Interview: Marchex CEO Russell Horowitz on Archeo

Marchex will finally focus on its domain name business.

Yesterday Marchex announced it was splitting the company in two, forming a new domain-centric business called Archeo.

Archeo will manage a portfolio of over 200,000 domain names, many of which were acquired when Marchex bought Yun Ye’s domain portfolio for $164 million back in 2005.

Despite its big domain purchase, the company has largely neglected its domain business until now.

Yesterday I talked with Marchex CEO Russell Horowitz to understand more about Archeo.

Horowitz said the impetus for splitting off the company is that its domain business has been neglected and undervalued.

“The analogy I give is it’s kind of like an oil field under the desert,” said Horowitz.

“You look at it and know there’s value there, and the time comes where it’s like, you know what, we’ve got to get the people and equipment to build wells and get it out of the ground and do it in a way that creates a valuable recurring business,” he said.

Marchex neglected its domain portfolio because it had other big opportunities that it believed were more pressing.

“At the time we acquired the domains and had plans in terms of how we would create the business…as a company we were doing like 5 things,” said Horowitz. “Our ambitions exceeded our capacity.”

Horowitz said the company decided to invest in call advertising and mobile because that opportunity had to be addressed immediately. Domains could wait.

He describes the company’s domain portfolio as an “idiot proof asset” that would retain its value even if the company didn’t invest in it right away. He said time has proven that belief correct.

To date, the company hasn’t marketed any of its domains for sale. At first it ignored sales inquiries. Then it assigned one person to respond to them, but that wasn’t even his full time job.

Now the company will do more than reactively negotiate domain sales. It plans to start marketing its domains, including some with “buy now” prices. It may develop some of its own sales tools but will also likely work with third party marketplaces, he said.

Archeo will be unlike any other domain company out there. It’s as if a domain portfolio company was founded nearly a decade ago and then frozen in time. Now it’s starting again, and there’s certainly a lot of low hanging fruit.

To get the oil out of the ground, the company is looking for highly entrepreneurial people. It will certainly find some of those in the domain industry.

“The domain industry has a lot of entrepreneurial and creative people,” Horowitz said.

(If you’re interested in working for Archeo, you may contact Karmen Chen at kchen -at- marchex.com.)

Archeo is a welcome development in the domain industry — and I’m sure we’ll be hearing a lot more about it in the years to come.