DomainTools Blog

Some of you have noticed that we are selling a domain name called Junk Yard Dog.com in our Live Auction. The domain by itself is not worth much however it is attached to a killer company that makes a lot of revenue. This is not only a domain name but an entire company. The salvage and junk yard business is a huge business online and Junk Yard Dogs is leading the way. In fact it is listed number one on Google for the term “Junkyard” or “Salvage Yard”. So in terms that a domainer can understand, this is basically like buying Junkyard.com and SalvageYards.com combined; plus all the content; plus established revenue streams.

Here is a prepared statement from the owner:

Junk Yard Dog® has had steady growth over the last 8 plus years, and it has room to grow. JYD has maintained a membership of around 100 members for years and the cost of membership has risen from $45 / Month to $60 to $100 to $200 and now $300. Also, with the last increase, the price for brokers has gone to $500 / month. Old members were grandfathered in on the last increase. Some members (according to what they tell me) sell upwards of $40K per month using JYD’s services. A realistic value for this service could be in the $1000 / month range, as members receive between 25000 and 30000 requests for parts quotes per month.

Although to many members $1000 per month is too extreme, you must remember JYD is highly profitable with only 100 members and there are reportedly around 30,000 salvage yards in the US.

Another huge asset of JYD is its traffic. One major aftermarket auto part site is spending approximately 80 cents per visitor. With visitor numbers around 4000 per day, that makes potential traffic value at over one million dollars per year.

JYD also has its own searchable database of salvage yards including over 5000 salvage yards. This search feature allows entries to have priority of 0 to 10. A few of JYD’s members pay an additional $50 to $100 per month for higher placement in the results. This is a highly under used revenue stream considering there are between 50,000 and 70,000 searches per month. This search also has Google Adsense.

JYD has one site wide advertiser paying $1500 to $2000 per month that has been advertising since September. Another advertiser pays $800 per month to advertise on the home page and to have a banner in rotation. This is all expandable and can increase revenue substantially.

It takes years of hard work to organically rank websites in search engines; JunkYardDog.com has done exactly that, they rank number one for these keywords at Google (just to name a few):

• Junkyard Search
• Salvage Yards
• Junkyard
• Junk Yard
• Salvage Car Parts
• Used Auto Parts Dealers
• Looking For Car Parts

This is a turn-key business that requires little work to administrate. There are no full-time employees of the company and most everything is automated. Bobby Newell is selling his company so that he can look after & grow another business. The website makes about $20,000 a month right now so this is a great asset to own. For more information on the how the website works and full financials please use the login information below:

Username: custone
Password: cust1815
http://www.jydonline.com/auction/

If you have any further questions regarding the company please call Bobby directly at +1-800-844-9440.

To Bid on this Company/Website please attend the DomainTools Live Auction. It will take place August 15th in Seattle during the last day of the Domain Roundtable. Bidders can also bid online. Please stay tuned for information on how to bid remotely.

Ron Jackson of DNJournal has published a preview article on the Domain Roundtable for this year’s event. Ron dives deep into what will be happening at the show and why domainers should be attending.

Ron is the most thorough reporter in the domain space. He goes into details that we haven’t even mentioned yet. I want to thank Ron for his coverage and to also let our readers know they should be reading his article.

Last year he wrote up a great post-show article that really captured the magic of the event. This year we have a lot more going on like the largest live domain auction in the world and more parties than any other domain conference. A total of four parties this year. There will be an official party every night of the event. TrafficZ will be hosting the largest party on Monday night at Sugar. Grassroots.org will be running a charity auction to paint bikini clad women at this party. The group of party goers that wins this competition will win some fun prizes.

On Tuesday, NameDrive is running a parallel room to the conference sessions that will feature poker and games all day long. Just in case you need a break from Networking in the Sessions you can Network in the Poker Room.

This is the one event of the year not to be missed. I will cover the other parties closer to the conference.

We have officially moved from our Bellevue office space to our new world headquarters in downtown Seattle. We are now at 5th Avenue and Blanchard Street a few blocks away from Marchex. The move will allow us to expand and hire more employees. It was not long ago that I worked out of my parents house and our first servers were in my parent’s garage on a DSL line. From there we moved into a house I purchased and we grew to 8 employees. That was until the City found out I was running a business out of my home and they gave me a month to find a new location for my business.

We were happy in our first commercial space for a number of years. It was so large and fit everyone but we kept growing and had to lease an additional space next door and double the office. The Bellevue office space had looked so large when we first began but when we passed 30 employees and there was no more office spaces to lease out we had to convert the conference room into a work space for the overflowing employees. I could not be happier that we are now in a new Seattle office space that looks large again. We only have 12 parking spots at the new office so we are providing bus passes to all the employees.

The building that we are in is the old Jones Radio building where Delilah had her studio for a number of years. We converted her studio “B” into a network operations room where we run our internal corporate servers. The few hundred servers that we have accumulated over the years have always been in the Westin Building (not to be confused with the Westin Hotel chain). So with this move we are now only 2 blocks a way from our servers. If we ever need to visit them it is just a short walk rather than a long car ride.

And the best part, we now have a donut shop across the street and about 50 other restaurants in a four block range. We moved in over the weekend so as you can imagine we are still catching up on email and support tickets from this weekend and today. So please excuse any tardiness in our responses as we get settled in.

If you ever stop by Seattle and want a tour of the office space let me know. Domainers are always welcome.

Tucows has acquired ItsYourDomain.com (an ICANN Accredited Registrar) for US$10.35 million in cash for IYD with the opportunity for IYD to realize a further US$1.05 million based on specific targets. The registrar is said to have around 700,000 domains under management. Our internal figures from Name Intelligence put it at 695,699 domains. I am sure there are some .NAME and .MOBI we are not counting (Our internal stats are only off by 4301 domains). This means Tucows paid about $16.29 per domain under management. ItsYourDomain does about US$7 million in yearly revenue and between US$1 and $2 million in adjusted net income. This means that each domain brings in about $1.42 to $2.85 in adjusted net income per year. ItsYourDomain sold for between 5.7X and 11.4X. We can average that and say it sold for 8.5X.

Stick with me here, it is about to get good. If the total Tucows ends up paying is $11,400,000 and we also know that ItsYourDomain has 0.728 percent of the marketshare. That would mean that all registrars combined are worth $1,565,934,065.93 ($1.5 Billion). ItsYourDomain is a good measuring stick because it is a reseller or wholesaler of domains. That is a registrar that does not offer a lot of extra services.

Registrars are worth a minimum of $1.5 B according to this sale. Network Solutions just sold for a rumored $900 Million and they only had about 6.6 Million domains. That would have put a value on all the registrars in the market at about $129,626,962,408.18 ($129 Trillion). Network Solutions is a retail registrar with some of the highest margins in the industry. So this is Apples and Oranges here but the ratio is 12:1000. I think Tucows got an excellent deal! If they can convert a few of these customers into higher margin customers they are doing a good thing. Everyone is likely to be raising their rates when Verisign adjusts there prices up in October. So that will be a good time to earn a little bit more from the ItsYourDomain customers.

If you look at this from the GoDaddy angle, Tucows would be willing to pay $317,696,703.30 for GoDaddy. I figure GoDaddy is worth at least $1 Billion. So Tucows got a 2/3 off deal on ItsYourDomain.

The founders of ItsYourDomain, James McKenzie & Ted Cucci, will be running their new venture Network Merchants. Tucows will also be a customer of the company. Tucows’ plans appear to be to integrate the entire company inside Tucows. Employees will be kept on for a transition period of 90 days and will then join the founder’s at their new venture.

Here is the Video of Elliot Noss (CEO of Tucows) talking about the purchase.

We are still working hard on the list of domains that are going to auction but I wanted to give everyone a preview of what is on the top of the list right now. So without further ado here is a link to the Top 200 List:

http://www.domaintools.com/live-auction/browse-domains.html

The list is changing and names are coming and going from the list right now, so please don’t panic if your domain is on the list today and gone tomorrow. It may still be in the top 450. This is only the top 200 of 450. The list will grow over the next two weeks to show the full 450 domains. If you are in the top 200 or plan to be in the top 450, please add some quick notes to the domain’s Note Field to let people know more about your domain.

Please note, we have added a Phone Number field in the control panel where you add names to the auction. Please update your phone number and allow us to call you if we have questions about your domain(s).

The list will be frozen and locked August 6th. No further changes will take place on that date.

We covered this story as it went up for sale earlier this year. The Wall Street Journal is reporting that the sale just happened. The final purchaser is R.H. Donnelley who bought Business.com to increase their influence of the Internet in the yellow-pages and white-pages business, which publishes paper and online directories in 28 states under the AT&T, Dex and Embarq names, among others.

The Dow Jones and the New York Times were both bidding on the company. The sale was expected to close between $300 to $400 million. So the price was right on target. Business.com currently brings in about $15 Million dollars a year in revenue. So the sale was 24 times earnings. This is a rather high price for a company but generally bigger companies sell for a higher multiple. 24X is very healthy. If a company is able to demonstrate $1 Million dollars in revenue that would make it worth about $24 Million according to these numbers. However, smaller companies sell for a smaller multiple. Generally between 8X to 15X. Now you can see why 24X looks so good for this company. One could argue it was the domain name that made it so valuable.

The parent company has revenues of $442 million and has a market capitalization of $9.67 Billion. R.H. Donnelley’s stock currently trades at nearly 22X their current revenue. This purchase is right in line with the value of their stock so it is a good purchase from my perspective.

Bret Fausett of Lextext has released a new blog about, what else, Domain Names. Another Domain Blog, I love it.

Bret’s new Blog is called Name Brief and he just posted a great article on Domain Clouds. That image in the upper left is a Domain Cloud. The blue box represents the primary brand, example in this case would be Google.com. The Red box represents alternate TLDs like dotnet or dotorg. A company may have registered all three: dotcom, dotnet, and dotorg back in the day (1999) to protect their brand. Yellow represents new TLDs (2000-2002) like dotinfo and dotbiz. The Domain Cloud continues to change over time and Bret explains that how Brands in 2002-2005 started protecting their ccTLDs if they are big enough (pink boxes).

But now companies are starting to protect those grey boxes too. Those represent misspellings of the primary domain. He explains that only a few of the registrations may be phishers and fraudsters (black boxes)…but those black boxes are the exception not the rule. Protecting all the grey boxes and registering those domains before someone else does seems to be more common in the Domain Cloud of today.

The layer of protection used to be just the Blue Box, but as time goes by the layers of protection for a good brand keep increasing. This is the first time I have seen this visualized so I think it is an extremely helpful post.

Visit Bret’s blog later today for a review of how typographical domains are affecting the small players and then Friday for “the prestige,” when he shows you why monetized typosquatting could be helping your business…and why, even if you disagree that those grey boxes are helpful, you need to start typosquatting yourself.

Read the full article rather than just my take on it. This is the year of Domain Blogs for sure. Domains are so much fun to talk about, I am sure this is just the beginning. I hope there are a million domain blogs soon.

In a private sale, NewYork.info was sold for $70,000 last week. Had this been NewYork.com this would have been a Million dollar sale.

It goes to show the power of the dotcom vs anything else. Other extensions don’t stack up so well when comparing sale value. The main reason behind this is the trillions of dollars that goes into advertising of the dotcom brand. Everybody knows what a dotcom is but not everyone knows about dotinfo. A lot of times when you operate a website at a Brand.net the visitors tell their friends to go visit Brand.com. We see that online poker companies realize this and they advertise the free version of their product at dotnet domains. They transition the traffic to the dotcom website that uses real money. It gets around a lot of laws that forbid the advertising of online gambling sites which use real money. Advertise dotnet, but expect people to type dotcom.

This has got to be a buyers market for dotinfo right now. I predict it will stay this way for a while but for sure not forever. After all, the New York Transit Authority’s official website is MTA.info. They could not get the dotcom so they got the next best thing dotinfo.

UPDATE: Wyvern LLC sold the site a year ago for about $35,000. This last transaction with a one year flip. Not bad, 100% return on money in a year.

Keith Malley thought that he would predict the future by registering The Simpsons Movie.com, which Fox would natural want. His hope was to cash in on how smart he was. He offered to sell the website to Fox for $50,000. His rational was pretty logical, if the movies makes a few million then what is $50,000 for the best domain name. What Keith did not realize is that this is an illegal practice. People are not allowed to register domain names which target a company or individual. Fox refused to pay the ransom demand and took the case to WIPO (The World Intellectual Property Organization). WIPO then ruled against Keith and ordered that the domain name be transferred to Fox.

The lesson to learn here is that while you might be able to predict the future and register the domain name of something that will happen, don’t expect to profit from it. Register generic domain names. For example, Summer Movies.com or Best Movies.com (I have not visited these sites yet). The rule in the domain industry is that if the domain is registered in “Bad Faith” then the owner can lose the domain. Keith Malley is now labeled a cybersquatter and that will actually hurt his case on any other domains that he is challenged on. Keith got off easy, there is a law on the books that allows Fox to sue for damages of up to $100,000. Keith would have looked pretty stupid had Fox sued. Fox has a great case and can actually still sue if they want. They did the quick thing and went through an ICANN UDRP procedure to get the domain name quickly. They have lost a lot of visitors that went to that domain name. I am sure they were confused to see Keith’s web page instead of information about the movie.

On a personal note, I can’t wait for the movie to open this Friday. Every industry in the world is affected by domain names, The Simpsons Movie.com is just another example of how everything will have a domain name in the future.

It seems to be raining Generic Domain Names over at our Live Domain Auction. Have you ever visited eHow.com? Why does such a good website have such a bad name? Simple answer - the guys over at How.com would not sell them their Generic Domain. This all changes August 15th. For $500K anyone can bid the reserve price of what is arguable the best “How” domain name in the world. A domain like this only gets sold once. Once it is bundled inside of a huge media company it is off the market permanently.
Prepare to be shocked and awed at the bidding in the room for this one. This is easily a $2,000,000 domain. Three simple letters that get typed into millions of web browsers every month. If a consumer saw this domain attached to a SERP result you can bet it would increase the percentage of people that would click through to the website.

To attend the live auction and or bid on the domain more information can be found at www.domainroundtable.com. It is also possible to bid online as well.