Deal or no deal?
Here’s an update from the TRAFFIC conference in Florida, courtesy of David Kesmodel.
To sell or not sell — it’s a question facing many owners of domain names amid the biggest boom the little-understood industry has ever seen. And it was a hot topic today at Traffic, the domain show in Hollywood Beach, Fla. At a panel discussion titled “Deal or no deal?” panelists ranging from veteran domain investor Rick Schwartz to Wall Street securities analyst Jordan Rohan weighed in on where the domain market is going, whether domains ought to be valued based on their revenue from pay-per-click ads, and whether it’s smart to sell a portfolio now. Here’s a summary of key comments from the panelists, edited for clarity:
Jonathan Boswell, CEO, LeaseThis.com: “The power of domains is right now grossly underutilized … If buyers are offering you a multiple of PPC (pay-per-click ad revenues), they are totally missing the potential value.â€
Grant Keiser, domain investor: “I’d like to see … a centralized site where there’s a bid and an ask (price) on various domains. Maybe a lot more deals can be made. I think a lot of times the domain owner may be wanting too much and the buyer is not leaving enough room to settle the deal.”
Dan Warner, chief operating officer, Dark Blue Sea Ltd./Fabulous.com: “A lot of people here may be talking regarding portfolio sales, but the reality is that is really the lowest price you can get for your portfolio.†In other words, selling names individually could be more profitable.
Ari Bayme, vice president, Milbank Roy, an investment banking firm: “If you can cogently demonstrate what the potential growth rate is (for your domain), and defend it, that is how you’ll get a substantially higher valuation from an institutional buyer.”
Rick Schwartz, Traffic organizer and longtime investor in domains: “We don’t have to swallow lowball offers … Domainers ought to not be listening to X (various multiple ratios). We have the gold … It’s up to us to set the price.â€
Adam Dicker, domain investor and executive vice president at online media firm Internet REIT Inc.: “At some point, you do have to give up some of the gold. Not everyone can sit and wait. We don’t know what the future holds for the Internet. It certainly doesn’t hurt to get the value for the assets” now.
Jordan Rohan, Internet analyst, RBC Capital Markets: “You absolutely need to establish multiple monetization alternatives,” not simply focus on pay-per-click ad revenue.
