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May 31, 2007

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Paul

"surprised how acrimonious and unwieldy outbound transfers are from certain registrars."

People should try a couple of outbound transfers before they even think of recommending a a registrar!! I've had problems even when I'm on both side of the transaction :)

Jeff

25 million seems cheap for snap - how come you didn't buy them out? You mentioned before you were looking to buy RegisterFly? :-)

IMO Snapnames is a better deal :P

***FS*** I live in the Caribbean so too many moving parts for me.. I'd have to travel there more or move it here. Great accretive fit for Oversee tho.

Adam

This should make for very interesting future DomainFest auctions. Congrats to the buyers/sellers both .

Jeff

I noticed a few of the makeshift registrars snap created has a $100,000 renewal fee. :P I guess thats to make sure people don't keep their names at snap after snap's job is finished :P.

ehehehe would love to see what would happen if someone that wins a $50,000 domain forgets to transfer. That would be one huge bill!

The Financier

So much more than just an auction play. Imagine monetizing the domains that go to auction during the 3-day wait period prior to an auction ending.

On day one of ownership you'd have X number of domains being monetized. On day 2 you'd have 2x and and finally on day 3 you'd max out at 3x (or 3 days of domains) under monetization. You then complete the auctions and take in that cash flow as well.

If I am Oversee, the first decision I consider is the impact on auction turnover vs. domain monetization by extending the current 3 day auction period to 4 days, maybe even 5. You'd increase the number of domains to 4x or 5x under your monetization system, all the while delaying your auction tunrover. But surely you could play with it a little to decide how adjusting one or the other impacts overall cash flow.

***FS*** Excellent point Mr. Financier.. aren't you overdue for a piece ("the sage" is working these days) ;)

Jeff

The three days is already long enough. Making it 4-5 days would be overkill for those that aren't watching names on a daily basis. ;-(

Edwin Hayward

Good news for the industry, on the whole. That leaves 4 main domain sales/auction players, each with their own strengths.

Snapnames is well-known for their super-strong droptime performance (especially since they just did the deal with eNom as well). Combine that with the DomainFest series of conferences for live-action auctions and they cover most of the bases. What they may still be lacking is depth of coverage on the "proactive brokerage" side i.e. experienced sales folks hitting the phones and their rolodexes drumming up mid-tier and higher sales.

"Sedo has good brokerage coverage and a vast catalogue of names, but no coverage at drop time and limited experience (to date) of live auctioning."

Moniker reigns supreme on the live auction success story front, but may be weaker on the proactive brokerage front and doesn't really have a huge catalogue like some of the other players.

Afternic is perhaps the weakest of the 4, since other than their excellent sales site they don't really go very far towards covering the other bases.

I can see the potential of a lot more M&A activity as the various players listed above (and others who want to be in the space) try and put together all the pieces of the jigsaw of an end-to-end domain name market, from drop catching/auctions through deep listings, professional brokerage services, transfer facilitation, escrow services, live auctions, parking, domain registration/renewal, trademark protection, legal services and more.

There are probably a dozen "pieces" that one could come up with that together cover the entire domain lifecycle from inception through use through ultimate disposal or deletion, and the first company to execute an integrated end-to-end strategy is going to pick up a LOT of momentum!

FX

i hear with this announcement, Nelson is being forced to leave or is getting kicked off Rick's domain board.

***FS*** Rick says that is not happening.. Nelson is a very talented guy :-)

Dan

To SnapNames Customers:

I'm writing to inform you that SnapNames has agreed to be acquired by Oversee.net. Oversee, a company already familiar to many in the domain name industry, is a technology-driven online marketing solutions company that offers an impressive array of services to domain name owners. You can learn more about the company at www.oversee.net.

It's important that you understand there will be no changes to the way SnapNames provides its services. This is a combination of two industry leaders with outstanding reputations for serving domain name investors and customers at all levels.

We were attracted to Oversee for many reasons, including the opportunity to offer SnapNames customers a greater breadth of service offerings. Together, the two companies can provide services that support our customers' needs throughout the entire life cycle of a domain name, including procurement, monetization and sales.

This transaction is expected to close in mid-June. There is more information available on our Web site at www.snapnames.com. Of course, we're always available to assist you in any way we can, and encourage your questions and comments. Our support team is available to you here:

On the Web: http://snapnames.custhelp.com
By e-mail: support@snapnames.com

At SnapNames, you will continue to find the world's largest selection of expired domain names. You'll find no changes to your account or the way you do business with us. We value you as a customer and thank you for your continued business.

Sincerely,

Sudhir Bhagwan
Chief Executive Officer

DP

How many names cross Snapnames each day that Oversee would like to own but Frank & others outbid them on?

This deal won't suddenly give Oversee first pass at those names - they're provided by registrar partners who expect a rate of return. Conspiracy theories will be widespread, but Oversee don't need a first pass or any backroom deals here, they can just bid in the marketplace same as everyone else with no special privileges. I don't know Snap's cut on those names but let's go with 20% as a guess - much easier to bid 100k for a name when you know you're effectively handing 20% of the bid right back to yourself. On a "drop catch" name it's all profit.

Adam

"they can just bid in the marketplace same as everyone else with no special privileges."

The special privilidge that they would enjoy is a sneak peek at the traffic and earnings potential of every domain. . . . call it drop tasting. It's the new wave. Godaddy is droptasting all the names and publishing "stats" . . . .and I expect snap/oversee could release data from the names they run ads on in order to push the bids higher. They can also keep that data to use in a variety of ways. It's a nice little data set. . . . that's golden in this biz.

Re: oversee participating as a bidder since they own the house now . . . that seems silly to me. There'll be a major issue from all the buyers and sellers(registrars) if the auction house is bidding on the names they are selling don't you think ? I would think that could possibly even be illegal. I wouldn't think that would be a good move to make let alone feasible.

Regarding 4-5 day auctions. I'd think that NSI and other partners would want their money as soon as possible. Rather than to wait for their partner to run some ads for awhile longer.

Steven

It seems I am in the minority. I Think the purchase at the rumored $25 Mil or more level is outrageous. Here are the reasons why:

1: Snapnames is just an auction house. Buyers are not loyal to a the auction house, they are loyal to what is being auctioned. Look at the rise and fall of Pool as an example.

2. The available drop list pool gets thinner and thinner daily. Frank, as you have mentioned, in 5 years from now, there will be NO drops so part of their business will evaporate.

***FS*** Different stuff will get auctioned .. see next post.

You mention an area of growth:

Then how about if they ran that auction with 4 lanes in a Las Vegas hotel and did the auction/show to coincide with Winter CES when everyone in technology attends? Think about what Christies, Barret-Jackson, and Sothebys have done with auctions over the years. Then think about how important great domain names are (are going to be in future).

3. They still need willing sellers to let names go at a price other domainers will pay. How many end users are buying names at Moniker Auction's now? How many people "get" the power of a good name of Madison Ave?

4.Someone mentioned they could expand the auction days so they could receive increased parking revenue. Why would the registars agree to that? The Registers know it's their gold and can dictate the terms.
If I was Enom, Register, Netsol or any other company, I understand the amount of revenue the names generate regardless of the number of days. The registers have choices, Snapnames needs them, they do not NEED snapnames. There are other options available.

I think Snapnames is a well run, easy to use auction house. I guess it all comes down to the price they paid for it. If they got it at the right price, good job as it has potential to grow and have some synergies with your other Oversee offerings.

Just my 2 cents

Rob Sequin

I hear a rumbling of earth shaking events coming our way. Will there be something between now and TRAFFIC in June or will the next rumble be at TRAFFIC or shortly after.

Anyway, congrats to all parties. No one can touch snap now especially with the enom feed announced earlier.

Watch traffic and rev names from DS go to snap auction, similar to what namedrive did/does by offering their customers' traffic and rev names to investors.

Then, you'll see a flood of parking go to DS. Nice benefit to the merger :-)

Jeff

Various sources are saying between 25-50 million which is a huge difference. ;-(

Guess we'll never know!

Dave Wrixon

Threats and Opportunities

Biggest threat is Verisign's attempts to establish a central clearance system, which would probably mean that supply of gTLDs would dry up altogether.

Biggest and largely unrecognised opportunity will be the supply of a lot of new names to sell from the arrival of IDN. A lot lot more dot coms to monetize and auction. I wonder if the publication of the two large Korean Sales might have crystallized the deal. Oversee understand the potential of IDN better than any other large organisation that was likely to bid for Snapnames.Perhaps they moved for the kill in case anyone else caught on to that potential.

***FS*** This particular one isn't about IDN Dave.. but I get your point.

John

Well, I guess this purchase shows that shady business practices in domain land really pay off for those willing to take the low road.

Oversee made their money the old fashioned way. They cyber squatted it (Oversee is currently being sued for it) -and- They swiped it (their Chesterton Holdings and other aliases monitored client whois searches and regged ahead)through tasting.

Is it greed? Isn't there enough money to be made running a clean domain business rather than stooping to what the Oversee group does? Makes me worried about what these guys will do with Snap.

J

-waiting for a post where dave does not mention "IDNs".

Dave Wrixon

J, if you do not associate Oversee with IDN, then you probably know less than you think about either. Both Ron Sheridan and Jothan Frakes who is now their Director of Strategic Accounts at Domain Sponsor are very interested in IDN.

Here is an excerpt from an interview with Monte Cahn Sept 2006:


Jothan: Domains are big. They said that globally, there’s over 105 million domain names registered, across all the ccTLDs and gTLDs and everything.

Monte: Right. And then . . .

Jothan: It’s an impressive stat. The thing that impressed me the most was the IDN talk, that, you know, with each of the IDN ware releases of the IE 7 browser, the IE browser has basically driven registrations of internationalized domain names.

Monte: And what . . . have they given some number, some of the recent numbers on the IDN registrations?

Jothan: Ah, the recent IDN registrations, I think that they’ve said, I think it’s 6% of registrations. [inaudible] . . .

Monte: So that’s a pretty significant number for IDN . . .

Jothan: I don’t remember the exact numbers, Monte.

Monte: Right.

Jothan: It was pretty strong. What they said was the biggest deal was of the domains that are registered that the retention rate and renewal rate and, ah, was much higher with IDN domains. That they’re actually getting used and actually getting developed.

Monte: Yeah, that’s great. And the IDNs are becoming more and more popular. We’re seeing a lot of . . . actually participated in a number of sales in the recent months on some IDN names for pretty decent dollars and are about to handle some significant portfolios of IDN names as well.

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