DomainTools Blog

Watch out world, Name Media is going public. They will raise $172.5 million in an initial public offering of common stock.

Since they started everything off with the acquisition of the BuyDomains.com in February 2005, Name Media has completed eight acquisitions of businesses and technologies and one acquisition of a large, premium domain name portfolio (I reveal the domains below) . Aggregate cost for these acquisitions was approximately $62.5 million. Here are some of the acquisitions I found documented in the S-1 filing with the Government.

Name Media quoted the first 3 quarters of 2007 in their S-1. So I have estimated some numbers above based on the fact they have one more quarter to go.

Premium Domain Name Portfolio was acquired in December 2006, it was approximately 40 domain names from an unrelated third-party for cash consideration of approximately $13.5 million. The acquisition was funded with the proceeds of our debt financing. Approximately half of these names are being held for development as premium enthusiast websites. The remainder are included in registration rights available for sale. The average cost per domain came out to be $337,500.I wonder what these domains are…. I think I have to go look at the DNS transactions for that time period and scan for generics. Here is what I believe the 40 domains are:

BuyDomains.com (RareNames LLC) was acquired on February 22, 2005 for $72,500,000 in cash and 750,000 shares of Series Z Stock. Total Value is about $80,600,000.

GoldKey.com, LLC was acquired on March 16, 2006, for $2,387,000. Terms of the acquisition also provide for a future purchase payment, not to exceed $500,000 contingent upon achieving certain financial milestones.

Morefocus Group, Inc. was acquired on July 28, 2006, for $1,084,000.

Dave’s Garden was acquired on January 11, 2007 for $3,500,000.

Photo.net was acquired on April 11, 2007 for $6,000,000.

Afternic, Inc. was acquired on November 3, 2006, for $3,726,000. Terms of the acquisition also provide for future purchase payments, not to exceed $1,550,000 contingent upon achieving certain financial milestones.

SmartName, LLC was acquired on September 2006, for approximately $16.5 million. In 2004, the company received $4,109,367 in revenue from Yahoo. It collectively had a 71% profit share with parkers and it kept $1,172,017. In 2005, the revenue share decreased to parkers, 67%, but the revenue collected from Yahoo was $10,557,298, so it kept $3,471,229. By taking the first 6 months of revenue we can extrapolate that Smartname made $22,132,724 in 2006 and revenue share of 71% with parkers so they made a total of $6,286,992.

Visionary Networks, Inc was acquired on January 2007, which provides an online community in astrology and other related subjects. The purchase price of the acquisition was approximately $14.1 million. Terms of the acquisition also provide for future purchase payments, not to exceed $7.5 million, contingent upon achieving certain financial milestones for the years ended December 31, 2007 and 2008.

Overall it looks like a good portfolio of assets and I am looking to get more information! A lot of this information was confidential and locked away. Now that they are going public they are releasing the nuggets and everyone in our industry is reading the S-1 carefully. Name Media has come a long way since it bought Mike Mann’s company. It seems they are forced to go public because they need to repay the debt they have accumulated by September of next year.

Michelle Miller joins Name.com as their new Chief Operating Officer. Bill Muskin is the current CEO of Name.com and has a lot to say about the deal. Michelle was also the former COO of BuyDomains before she helped sell it to NameMedia two years ago for a reported $65+ Million. Michelle was instrumental in building the value at her former company and will be working on a lot of new ideas for Name.com in the future.

Name.com is in an excellent starting point for Michelle to start her work, they have several hundred thousand domains under management and thousands of customers. With the influx of new ideas that she will bring to the company they expect to take the sleepy registrar and turn it around into a juggernaut. Name.com is arguably the second best domain name for our industry right behind Dotster’s Domain.com. The domain Name.com has more intrinsic value because it is so general. If a domain ever gets replaced with another name it will still be called a name. A name will always be called a name no matter if they are selling domain names, URL names, or ID names.

However Name.com is hard to find in Google organically, for the query “Name” they appear 5th. Name.com is a brand that is hard to market because it is so generic. The secret they have is that it is easy to remember and easy to share virally.

Today is the last day for Michael Collins of Afternic. Michael and his brother bought the struggling brand from Register.com in 2002 for an rumored $500,000. The two brothers didn’t buy the company, they just bought the brand. They had to rewrite the software that powered the site and even the logo that people had grown to love. Register.com had purchased the company two years earlier for $48 million in cash and stock. Ouch. Bad deal for Register.com, but a good deal for the Collins brothers.  They worked hard on the site and turned the already established brand back into an after market clearing house for domain names. Then last year in 2006,  they sold the company to Name Media for a rumored $5 Million. Not a bad return on investment.

Afternic has a long history.  A forgotten fact is they were once involved in a lawsuit with ICANN because in the fall of 1999 ICANN refused to grant them an accreditation on the grounds that Afternic’s auctions violated its standards. The standards forbid registering another company’s or person’s name with the intent to demand “a ransom” from the company or person. The lawsuit was settled when Afternic agreed with ICANN that a separate company could be accredited. Fast forward to 2006 and ICANN had no problem accrediting the company – the views on things definitely change over time at ICANN.

Roger Collins, Michael’s brother, will remain at the Name Media and help run Afternic. Meanwhile Michael plans to pursue a new career in retail automobile after market sales. “Used Car Salesman” has got a bad rap in the media, but the next time you buy a used car, just think that it is not that different from buying a used domain name. However, a domain name is an appreciating asset while most cars are depreciating assets.