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GoDaddy paid $50 million for two latest domain portfolio acquisitions

Company picked up about 300,000 domain names for $50 million.

Last month GoDaddy (NYSE:GDDY) bought two domain name portfolios: Donuts’ portfolio of about 200,000 domains and a portfolio linked to Kevin Ham that had about 100,000 domain names.

The company disclosed in its latest 10-Q filing with the SEC that it paid $50 million combined for these domains:

In October 2017, we completed two domain portfolio acquisitions for aggregate cash consideration of $50.0 million, including $4.2 million payable upon expiration of the contractual holdback periods.

That comes out to about $167 per domain name.

The filing does not break down how much was paid for each portfolio, nor do I expect any future filings to contain this information.

For comparison purposes, the company paid $35.5 million for Michael Berkens’ portfolio.

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  1. Tony says

    Great deal for Godaddy. The Ham and Donuts portfolios are worth much more than $50M relative to Berkens getting $35M.

  2. Ron says

    It wasn’t Donuts portfolio so much, moreso Rightsides Name.com goodies I would believe, all donuts would have are factory made GTLD’s, which you see sedo sells 1 a week by their lists.

    Kevin Hamm would have sold his B grade, and lower stuff, just some of Kevin Hamm’s best domains are worth that sum alone. He would have kept the premium to move forward, and sold the rest.

    Kevin, has been at this for like 20 years, that is a long time in this business, and he has done very well. Owning names like mark.com etc… he just needs a few thousands, and sell 3-4 a year, and he is good for life.

    • Andrew Allemann says

      I’m not entirely sure which of Kevin’s names were part of the deal. I think he has various ventures with different partners. But I’ve seen some nice domains transfer as part of this deal.

  3. Jeff Schneider says

    Hello Andrew,

    The Digital Junk Mail quality GTLDs in the donuts portfolio watered the ending valuations down. JAS
    Gratefully, Jeff Schneider Former (Rockefeller I.B.E.C. Marketing Intelligence Analyst/Strategist) (Licensed C.B.O.E. Commodity Hedge Strategist.) (UseBiz.com)

  4. mkk says

    Guess is Berkens deal was based on revenue multiples while this deal is based on inventory numbers without revenue base. I say that because Kevin wasn’t a motivated seller, he mainly holds inventory and wait for the right bueyr to come along. Berkens on the other hand always moved inventory.

  5. John says

    Does their revenue break down how much they are making on trading/reselling names? Seems like the past year or so they have become a trading/market making firm in the domain name space.

  6. adam says

    What good domains did you see as part of the Ham deal ? I’m guessing based on the names I see still in his company name that he sold the 80% .

    OUCH though on $167 per name . . . thanks for setting the bar low though GD

  7. My Omi says

    Yowza. For $167 each, I guess that makes Kevin the desperate man who once owned, but then lost, the internet. Horrible, horrible, horrible deal IMO.

  8. cat lover says

    300,000 names for 50 million. the average price per name
    $167.
    Some of you are like “omg only $167 per name.

    imo its most likely that the top 1% were valued more than the remaining 99% combined.

    So some extremely valuable names, some good ones, and a whole lot of worthless ones thrown in the portfolio…..just my guess

    • Sarge says

      The problem with your reasoning is that you are trying to argue that 99% of them were worthless so therefore the $167 actually represented a good price.

      Ha!

      This argument fails for 2 reasons.

      #1. Kevin specialized in premium .COM domains and made it known that he did not deal in junk including gtlds.

      #2. GoDaddy is a sophisticated buyer who is not in the market to buy crap. From the Berkens sale, we know that they only want premium .com.

      I conclude, then, that you are wrong and that the $167 price was an outright steal for GoDaddy and that Kevin Ham somehow managed to make a bad deal for himself. If you include his carrying costs for nearly 20 years, he actually took a bloodbath.

      Don’t try this at home, Kids. Instead, pay the money to hire professional representation so that this scenario does not happen to you.

      • Andrew Allemann says

        For all we know Kevin’s sale averaged much more per domain. Remember there were two portfolios here. But even if Donuts’ was $0 (not the case), the upper limit on Kevin’s would be $500 per name assuming 100k names.

  9. Daniel says

    @Cat Lover,

    Would Kevin Ham have sold any ONE of the individual components for just $167? No, of course not yet what did he do? He went and sold EACH of them for that same low, sucky price! No way can you convince me that this was a good deal. It was actually a really bad one.

  10. John Napoletano says

    Any guess as to how many of the 300,000 were $0 value typos and spelling variations of better domain names? I can’t imagine that GoDaddy can sell those. Stuff like that passes through the auctions every day without bids or sales. Or calling SomethingMGT.com a premium because MGT is supposed to be Management. Just curious how they build and sell these large portfolios.

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