Analyzing the eNom buyout of BulkRegister

eCommerce Times has a good article analyzing eNom’s recent purchase.

The two-part story debuted the prior week but the second half was just published today. Despite having some inaccuracies (such as saying Business.com is the highest-ever noted domain name sale) the articles do a good job of surveying the domain name landscape and how this buyout can shake up the industry.

Author Anthony Mitchell analyzes why BulkRegister fell on hard times and became ripe for buyout:

In a market where most registrars have positioned themselves as full-service hosting firms, BulkRegister kept focusing on its original business model. The competitive advantage that it enjoyed by undercutting prices during its growth spurt in 2000 has been neutralized by the evolving business practices of its competitors.

Unable to respond in a timely or effective manner with fresh feature offerings that could cross subsidize and enhance its core registration services, BulkRegister saw its client base stagnate. This was compounded by poor client communications practices and difficulties in successfully launching fresh service offerings, especially its private registration service…

In an effort to control costs, BulkRegister channeled client support contacts through an e-mail and bulletin board system that it calls Support Trak. Although it maintained its client support activities within the U.S., it was not always able to maintain quality assurance or consistency. By shunning voice contacts, BulkRegister gave up opportunities for using voice conversations to resolve client misunderstandings, retain notable clients and upsell additional products and services.

Mitchell identifies four advantages to eNom by acquiring BulkRegister:

1. Placeholder (parking) ad revenue
2. Access to portfolios
3. Access to expired domains
4. Cheap buyout price

The latter isn’t really a long term competitive advantage but merely speculation that eNom got a good price on the buyout.