It’s been a year since the MassiveNames.com site was developed.
Apologies for the lack of posts in the last 12 months. We’ve been busy on a range of projects and are now ready to update the blog more frequently.
In the meantime, you can refer to this list of domaining blogs to keep up with news in the domain name industry.
All aspiring internet entrepreneurs should read Jeremy Liew’s ‘Three ways to build an online media business to $50m in revenue’. The article was published in February 2007 but the essence of the message is still just as relevant today.
In summary, Jeremy shares an insight into what venture capitalists look for in online media businesses, examining the basic valuation models and citing companies currently in the marketplace to provide an idea of how big startup ventures need to become in order to be attractive to VCs.
The truth of the matter is that most companies which receive funding from venture capital firms have to be able to generate over US$50 million in revenues per year.
If that sounds like a lot, imagine the larger traffic numbers which your site will have to generate to translate into this revenue. Now, that’s a lot of eyeballs!
Just consider his simulation of 3 online media properties that are focused on different content categories and have different advertising rates (to reflect their vertical segments) based on US$ revenue per thousand pageviews.
In reality, it is almost impossible for startups to generate the amount of traffic required to make them viable to VCs and that may be why Jeremy has another article exploring the difficulties in building a media business to $50m in revenues.
Jeremy Liew is a Managing Director at Lightspeed Venture Partners. He invests primarily in the Internet and mobile sectors, with a particular interest in social media, commerce, gaming and methods for increasing monetization.
The domain name Area-Rugs.com just sold on Namejet for US$787 which seems like a real bargain compared to the stellar US$405,000 sale of AreaRugs.com last month. Is this really a good reflection of the relative values between hyphenated and non-hyphenated premium .com domains?
In this comparison, the value of the hyphenated version is not even 1% of the sale price for AreaRugs.com. In case you’re wondering, it’s only 0.194%. That’s right, 0.00194!
This figure seems particularly low. If we use this same ratio and apply it to the Hotel-Reservation.com US$209,916 sale, it would value HotelReservation.com at US$108,025,388!
The $787 for Area-Rugs.com is a fair price and only appears to be a steal compared to the $405k end-user price for AreaRugs.com.
Maybe it was the same buyer that picked it up - after all, what’s another 700 bucks when you’ve just spent 400 grand.
QuinStreet Inc, a privately held company, has recently spent over US$34 million to purchase Insure.com ($16 million) and Internet.com ($18 million).
A lot of people not have heard of QuinStreet but they’ve been around since 1999 and have grown their revenue to over US$250 million a year by being “The Leader in Vertical Media and Marketing Online”.
The highlights from their 2009 Financial Results are impressive:
Former Senator Bill Bradley is on QuinStreet’s Board of Directors, as is Greg Sands from Sutter Hill Ventures, Jim Simons from Split Rock Partners, Glenn Solomon from GGV Capital, Dana Stalder from Matrix Partners and Doug Valenti, Chairman and CEO.
There’s an article in FoxNews.com titled “Ex-Sen. Bill Bradley Sits on Board of Major Spamming Firm” which suggests that QuinStreet has been “identified as a major spamming firm by anti-spam organizations such as www.stop-spam.org and www.spamsuite.com.”
But the same article dated 24th April 2009 also states that they “posted revenues of nearly $8 million last year” which does not appear to be accurate.
Here’s QuinStreet’s recent press release about their “Record Fiscal Year 2009 Financial Results”:
Foster City, CA (PRWEB) August 17, 2009 — QuinStreet, Inc., the leader in vertical media and marketing online, announced revenues of $261 million and EBITDA of $57 million for its fiscal year ended June 30, 2009. This represents a 36% increase in revenues over 2008 and a 57% increase in EBITDA.
QuinStreet is a privately held company that has grown rapidly since launching its business in late 2000. It has been consistently profitable since reaching breakeven in 2002. The July 2008 to June 2009 period was no exception, despite the economic recession.
“We are more excited than ever about our long-term market opportunity to continue to help clients benefit from targeted, measured marketing on the Internet, and eventually in all digitized media,” QuinStreet CEO, Doug Valenti stated. “Our vertical focus and scale allow us to deliver higher quality results in larger quantities than any other channel or source. Clients are responding by giving us more budget. Achieving record results in fiscal 2009 did not prevent us from making record investments in future capabilities.”
Continued profitability allows QuinStreet to better serve its clients by investing in expanded media reach, and technologies and other capabilities that grow client return-on-investment and yield. QuinStreet’s approach allows the Internet marketing leader to provide its clients with the most cost-effective results and large volumes of new prospects and customers.
“This past year we delivered one of the highest top-line growth rates across the technology sector, the result of our growing depth in existing verticals and our expansion into new ones,” commented Kenneth Hahn, QuinStreet’s CFO.
QuinStreet President, Bronwyn Syiek added, “Our clients report that we consistently provide the lowest cost of customer acquisition at scale for their businesses. Essentially, we have become their cheapest revenue source.”
About QuinStreet, Inc.
QuinStreet, Inc. has been the leader in vertical media and marketing online since 1999, consistently delivering the right leads at the right volume to thousands of industry-leading clients.
Insure.com Inc (Nasdaq: NSUR) announced that it has sold the domain name Insure.com to QuinStreet Inc for US$16 million and will be changing its corporate name to Life Quotes, Inc.
This transaction has been reported to be the Highest Domain Sale Recorded but it doesn’t seem to be a domain-only sale as Insure.com is developed and there are “related media assets” included in the deal.
However you look at it, it’s still great news for the domain name industry.
Why Did They Sell?
It is shocking to hear that a public company would sell its corporate brand name especially since it’s such a gem of a name. It really makes you wonder what’s going on behind the scenes to motivate this move.
Surely, this isn’t another case of “they don’t get it” as they demonstrated back in 2001 by buying the domain for US$1.6 million. And they don’t seem to have cash flow problems either as they have no debt and US$24 million of cash and investments. So, what’s going ?
It would be easy to dismiss this as a bad management decision on the basis that the corporate rebranding and brand damage caused by the name change may cost more than the receipts from the sale. However, it is quite likely that they know what they’re doing if they had the foresight to invest in the name back in 2001.
Insure.com might be a beautiful domain and brand name, but in these turbulent times, maybe it’s just better to hold US$16 million of cash in hand and be ready for opportunities that arise from the current financial crisis.
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