edelman says
There’s no question that this wasn’t just a pure domain name sale. The domain name itself is obviously not worth 36 million dollars. It is impossible to put an exact number on the value of the domain. But the domain name was the secure foundation upon which this business was built. To “brand” the same business under another name and build it up to a point that it was worth 36 million dollars would have cost them millions – many millions. This was a great purchase for QuinStreet, and the domain is a huge asset for them as they go forward.
Bob Cosaman says
I believe that domain is worth $35million and maybe even $50million. Just because your looking at the nearest comparable which would be Insure.com or Fund.com which both sold for over 10million but under 20million doesn’t mean that is what this domain name is worth. Get used to the domain name market going towards the $20million to $50million dollar A-list domain names, because the companies who buy them will make a lot more then $50million using that domain name.
The Big Cheese says
We have recently (one week ago) turned down an offer of $15,000 for Insurance.AC – the insurance space is red-hot at the moment…not a time to sell.
The Big Cheese says
Acquired Insurance.io today – $99 🙂
If Insurance.com sold for $35-million, why does Estibot value it at over $260-million???? I’ve never seen an Estibot valuation so high over a published sales price. Crazy…