Why Marchex and WWM domain name acquisitions make sense for GoDaddy

Unique characteristics make these portfolios valuable to GoDaddy.

GoDaddy made the surprising announcement on Monday that it had purchased Michael Berkens’ domain name portfolio.

It was surprising because I had no idea Michael Berkens’ Worldwide Media (WWM) portfolio was for sale. But it’s unsurprising that GoDaddy was interested in this particular portfolio.

Like the portfolio GoDaddy acquired from Marchex earlier this year, the WWM portfolio has a lot of low-hanging fruit for GoDaddy because of the registrar’s business model compared to that of Berkens.

Here’s how GoDaddy does well with both of these deals:

There are valuable, liquid domain names in the portfolios: Marchex’s portfolio was dominated by 5 number domain names that are suddenly valuable. It also included a number of one-word .com domains that GoDaddy could move at reasonable prices in a hurry, thus showing instant results.

The same goes for WWM domains. Berkens had a lot of three letter domain names that GoDaddy can quickly turn into cash to boost this quarter’s revenue numbers.

The domains were never priced: GoDaddy can instantly improve sell-through rates for these domains by adding fixed prices that don’t need to be negotiated. Priced domains sell much faster than unpriced domains. I know Berkens had prices on some domains, but not many.

They weren’t distributed through Afternic: I’m still amazed that Marchex didn’t list its domains, even without a price, on Afternic and Sedo. This means few people knew the domains were actually for sale, making it fresh inventory that has never been marketed before through the broadest channel before. Compare this to the BuyDomains portfolio that Endurance purchased — it already had some of the widest possible exposure.

WWM listed some of its inventory on exchanges, but not much was priced. By pricing it and adding it to Afternic, it will suddenly show up in search results on dozens of domain name registrars.

This gives GoDaddy three wins. First, it can sell more domains and pocket the revenue. Second, its Afternic partners will get more exact-match hits and sell more domains, improving its partner relationships. Third, GoDaddy’s own customers will get the “This domain is available” result more often, enabling it to get closer to its goal of getting the right domain in front of the right customer at the right time.