Widely reported on other sites and forums.. 
I'm a bit behind the ball as the vacation continues through Sunday.
I find announcements like this surprising because the name is clearly the main thing of value in this enterprise. The software, content, user base are relatively duplicable through a little elbow grease and traffic arbitrage. Now I'm not saying that the domain name isn't worth (potential) $300 million, but I am saying that the rest of the machinations behind the curtain.. everything else is easily duplicable and not worth 300 million.. JMO of course.
This and the recent TRAFFIC auction in New York City when 217 names could have sold for cumulative 63 million, could illuminate the kind of world we might expect to find in the future.
Paul Sloan reflects on this potential deal here: http://blogs.business2.com/sloan/2007/06/businesscom-for.html
Keep in mind that its the whole company that's for sale, not just the name or the site. The article doesn't say what else the company owns (domains, sites, or otherwise), but Work.com is linked in the Business.com footer and appears to belong to the same co.
***FS*** Good point.. work.com 'and' business.com .. thats "two" things of intrinsic burndown value. The question is, could you relatively easily reinvent the remainder for 5-10mm in cash spent on people etc.. so hence the skepticism about the value.
Posted by: Russ Goodwin | June 22, 2007 at 02:37 PM
Das a lot of money mang.....
***FS*** bahhh! .. :)) Couldn't have said it better myself Mr. Montana
Posted by: Jack | June 22, 2007 at 03:57 PM
What kind of elbow grease are using? hehe
It will take allot of capital to arbitrage and net $15 million at the end of the year though right?
***FS*** Not really .. I have a friend who recently started arbitrage for his sites and he's netting about a million a month.
Posted by: Salman | June 22, 2007 at 05:00 PM
At anything more than 200 mill, how many ways can one say, o.v.e.r.p.r.i.c.e.d.?
Since 95%+ of the value's in the operating business itself and NOT in the domain, a better approach would be to also develop, oh, I don't know--say a Businessly.com--following the successful path Business.com's already blazed... :-)
Posted by: Steve Morsa | June 22, 2007 at 07:22 PM
Frank,
Can you be Frank with me? *smirk* The $$$ is in the details!!
You mentioned before that a domain like hobbyshop is worth 50K'ish, and maybe 10x that amount if developed.
Can you provide some action items on what you would do, I just can't believe a content site could pull more than a ecommerce site!
What would your sources of arbi be? What kind of daily spend?
Example:
1. design + logo
2. 100 content pages/reviews
3. blog with 3+ posts per day
4. ??????
Posted by: Salman | June 22, 2007 at 07:45 PM
I got automobiles.com in Japanese..
I'll be waiting for that 100 million dollar check when values go up. ;-)
Posted by: Jeff | June 22, 2007 at 08:34 PM
so does mark get part of this? Jay says he has already cashed in his chips a while back... Another article said Mark HOPES it sells for 300 million cause he will make a nice chunk.
Posted by: Jeff | June 22, 2007 at 08:44 PM
How about vote4democrat.com ? It is for sale on market now. I think this domain is good for US election 2008.
Posted by: Johny | June 23, 2007 at 04:11 AM
Hey Frank,
Did you hear already about the .com button on the iphone? Also, I would like to ask you your analysis on the results of the Moniker auction for .mobi names. What's your take in the light of these new developments?
Best regards
Javier
Trendirama.com
***FS*** I did "not" hear about it.. At last!! Sweet redemption. This going to be huge. I think .mobi is not .real.. Thats all i can say about it.. Let the passage of time prove me wrong.
Posted by: Javier Marti | June 23, 2007 at 06:23 PM
Life's Been Good - The Eagles / Joe Walsh
I have a mansion forget the price
Aint never been there they tell me its nice
I live in hotels tear out the walls
I have accountants pay for it all
They say Im crazy but I have a good time
(everybody say oh, yeah.....oh,yeah)
Im just looking for clues at the scene of the crime
Lifes been good to me so far
---- sounds familiar ;)
***FS*** Thats funny. It actually 'does' sound familiar
Posted by: Alex C | June 23, 2007 at 10:02 PM
As I recall, the old (pre-crash) Great Domains used to run an advert. that said:
"Is your next billion-dollar IPO amongst this list..?" (of Dot-com names).
I've long thought that the killer concept for top-end domains was IPO.
IPO changes all valuations spectacularly. As a hypothetical, consider an
existing corporation that could presently go IPO for $5bill. (smallish by today's standards), but could make $10bill. if it had a top-end flagship name with a quality built-in consumer-recognition presence. What price would Business.com
be worth to that type of IPO ? I suspect that 400Mill. (cash+stock ?) would be
considered a cheap deal.
All speculation for the future, but one thing's certain, domainers may be ahead
of the loop on domains, but we're babes in the wood in the IPO commercial jungle.
***FS*** True sir.. but that stuff can be learned.. Learning when names drop and how to get them was incredibly difficult.. Subsequent challenges seem less like Everest and more like speedbumps
Posted by: Lachlan | June 24, 2007 at 03:26 AM
Nice post, Frank.
I think their actual business model is unknown. I don't think it's primarily arbitrage. Their annual revenue is in the $50 million range with profits of around $15MM (as has been reported.)
They have a lot of strategic partnerships in place (it seems) at an affiliate level and also at a syndication level. It 'appears' as if they sell quite a few of their $199/year listing fees to businesses that want placement in their directory -- this is outside of their Google search results.
If they are indeed doing $50MM/year in revenue, then their asking price would be 7 times earnings; not completely unrealistic, especially if they are showing anykind of serious growth potential. * They claim their traffic grew 50% in the first quarter of 2007.
A peek inside their books would reveal more about the value. If they aren't spending a small fortune on traffic (i.e. arbitrage in motion) then their business is pretty valuable.
Compete.com data shows their site is currently about 3.5MM unique visitors a month. You can see the recent growth in their traffic over the past few months. BUT... as I mentioned, if this is merely "turning up the ad spend" for arbitrage purposes then that's definitely overrating the value of the business. BUT, on the other hand, if their traffic is naturally growing from repeat visitors, then that's another valuation completely.
~John
Posted by: John Reese | June 24, 2007 at 09:05 AM
If business.com really does $15mm a year in profits (assuming profits=EBITDA), then a price of $300mm wouldnt be that bad. That would equate to about 20x EBITDA, vs Marchex trading at 15x EBITDA, and the downtrodden newspaper group trading for 10x. If they really are growing at a big clip each quarter, then 20x EBITDA is is darn cheap. And if a large, well known company bought it, took out duplicate overhead costs and added revenue synergies, then $300mm is a downright steal. All this assuming that it really does $15mm/year in profits of course.
Posted by: Joe | June 24, 2007 at 05:42 PM
yes, its the domain NOT the site agree 100%, sky was ahead of the curve but wasa right about it
Posted by: Patrick Kerr of PTRADES | June 25, 2007 at 10:29 AM
Hey, even an SEO guy, Aaron Wall gets it:
http://www.seobook.com/archives/002312.shtml
"I have spent $10,000+ buying a non-type-in domain name that someone paid $8 for. I have done it more than once in the last month. Why? Synergistic value in branding, associated perceived trust, and market differentiation...which are all important in a crowded marketplace."
Bottom line is that not only you get great type in traffic with a generic domain....but you also get the intrinsic value of automatic brandability. With Business.com, they turned a $7.5 mill generic domain into possibly a $300 mill enterprise by leveraging it's generic domain name with content and arbitrage.
Sounds like a blueprint for generic domain holders to me.
Posted by: Gabe | June 25, 2007 at 01:02 PM
Yes, I would agree that it is the domain, not the site. However, I would say that they have done a good job at displaying the sites value by putting advertisements on the site and saying - if we can make millions off of simple ads, think of how much you could make with a site that offered valuable services or products. So I would say that the reason for the sites high value is not just the domain, it is also what they have done to make the domain what it is.
--
Max Bailey.
http://www.cmyblogs.com - Free Blogs.
http://www,cmyos.com - Free Online Operating System
Posted by: Max Bailey | June 26, 2007 at 11:20 AM
Certain things stick out on this planet and the generic term business.com is one of the greatest. You can compare it to the sun. A huge mass that needs no explanation and is seen in the minds of the world on a daily basis. what is the value of the sun if you could put your ad sign on it. Your absolutely right. Priceless.
Sat Jun 30, 03:49:00 PM EDT
Posted by: daniel rueda | June 30, 2007 at 03:54 PM