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What GoDaddy’s acquisition of Uniregistry means for domain investors

by — Domain Registrars 13 Comments

Less competition for expired domains, but less competition for registrars, too.

Image with GoDaddy and Uniregistry logos, and the words "Deal Implications"

Earlier today, GoDaddy announced that it is acquiring Uniregistry and Frank Schilling’s domain name portfolio. Here are some ways this will impact the domain name industry.

Less competition for expired domains: Let’s start with some good news for domain name investors: Frank will no longer be bidding against you in expired domain auctions. He confirmed to me that he has no plans to rebuild a domain portfolio. “I’ve already built the best portfolio in the world.” The absence of one major buyer can have a big impact on bid prices.

Less competition in the registrar space: Uniregistry is very small compared to GoDaddy, but it pushed GoDaddy to improve its service for domain name investors. GoDaddy will incorporate some of Uniregistry’s innovations, but whenever a competitor is taken out of the equation, it takes some heat off of the market leader.

A buying opportunity: Once GoDaddy incorporates Frank’s inventory into its own, most of the domains will have ‘buy now’ prices and they are likely more affordable than what Frank would have sold the domains for. This gives investors and end users an opportunity to buy domains.

More expired inventory on GoDaddy: This is a loss for Dynadot. Now that Uniregistry is part of GoDaddy, its expired domain inventory will (eventually) flow through GoDaddy Auctions.

Good talent on the market: GoDaddy is retaining Uniregistry’s employees. But whenever there’s a corporate takeover like this, some employees will decide that the new environment isn’t right for them. This may mean some talented and experienced registrar and domain aftermarket people will be available to hire.

Less data/more data: I’ll miss getting Uniregistry’s weekly list of top 20 domain sales. GoDaddy doesn’t report individual sales. But GoDaddy includes sales in its comps for domain appraisals. So less data will be readily available but GoDaddy will have more data to crunch and provide to domain investors.

An in-depth look at NameJet’s sales

by — Domain Sales 4 Comments

Joseph Peterson dives into last month’s sales on Web.com’s aftermarket platforms.

Image that says Top Domain Sales with NameJet and SnapNames logos

Yesterday, I published a quantitative comparison of NameJet sales in December 2019 compared to 2015.  Now let’s look at what sold last month, including both NameJet and SnapNames.

The top sale – WeedCenter.org ($23.1k) – is a bit surprising … and in more ways than one.  Of course, 2-word .ORG domains don’t usually rake in so much green.  Seldom do they top the sales charts.  But marijuana (a.k.a. “weed”) is both a cash crop and a burgeoning industry, now that legalization is so widespread.  Arguably .ORG has a certain cachet for a medical cannabis dispensary, due to its associations with non-profit projects.  Still, it’s a curious fact that the matching .COM sits parked, un-utilized.  Did the bidders try to buy it?  What would they have paid?  More?  Or does this aged .ORG have its own special benefits – back-links for SEO perhaps.  It has been a developed website since 2001.  But – surprise! – it began as CIPM, the Center for Invasive Plant Management – literal weeds, not weed at all. Click here to see the full analysis…

How NameJet has changed over the past four years

by — Domain Sales 6 Comments

Joseph Peterson returns to write about NameJet. The Chinese market implosion and new expired domain deals have changed the face of NameJet since he last wrote.

Yellow and blue graphic that states "Namejet four years later"

I stopped writing articles about domains at NameJet for DNW about 4 years ago.  “My how time flies!” would be one reaction.  But some things never change.  Or do they?  How has the domain market changed?

Rewind to January 2016, and we were looking at a record-breaking month for NameJet – technically a recap of December 2015.  Indeed, 2015 set and broke new records almost every month, as sale prices soared and transaction volume ballooned.  Chiefly this sudden growth occurred within a few categories of short domains prized by China, which were traded eagerly by speculators worldwide.  It was the year of the Chinese surge, as the graybeards will remember.  Prices were only going up, would always go up.  And if that market sector has deflated somewhat since, well, that may explain some of the gray beards.

Now we’re reviewing sales from December 2019.  What changes can we observe?  Let me reproduce this data from exactly 4 years ago: Click here to continue reading…

Tucows exits its domain name portfolio

by — Domain Registrars 9 Comments

Company no longer holds a portfolio of domains for the secondary market.

Tucows logoTucows (NASDAQ: TCX) released its Q3 earnings yesterday. You can see the numbers here (pdf), but they aren’t the headline for the domain segment. Instead, it’s this: after many years of owning its a domain portfolio, Tucows has exited that business.

It still owns a portfolio of surname domain names that it uses for its Realnames email service. But it no longer holds a portfolio of domain names to monetize via pay-per-click and to sell on the aftermarket.

It sold the remainder of its portfolio over the past few months. It made a bulk sale of $1.9 million during the third quarter and $1.4 million after the quarter ended. (I believe that GoDaddy was the buyer.)

Tucows CEO Elliot Noss explained the change in the aftermarket business in the latest pre-recorded investor conference call (pdf):

We have owned our own portfolio for a little over a decade now, and it’s been a great tactical business, consistently generating sales in the range of $2 and $3 million annually, with relatively little ebb and flow, and with some years punctuated by a larger bulk sale or two.

Throughout this period, two things were true. We were always adding to the portfolio through the expiry stream and we were always needing to increase the transaction volume in order to maintain the same levels. At the same time, the underlying demand in this segment was declining as the increasing sophistication of SEO and related online advertising technologies reduced the returns on direct navigation domain names. We have all witnessed the maturation of online advertising technologies over this time as they evolved from a relatively blunt instrument to an amazing precision tool that now tracks every element of our life with great accuracy and provides incredibly efficient, if sometimes annoying, results. Through this maturation, the value of domain name traffic has declined to the point where we made the decision, starting a couple of years ago, to first reduce our exposure to this segment, and  finally, to exit it completely. We do want to note that the value of a premium domain name, as a name for a company itself, has never waned — it’s at least what it was when we started this exercise –and might even be up over time. Despite the fact that premium names was the segment of the market that we focused on, the value of leads was the primary driver for the health of this segment.

Tl;dr: Direct navigation and domain parking went to shit, which has dramatically changed the domain name investing business.

There’s some good news for domain investors in this announcement. Investors were annoyed that Tucows would cherry-pick expiring inventory for its own portfolio. Now it’s sending all of it to GoDaddy Auctions.

Tucows releases earnings, quantifies lift from GoDaddy Auctions

by — Domain Registrars 2 Comments

Margin contribution from domains up due to price increases and Ascio; Tucows also explains lift from moving Enom expiry stream.

Picture of stock ticker board with words "earnings announcement" below it

Tucows (NASDAQ: TCX) released second quarter earnings (pdf) yesterday after the close of the market.

The company has three business lines: domain names, mobile service and internet service.

For the domains segment, Q2 revenue was $60.5 million, up from $56.8 million in the same quarter last year.

The domain business can be further broken down into wholesale and retail. The Wholesale Business is its reseller network including Enom, OpenSRS and Ascio. Retail includes its Hover brand.

The wholesale business contributed $51.3 million revenue and the retail business contributed $8.8 million. Tucows also generates a small amount of money from its own portfolio of domains.

Total registrations are growing very slowly. Total Q2 registrations increased 1% year-over-year to 4 million including the lift from acquiring Ascio last year. Without Ascio, registration volume dropped 3.5%.

So why is revenue going up? The company raised prices last year and it’s boosting results across the board.

Gross margin in the wholesale business was up 20% year-over-year, and the domain portion of this (excluding value-added services) was up 30%. 40% of this increase was primarily due to the price increases and the other 60% is from the Ascio resellers.

Tucows also explained why its gross margin contribution for Value-Added Services jumped 19% in Q2 compared to Q1 of this year. It’s because the company moved its Enom expired domain inventory from NameJet to GoDaddy (NYSE: GDDY).