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February 23, 2007


Hairy Ape

So if they are the smart guys does that imply that Ult was dumb for selling his portfolio for a paltry 160M?

And I disagree with your breakdown of the quality and value of their names particularly from practicality-of-it-all perspective. Individual retail end-user buyers ready to pony up such amounts of cash for individual domains (whose values and importance are always extremly arbitrary from entity to entity and decision maker to decision maker) are few and far in between. And what else is Marchex supposed to do; list them on Sedo with the reserve prices you mentioned?

Wall Street is normally conservative by nature, and maybe they are just not viewing vacant land on the Vegas strip, but in Henderson, Nevada instead? Just a thought.


Yun wasn't dumb because he sold the portfolio in Summer of 2004. That was just a different time. Gold was $430 an ounce back then, oil lower too; so US currency was worth more (housing lower, and the dollar just 'bought' more). There were a couple of interesting dynamics going on when he did his deal. First, he sold for a new benchmark (there was no comparitive seller). Second,Yahoo was paying alot better than his previous partner Findwhat (now MIVA)on PPC traffic at that time (and the whole transaction was based on a multiple of PPC). He probably saw this "huge upshot" in traffic revenue (moving from one traffic partner to another) as a windfall to be capitalised on and ran for the exits. If you accept that statement (and you should), I find it funny how "smart analysts" today accept that arbitrary benchmark (based on one guy's situation) as the defacto standard for doing deals in this space. Imagine if I sold for 300mm based 15X the revenue I can earn at Google, then I sign a deal with Yahoo and say WOW! I am making soooooo much more money per year than with Google -- and then Ebay or Amazon or MSN comes along afterward and clobbers them all with an unprecedented flat-rate per thousand, just to get my traffic. The conservative break-up value (selling names)is still WAYYYY higher than even that unprecedented flat-rate PPC number!! I'm not talking pie in the sky break up value here, just methodical conservative analysis of each name. The passage of time disolves the previous benchmark like footsteps on my sandy beach. Only the dumbest today would sell for anything that even closely resembles a 'Yun multiple' of PPC revenue (Again.. not calling Yun dumb - on the contrary he was smart, but making that statement based on the occular of time passage). The only folks who even try to get "the Yun multiple" today are split-bias portfolio sellers who have an equal number of trademarks to generic names. In fact there has not been ONE clean large name portfolio transaction closed since Yun Ye (he had a very small relative number of tm issues IMO). In regard to the practicality of it all: Names "do sell" consistently and for alot of money through name sales services and brokages. Many name sales services are now banding together by syndicating sales inventory to other services in order to increase the historical 2-3% inventory sale turn-rate. Regarding Wall Street being conservative.. I had this post written an hour ago, but couldn't stop my side hurting from the laughter to press the Post button. Wallstreet being conservative? No disrespect but that's laughing-out-loud funny. Look at the DOW. Hedge funds are overpaying for the moon. The domain space is soooo undervalued today because it has ABSOLUTELY NO VISIBILITY. It has NOT ridden along with the broader market. Only liquidity (easy access to money) has driven up values to-date. If wall street style sexy-excitement and optimism were factored into sales multiples Marchex would be a 5 billion dollar company (based on their present snapshot). People on Main Street are NOT in any manner cognizant of what we do. I still have trouble explaining it to my neighbors here on the beach. The domain space in 2007 is like search in 1996. Very very early. JMO of course Ape.

Hairy Ape

I agree that we are still early in the game (Q1), but with the new benchmarks in domain space proving kind of elusive and constantly moving out of reach - is it any wonder that Wall Street is behind? I see your point, but I also understand them and their reluctance... for now. It is almost certain that they will eventually have to step up to the plate (the good times are rolling by them for far too long) and devour all that is truly worthy, including you. Especially if you keep spreading your gospel so enthusiastically in this blog :)

But explaing to your neigbors what is it exactly that you do might be whole other matter still. After all, most regular "folk" pronounce the word Internet as INNER-NET, let alone else.

Adam Strong

Wow $5B . Wonder what that puts NA value at. :) What do you think about Dean Shannon selling his portion of Fabulous(DBS) ??


It's not going to be overnight Adam but we will all get to the ultimate correct valuations as monetization opportunities improve. Everyone has different reasons for doing things.. Dean had been doing this a while, he made alot of money in the adult space, I heard that health issues may have played into it. There's always a story. Its like winning the lottery. You "know" you've won the lotto. You've turned in the ticket. Why take the deeply discounted lump-sum now if you're young and healthy?.. yet nearly everyone does.


I have a love/hate relationship with that company. Every time I come across one of those 5000 domains that are pure gold it pains me to see they are not using it "better".

Unlike your empire, they have chosen a different strategy; they pay a lot of money to a bunch of truly smart developers, marketers, movers & shakers, etc, but their strategy is to treat all their domains equally.

The TM infringements get the same templates as the million dollar domains. This feels like a mistake to me.

If they ever wake up and really see some of the trees in their forest I think they could put some of their resources to real use & be more like an IAC. But right now it just doesn't seem like their focus is in the right spot.

***FS*** I like the underlying assets.. those names (for the most part) are like bedrock IMO.

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