BuyDomains.com Sold Again to Endurance Group!
The sale of BuyDomains.com has raised some eyebrows since the BuyDomains.com sale closed. Details of the sale weren’t released right away, as the sale closed in the second part of September, industry followers were left to speculate over what the sale could have entailed with regard to value and cost.
Six years, to July 2008, when BuyDomains.com was advertising heavily to small and mid-sized end-users in a targeted budget, rather than domain owners. They led the way in educating businesses about the value of generic domain names and elevated the entire industry. Advertisements were everywhere at this time with BuyDomains detailing cost savings, branding, global reach and capital investments in their marketing materials. Now we know Endurance International Group purchased the company for a cost of $44.9 million, initial reports stated the sale went for a much higher amount of $77 million but while Endurance did spend $77 million dollars that day it wasn’t on BuyDomains alone. So what was the breakdown in cost? Here’s where valuation can be tricky to understand, domain brokers such as Marchex, GoDaddy, and HugeDomains all follow their own process for determining value. The value of the sale can be made some sense of although with no full disclosure of the terms of the agreement everything can still be left to speculation.
The acquisition includes BuyDomains well stocked portfolio consisting of nearly a million domain names. It is established with two storefronts including BuyDomains.com and DirectDomains.com as well as the implementation teams, intellectual property and valuation algorithms. Luckily for the new owner, the offices of BuyDomains are closely located to their own headquarters in Boston, Massachusetts.
At a purchase price of $44.9M, the average cost per domain maxes out at around $47. With a very long list of available domains for sale, it would essentially take over 80 years to sell the entire portfolio if Endurance follows a 2% yearly sales model. Sales of these domains, along with replenishing inventory wisely will aid in business success and longevity.
NameMedia, who also owned a number of other domain name businesses has sold off the rest of their assets as well giving investors an exit option. Last year around the same time, GoDaddy acquired Afternic leaving BuyDomains as the last asset to liquidate. At the time of the Afternic sale, it was “typically reporting $1 million per week in sales. Some weeks with as many as 500 domains”, according to Andrew Alleman, of Domain News Wire.
Interesting will be any new sales tactics and advertising implemented, I think we will hear additional news out of the company over the coming months as new ideas and processes are implemented. Should make for an interesting read!
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