Sex.com site Sold for $14 Million
Sex.com has been sold for $14 million, according to a report in Xbiz.com, a web site for adult webmasters. The existing record for a domain sale is $7.5 million for business.com in 1999, at the height of the dot-com bubble. That sale continues to top the list of biggest domain resales of all time.
The buyer is said to be Escom LLC, which is now listed as the domain's owner in the WHOIS database. The name was previously owned by Gary Kremen, who regained the domain in 2004, which had been hijacked in 1995 via an unauthorized registrar transfer.
UPDATE: The sale price includes the adult web site business connected with the domain, and not just the domain alone. This will be an important point to some domain industry professionals, who differentiate between the sale of a domain-based business and a single name.
(Link via the Domaining Blog).
Posted by RichM 
January 19, 2006 | Permalink | Newsletter
December 7, 2005
Domain Name Pricing Guide
Things have been quiet here at DomainWorks, but we're back with a new name and focus. With the Domain Name Pricing Guide, I'll be featuring news and research that affects the price of domains. That includes a chart on our home page tracking pricing for first-time domain name registrations, which ranks registrars and major resellers by the price for a one-year .com domain. Note: this doesn't include bundles or multi-year registrations, which will be tracked separately. We'll also highlight promotions and trends in domain pricing, secondary market sales of existing domains, and look at the pay-per-click advertising business and how trends at domain parking services affect valuations.
You'll also see lots of "quick-linking" posts that feature interesting stories but are lighter on commentary. I found myself posting fewer items because I didn't have time to write a "full post." As a result, there were lots of intersting links I was seeing but not posting for readers. My goal is to share more links and not worry so much about saying something profound about each one. Thanks for coming, and I hope you find the site useful.
Posted by RichM December 7, 2005 | Permalink | Newsletter
May 31, 2005
Zetetic: Domain Resales Net 377 Percent Gain
Zetetic has studied domains that have been resold more than once since 1996, and finds an average return on investment of 377 percent, with the average name being bought and resold in 12.5 months.
Zetetic, a domain research and appraisal firm, used its database of of more than 8,000 resales, and found 74 domains that had been resold in the secondary market at least twice. The median buy price for a domain name was $891, which was resold within 8.8 months for $1,450, resulting in a 83 percent return on investment. The average sale saw a much higher ROI of 377 percent, and was boosted by the inclusion of men.com, which sold for $1.3 million in 2003. The median represents the mid-point of sales - with half of all names selling for less, and half selling for more - while the average divides the total sale by the number of names, and can be influenced by a small number of high or low sales.
Posted by RichM May 31, 2005 | Permalink | Newsletter
May 27, 2005
VC Valuations May Disappoint Domainers
Domain Name Journal is providing updates from this week's industry conferences in Las Vegas and Seattle. Venture capital interest in the domain industry was the hot topic at Traffic West, as keynote speaker Marc Ostrofsky of Internet REIT, LLP confirmed that said his new partnership is putting together a $250-$500 million war chest to acquire top quality domains.
But at what price? While VC funds have big wallets, they're looking for home runs on those investments. In the domain business, that means buying low and selling high. As such, the venture capital funds' valuations of domain portfolios may not align with market hopes. An excerpt from DNJournal's recap of the recap of the domain venture capital panel at Traffic West:
During the standing room only session they told attendees they were looking to acquire portfolios for 5-7 times annual revenues. With Marchex having already paid more than 8 times annual earnings for the Ultimate Search portfolio, (Conference organizers Rick) Schwartz doesn't believe there will be a lot of takers at those price levels. Schwartz told us, "the VC guys sited 'risk' as the key reason for not going higher than those multiples and it was met with skepticism from the domainers who perceive the 'risk' to have been taken by them years ago when they purchased their domains and not now."It sounds as though the panel helped the buy and sell sides of the equation develop a better understanding of the perspectives each will bring to future negotiations. It may also have created a broader context for the Marchex-UltSearch deal and to what extent it represents a benchmark for future sales.
Posted by RichM May 27, 2005 | Permalink | Newsletter
May 12, 2005
Will VC Demand Boost Domain Prices?
MSNBC has a story about the emergence of domain speculation as a profitable business (link via DomainingBlog), noting that "a turnaround last year suggests that a legitimate domain market may be booming again."
That's hardly news. A more interesting trend was highlighted late in the story: venture capital interest in the domain name market. This is a natural outcome of the land rush following the Ult-Search-Marchex deal, but it's interesting to see the story fleshed out a bit:
Marc Ostrofsky, the veteran domain speculator behind the record-breaking $7.5 million sale of Business.com in 1999, is forming a $250 million "Internet real estate investment trust." He and his partner, Houston investment banker Bob Martin, have spoken with interested hedge fund managers and venture capital firms in New York, Los Angeles and Silicon Valley. "When the investment community heard what we’re playing with, they liked it," says Ostrofsky. "They liken it to a land rush."The bottom line: more money is likely to flow into the domain name market, boosting demand and pricing. The additional money flowing into the market - whether from investment-fueled outfits like Ostrofsky's or newbie speculators who just read about the business on MSNBC - will probably mean more competive auctions. Unless, of course, domain owners who've been sitting on valuable names decide that now is the time to sell, boosting inventory. Either way, there's plenty of action all ahead.
Posted by RichM May 12, 2005 | Permalink | Newsletter