Domain Portfolio Worth $600 Million Retail: Dark Blue Sea
Firm values retail value of portfolio at approximately $1,000 USD per domain.
A Dark Blue Sea investor presentation (pdf) suggests that the retail value of its 570,000 domain portfolio is regarding $600 million. The presentation also provides a wealth of other statistics and details on its deal with domain registrar GoDaddy.
Dark Blue Sea, an Australian firm, is well known to domain name investors for its Fabulous domain registrar and domain parking services.
As of the end of 2007, approximately 152,000 of the firm’s domain names were profitable, meaning they eclipsed the $6.42 wholesale price of domain registration. The firm estimates the average retail value of its domains to be $1,000, and also predicts that GoDaddy will help it sell 45,000 domains over the coming five years. Dark Blue Sea inked a partnership with GoDaddy earlier this year that involves a commission and options for 7% of Dark Blue Sea. The options vest as stated by the number of sales GoDaddy generates, which incentivizes the firm to make sales. Overall, Dark Blue Sea expects $25 million to $30 million in profit from the GoDaddy deal over the next five years.
So if only a quarter of Dark Blue Sea’s domain names are profitable from pay-per-click revenue, where is the value? The firm points to the retail market, where domain purchase prices have little connection to PPC multiples. For example, here are some domains the firm has sold, the sales price, 12 months trailing revenue, and the implied revenue multiple:
MagazineReviews.com – $1,200 – $2.28 – 527x
CollegeInvestment.com – $2,650 – $32.08 – 83x
UraniumOxide.com – $830 – $.69 – 1197x
MexicanStocks.com – $800 – $.76 – 1058x
ArtBlankets.com – $1,200 – $.33 – 3663x
Another firm that focuses on retail sales is NameMedia, which owns domain name aftermarket Afternic and sales platform BuyDomains. NameMedia states the “sweet spot” for modest and medium business domain name sales is between $2,000 and $5,000.
