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Oversee.net gets $150,000,000
January 15th, 2008 by 
Jay Westerdal
Oversee.net
announced today that it has executed a definitive agreement with Oak Hill Capital Partners, a private equity firm, for an investment of $150 million in Oversee.net’s holding company. Specific terms of the transaction were not disclosed.
The funds will be used to augment organic growth and acquire technologies that will enhance its suite of services in the online marketing and domain name industries. Oversee’s DomainSponsor will continue investing in technologies that monetize domain traffic. In 2007, Oversee moved assertively to build its domain name auction and related services capability, in part through the acquisitions of SnapNames and Moniker. The company will continue to evaluate acquisitions that extend its overall capabilities.
“Oak Hill understands that the online marketing, traffic and domain name sectors are rapidly growing, and they share our vision for establishing Oversee as a leading, trusted partner for domain owners and advertisers,” said Oversee.net co-founder and CEO Lawrence Ng. “Their commitment and support will add fuel for organic growth and will help us capitalize on opportunities to broaden our capabilities.”
Robert Morse, a Partner at Oak Hill Capital Partners, added, “Oversee is an innovative company which we believe is well positioned for growth over the coming years. We’re looking forward to working with Lawrence and his talented team as they play a leadership role in this dynamic industry.”
The transaction is expected to close by the end of January 2008.
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38 Comments »
January 15th, 2008 at 11:03 pm
Is this the tip of the domain iceberg that will pop the domain bubble?
January 16th, 2008 at 1:03 am
This is not the tip of any iceberg or domain bubble. What this strongly suggests is the VC industry is starting to recognize a new investment asset class that has remained benign for several years now. If you are a domain investor holding a credible portfolio of domain names, you are now about to join unknowingly, an elite class of land owners online for the next several decades throughout this century. Unfortunately most people domainers included have very little understanding or a parochial view of “why the world is now flat” and why the internet has changed and disrupted everything forever!
If you understand wave cycles and how new industries emerge over time, then you can clearly see where I’m coming from. Kindly read my article on “Why Domains are the Best Investment for your Future” http://trendirama.com/component/option,com_alphacontent/Itemid,68/section,4/cat,19/task,view/id,34/ to see if you share my futuristic perspective on where we are ultimately heading, and why everything online starts with a domain, hence the value. I’ll leave you with one thought! just think how much on average it costs to start a conventional bricks and mortar business anywhere in the western world and you start to see that most domains today are peanuts by comparison to what they will be worth in 10 years time. No wonder why kevin Ham is laughing all the way to the bank!
January 16th, 2008 at 6:38 am
It’s a company with real assets and customers, not a web 2.0 newbie company…
Nuno Oliveira
CentralDomain.com
January 16th, 2008 at 7:28 am
What real assets do these companies hold? I assume offices, servers etc. but how can a virtual item be considered an asset, I have a business degree and virtual items are not considered items.
January 16th, 2008 at 8:35 am
I would argue that intellectual property is a real asset. The valuation of domain name assets may be harder to determine than bricks-and-mortar assets that have comparable and current market values.
= TiKi =
January 16th, 2008 at 10:41 am
Domains are far too often compared to land and property. A domain is an address, just like the numbers on a business or residence.
January 16th, 2008 at 11:21 am
A domain is NOT merely an address. You don’t type in a number in your browser bar, you type in the domain NAME. Where it is located on the web is irrelevent; what it says is what’s valuable. Whether it is inherent value (generic domain names with type-in traffic) or branded/brandable value (like a trademark), domain names are valuable.
Assets are, by definition, things with economic value. Therefore, domain names are assets. And now the investment community is realizing this…exciting times for domainers!
Sandy Brooks
DomainTaxGuide.com
January 16th, 2008 at 1:31 pm
A business based on dumb customers is not likely to last long. No experienced Internet user types in .com, they use real search engines and get real results. If users liked parking pages the parking companies wouldn’t have to keep making new landing pages to masquerade as a real website with real information. Once developing countries are developed and aging grandmothers are replaced with savvy baby boomers the parking business will slowly diminish. Good generic domains will always be worth more than face value, but if maximum profits are your goal, now is the time to sell.
January 16th, 2008 at 1:32 pm
Looks like Wordpress strips out everything between less than and greater than signs (> and <). That should read (query).com.
January 17th, 2008 at 5:13 am
It all depends on the domain name; a few great generics will work as type-ins, most domains will not–at least this is what I have discovered over the past few months.
Another factor: some browsers will take the searcher directly to the dot-com, although Explorer does not.
I know this is a cliche, but a good brandable and clever dot-com (and sometimes dot-net and dot-org) domain can be developed into a high traffic site as evidenced by myspace.com
; the name itself is not a direct navigation domain, but it’s a great domain that is directly related to what it is.
In other words, it’s not a “nonsense” word.
I agree with HBaker in that searchers will tire of parking pages–I say this as a domainer who has some significant parking pages, so this is not a sour grapes statement. I would love for my parking platforms to do better, but then I have to ask myself: How do I react when I, as a searcher, land on a parking page?
Irritated.
If I could jump into a wayback machine, I would invest in great aftermarket domains and develop them. It takes money to make money.
Best,
Ms Domainer
January 17th, 2008 at 5:25 am
HBaker,
You may be under estimating the number of dumb AND experienced internet users. Age does not bring intelligence. Otherwise, there would be no such thing as an old fool. There are a suprising number folks who just don’t want to know any of the details.
Computer manufacturers still get millions of support calls reporting that their computer is broken when their customer visits a website that is down.
Many people cannot seperate in their minds the difference between hardware, software, internet service, email, websites, search engines, websites, natural vs sponsored listings, address bars, toolbars and web forms. They just simplify it in their minds to “my computer”.
I would estimate that 90% or more of the folks on the internet do not have a grasp of the mere basics of Windows, OS-X or whatever their operating system is.
I have personally provided tech support for thousands of folks and have yet to meet a single person that is even aware that there is a section in Windows help titled “Windows Basics”. Even after making them aware of this feature less than 1% will even bother to go their and look at it. They just don’t want to be bothered.
Then there are those internet users who are savvy enough to know that not every website in the world is in the search engines index. Those savvy folks will certainly be among the type-in traffic.
Personally I think that the “real estate” analogy is an excellent one. What gives real estate it’s value is it’s location. With the web a domain name is sort of like the street name.
Real property, in a good location, will have lots of traffic and plenty of commercial value. A website with a good domain name will have lots of traffic and plenty of commercial value. In both scenarios you can take undeveloped property and develop it to dramatically increase it’s value.
If you continue this analogy you can see that if you develop “real” property in a bad location, or “virtual” property with a bad name, you will likely see poor results.
Build a parking lot on a good location with lots of traffic (i.e. downtown area) get plenty of revenue. Park a good domain with lots of traffic you also get plenty of revenue. If you build something nice and appropriate for the location/name, you likely will not only increase the value of your property but also the properties adjacent to yours.
As you can see it’s very easy to go on and on with this analogy. I find the similarities fascinating.
January 17th, 2008 at 7:26 am
donburk: Excellent analogy! The better the domain name and extension, the better the revenue potential and intellectual property value.
HBaker: With all due respect, they don’t teach this stuff in business college … at least not yet.
= TiKi =
January 17th, 2008 at 3:01 pm
I’ve always found it hard to argue with someone who is rich. NOT by inheritance, but serendipity. But every cell in my too-many-years “trained” business-brain says that this whole area of Domain Name trading is “impossible”.
I cannot see the value/logic in the whole area.
On two grounds:
1. The ever-increasing intelligence of Yahoo, Google etc. in helping you find ANYTHING through ever-smarter algorithm technology. Their very existence depends on “click-on this”, not “type a name in”.
2. The “click-on this” absolute logic of this real example:
my Sister – a technophobe – sending me an email passed to her from someone else with a clickable URL that came from a specific interest Bulletin Board……..
At the end of the day, what miniscule proportion of traffic to any site could possibly come from somebody actually typing in a Domain Name? Much less one with an obscure (AND ignored by Browsers) suffix of .biz.ru or whatever?
I AM trying to understand it, folks, any enlightenment pointers most welcome. I’d like to get in on it, too!
January 17th, 2008 at 7:07 pm
Well, himagain,
I own Monster Highway. Monster Highway sits on one of my leased Apache web servers which has several IP addresses. And the MonsterHighway.com
website shares an IP with several other sites.
Now, when I built the site, I could have used one IP just for it and advertised it with just that IP address. That numeric address is hard to remember though so I bought a domain name. When I bought the domains for those sites I could have bought any old domain but I wanted something that is memorable and fit the theme of the site. so MonsterHighway.com
was much more valuable than a domain such as checkthese.com
or wytres2765e.com
or even an IP address would be.
And since I had several sites with domain names I could easily share a IP on my server with all of them and most people would never know. So here’s the start of the value of a domain.
1-I wanted it. 2-it’s easy to remember. 3-I can run multiple websites on one IP. 4-A new visitor finds it from a search engine and it has a name he can remember and mention verbally to his friends who might be interested in the same content. 5-Radio and Public Address mentions are fleeting so a memorable name followed by dot com helps people who hear the domain retain it long enough to get to a computer if they want to look it up.
And after several years of operation the domains have a standing in the niche they serve. There’s consistant, constant traffic to those domains. Much of that traffic is from search engine referals but a good bit is repeat traffic and word of mouth.
So here’s were the greater value begins. When someone wants to start or expand a business and they desire a web presence. And that presence happens to fit nicely with my Monster Highway domains. And the potential buyers value the present traffic and want to make a sizable offer. I take it or make a counter offer that they then accept……
And I retire to the Cayman Islands!!! Hee Hee.
And here’s another good point. Most of the Monster Truck teams I know of have a decent website of some sort and a domain name that fits in with their truck. So I’m trying to get most of them to see the domain they own as very valuable property. Kids go to Monster Jam on Saturday and on Sunday they’ve looked up all the trucks that were there and a few others and they found them from seeing the domain on the truck or hearing it over the public address system. And they talk Mom or Dad into buying something (souvenirs items mostly) from the site.
Those names get more valuable everyday. And when they sell a truck or team I’m trying to get them to see the name as another business asset to sell with the truck. This is the fundamental reason for value in any certain domain name. It’s memorable and has a perceptible worth.
And there are domains in the hands of domainers right now that will either be built into a great website or sold to someone who sees the value in that domain over an IP address, checkthese.com
or even wytres2765e.com
.
As domainers we try to find domains that fit what we think someone else might want. It’s a plus if they have type-in traffic we can monetize and a bigger plus if we like the theme behind the domain enough to develope a site around it ourselves.
January 17th, 2008 at 7:31 pm
I think everybody will agree that a domain name is more remember than an IP address. The matter at hand is “generic” domains. Youtube, Myspace, Digg, Wikipedia, and all the other “Web 2.0″ websites have unique, non-generic domains, yet they are also memorable. I just quickly glacsed through Alexa’s top 100 websites. Only two, Apple.com
and Adobe.com
have generic domains. These are obscure words, advertising wise, and I have no doubt neither of them get “type in” traffic from people looking for apples and adobe.
January 17th, 2008 at 11:17 pm
For himagain “At the end of the day, what miniscule proportion of traffic to any site could possibly come from somebody actually typing in a Domain Name? Much less one with an obscure (AND ignored by Browsers) suffix of .biz.ru or whatever?”
Let me try to assist (if I can) … I have around 17(give or take a few) generic “type in domains” that generate on an “average” of 35 hits per day each (when combined as a whole – some get 10 hits some get 50 hits etc…) so… when you add the numbers: 35 X 17 = 595 hits per day and from there I usually get whats called a “CTR” click through ratio of 45 percent = 268 (rounding up) click throughs on my ads (all sites are parked or mfa (made for adsense) sites) and my cpc (cost per click) that I get paid averages in at .60 cents per click for a total PER DAY revenue stream of $161.00 (avg up).
This is passive income and I do not need to “SEO” my sites nor do I have to advertise or depend on Search Engine Technologies/Search Engines for my traffic… all traffic is consumer driven and all domains are generic “type in” domains.
Generics do drive traffic because some consumers think like consumers..not like “techie’s” or domainers…and most really don’t care about search engine technology they just want to find what their looking for and the “faster” the better…thus the “type ins”.
P.S. the numbers above are the exception and not the rule with my “generics”. I have around 70 type in domains and the majority only generate on an average of around .20 cents to $3.00 per day. Those above are some of my best one’s.
Hoped that helped.
January 19th, 2008 at 9:12 am
Good content will slowly build traffic on a non-generic (but memorable) domain.
Last August, I regged MsDomainer.com
because MsDomain.com
was not available (which is what I really wanted for my alias, but that’s life, and one moves on). It felt “memorable” to me–even Frank Schilling referred to Mr and Ms Domainer on his blog (without knowing that a Ms Domainer already existed.)
Well, lo and behold, last month MsDomain.com
became available on the aftermarket, and I felt that I had to try and get it (defensive move), if for no other reason than to protect my new alias. Someone regging it and setting up a new blog with “Ms Domain” as an alias would have seriously impacted my own alias for which I’m trying to build traffic.
So I did get it and have redirected it to my blog with a disclaimer that my blog isn’t associated with the .ms folks or Microsoft (MS).
However, at this point, I think I’ll keep Ms Domainer. I’m used to it.
Best, Ms Domainer
January 19th, 2008 at 11:11 am
Don’t give up the MSDomainer blog at this point. What I’d do is put some slightly different but “domain type” content on MSDomain then put a link there to the MSDomainer blog itself.
You could even do a http reload on it like I’ve done for a couple of my domains that actually target a certain site. If they don’t click something in a short time period (I use 2 mins. on mine) they wind up where they probably want to go anyway.
One of these days (I keep saying that more and more) I’ll have some good content and links on each domain but they’ll both redirect to the web board which is the actual focus of either domain. Right now it’s the same page on each domain.
January 19th, 2008 at 11:35 am
spambait85738,
I have thought about creating another blog as well.
I’ll see how this goes for now.
Thanks!
Ms Domainer
January 19th, 2008 at 7:37 pm
HBaker,
Three of the four non-generics you mention are actually two word generics:
You Tube
My Space
Wiki Pedia
The other one is a variant based on generic terms:
Digg is a stylized variant of the slang version of the word dig when used as a verb.
These are excellent examples of how you can combine two generic words, or stylize a common generic to create a brandable name.
I must have a different alexa list then you. On my alexa list I see that six of the top 10 are one or two word generics:
1. Yahoo
3. YouTube
4. Live
6. MySpace
7. FaceBook
9. WikiPedia
Number 2 on Alexa’s list is Google. Google is a play on the word googol.
Of the three remaining top 10 one is an acronym:
5. MSN
One is a generic word combined with a number that creates a pop expression phrase:
8. Hi5
Only one out of the top 10 is a totally made up word:
10. Orkut
When you look at the top 100 you will find 36 that are one, two or three english word generics. There may be more but I could not say about the foreign language sites.
I would classify 31 as stylized variants of slang or generic words.
Eight domains appeared to be acronyms, 10 were foreign languages. There were a few short number/letter combos but only four appeared to me to be totally made-up words.
Orkut
Badoo
Mozilla
Badongo
Besides type-in traffic, brandability is a definite factor in determining the value of a domain. Easy to remember and easy to spell are major factors as well.
January 19th, 2008 at 7:48 pm
After a little more research I discovered that Orkut is actually the first name of the Turkish Google employee that created the service:
Orkut Büyükkökten
January 20th, 2008 at 12:30 am
I was delighted by the news that Rick Schwartz just completed the sale of iReport.com
to Cable News Network (CNN) for $750,000. I look forward to a post from Jay and responses from the DT community on the implications of this sale for other domain name investors.
= TiKi =
January 20th, 2008 at 4:37 am
intersting…
teknoloji
January 20th, 2008 at 4:38 am
intersting…
teknoloji
January 20th, 2008 at 7:33 am
The ireport.com
sale is good news in that the buyer (CNN) is an end user. It seems to me that most domain sales these days are to other domainers, who then promptly park the name. Once more end-users begin buying domains and developing them, that will be good news indeed.
Also, lately I’m seeing valuable domains that don’t even resolve into anything. I understand for-profit parking, but nothing?
I don’t get that.
Ms Domainer
January 20th, 2008 at 4:37 pm
Real assets like you mentioned (and not just offices or servers), but especially customers that bring sustained revenue year after year. I’m not a big domainer and I alone have spent many thousands with them (through their acquired Moniker and Snapnames).
It’s not a new company with no business model.
Nuno Oliveira
CentralDomain.com
January 22nd, 2008 at 9:52 pm
How can this be good?
a pitiful pile of filth that is the king of all tasters. Using the 5 days to screw the public.
Except for quote DOMAINERS unquote, ie. DOMAIN PIRATES
Isn’t snapnames associated with oregonnames.com
The public ,,,, and the internet was for the public … remember, is being screwed over royally by DOMAINERS profiting off the public
BAH screw you all!
And you had the nerve to condemn networksolutions
hah, because you couldn’t profit from it
right?
RIGHT?
damn domainers
January 23rd, 2008 at 5:06 am
Easyspace Ltd. has provided a website facility to a fugitive who is wanted in Canada on a Canada wide arrest warrant and who is also a Convict in UK with criminal record of two years sentence to continue with his criminal activities of Criminal Harassment, Intimidating Witnesses, Obstruction of Justice, Extortion and Impersonation.
January 23rd, 2008 at 10:27 am
So if that small name gets $150M ..I kept on holding to CHAT.NU
(Now) …means I stand to win a jackpot of what $1 Billion?? Fat wish huh!
Azrin @ http://www.kedai.tv
January 23rd, 2008 at 3:18 pm
donburk: Two word generics are not generic. You.tld
is a generic domain, tube.tld
is a generic domain, but once they are meshed together they cease being generic. It’s like News.tld
is generic, and so is Corp.tld
is generic, but NewsCorp.tld
is certainly not generic. Google.tld
could mean “Go Ogle”.
January 23rd, 2008 at 4:59 pm
Blue Stripe is a generic term ain’t it? Hee Hee
January 23rd, 2008 at 6:45 pm
‘Two word generics are not generic.’
I agree that, new words “coined” by joining two generic words may no longer be generic, e.g. youtube. However, I would argue that compound words (made up of two or more words) can still be generic if they are defined and recognized in common usage, e.g. salmonfarm.
= TiKi =
P.S. Has anyone heard anything further about the DomainTools (generic with brand recognition) auction next month?
September 1st, 2008 at 8:15 pm
Jessie…
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