Good Morning Folks!!
I would love to give the details of the sale but by contract I am not allowed.
However if you read my past posts, the secrets of how I approach this are all
there. NOW maybe the industry will REJECT the 'X' factor. This was
CRAP introduced by the VC guys that has NOTHING TO DO WITH DOMAINS!!!!
If domainers want to be FOOLS and keep selling for 'X', I will keep
saying that domainers are leaving a FORTUNE on the table and don’t understand
the anatomy of a great domain name. Maybe this will blow the lid off all the
appraisals services. They are ALL WORTHLESS. Absolutely worthless. Not a single
one has a clue. Not a one and SCAM is usually the first thing that comes to
mind when I read a worthless appraisal that somebody actually paid for.
The
ireport.com sale shows that conventional valuations are fundamentally flawed as
they do not take into account the biggest part of what makes a domain name valuable.
When I say something like this, appraisers tilt their head like the RCA dog.
They react like I am talking a different language. So this is why I give no
credence to ANY domain appraisal service. They are ALL worthless and many are
slanted depending on their circumstance while others are pure rubbish. If
someone waives an appraisal in my face they get a laugh right back in their
face. It is like wearing a billboard that says, “I am a clueless rookie.”
To
come to a true value it would have to be by committee and that committee would
have to be made up of successful domainers as well as others. Without
discussing all the possible attributes of a domain name it is impossible to
come up with a value. Those buying and selling based on 'X' are
playing somebody else's game. Don't be foolish enough to swallow their silly
valuations. I have said this over and over for year after year and maybe since
some of these players have disappeared as fast as they appeared, maybe now
folks will take notice. Like I said, I have blog posts about it right here for
anyone willing to dig!
Now
I admit that ireport.com was a perfect storm. All the elements were in place
for a pretty big payday. However what the following years will show is this “Perfect
storm” will be repeated by me and others many times.
While
I can't go into the details of the negotiations, what I can say is it took
several months and the main sticking point at contract time was whether this
sale would be made public. Something for me that was non-negotiable. I would
have walked from the sale if I could not report and publicize it. If DNJournal
could not include it in their updates. The deals never reported would make
everyone here, think differently about their assets. Still, folks are more
focused on traffic and stats and 'X' than they are on what makes a
domain great and have value and have great value to others before that event
even materializes..
$750k
is a stepping stone. What it does is take what we do from theory to reality.
When we look back at this sale in 10 years, people will say it was cheap and
should have been sold for 10x that number. It's a stepping stone because
sometime soon it will be unusual for any good domain to sell for under 7
figures. Then 8 figures. We are entering the period of time where we will see
some significant domain sales. During this slow down or recession, it will be
the DOMAIN INDUSTRY that is the shining light on the hill. A place where great
fortunes can and will be made. Times like this fuel emerging growth and we are
more than emerging. We are busting out when everyone else is bailing out. We
are positioned very well and this rocky financial environment we are in will
benefit the domain industry more than any of us could do alone or collectively.
Have a GREAT day!
Rick
Schwartz
Rich Atkinson
you tell it – like it is, brother
Fran
Rick,
You cannot say that all the valuations are worthless.
Don’t forget you are one of the main voices of the domaining industry, your words count a lot…
Even for art that is 100% subjective there is a way to have valuations that are statisically accurate.
We all know this sale was an exception, in all his aspects.
I will repeat again:
It’s the conditions that set this incredible sale price, not the domain value.
Regards
Response by RS:
I can say it because I believe it to be true. Yes an exception, but present day valuations don’t know or understand how to factor that in the equation. Therefore, they are ALL worthless. And that is before I even dig to discredit their other benchmarks.
Deron - Creation Nation
Great post Rick.
I can see where Rick is coming from regarding appraisals being worthless. I also see where Fran is coming from with the statement,”It’s the conditions that set this incredible sale price, not the domain value.” …
…Now, that said, when you step back and read those two viewpoints, I think of them as saying the same exact thing really. It certainly IS the conditions that are part of setting the incredible values on a domain name, and isn’t each and every domain that exists today worthy and available of falling into some sort of”condition” to any given company, person or project out there? Who knows which one of us is sitting on the next”iReport,””Topix,” or”Tandberg” .com – to me those were domains I could see getting little valuation via appraisal but because they were important to SOMEone out there, and I dare even say essential, look at the final pricing those domains sold for.
To quote again:”It’s the conditions that set this incredible sale price, not the domain value.” – I see”conditions” and”value” as one in the same, which is where Rick comes from saying that appraisals can not take into affect the unknown (condition). And the unknown, as in this case (and many others) certainly added”$xxx,xxx” to the equation. Poin tme to the appraisal service that can offer that factor, please! :)
Disclaimer:
I am a fledgling domain noob who has been collecting domains I see of value for a few years now, up to 185 or so. I’ve read a lot of blogs by all the leaders of the industry, but even still, hopefully I’m not talking out my arse above :-).
Robert Haastrup-Timmi
I share Rick’s perspective entirely!
It amazes me that domainers are happy to value great assets based on crappy type-in traffic and paltry ppc income rather than understanding the actual development and market potential of a domain. Look at it this way, a venture capitalist gives you money to fund your business based on the”entire metrics” market size and what percentage your product or service is likely to capture. I honestly get the feeling a lot of domainers are very un-sophisticated, I’m sorry to upset anyone but that is how it comes across and perhaps that is why big media does not take this industry seriously. For instance one of my websites used to make on average $15,000 a month just for delivering about 300,000 monthly impressions without any click throughs! get the picture?
The fact is, if domainers keep on thinking small and do not present the entire market value proposition to wall street, rather than these puny ppc traffic figures then this industry will never grab big media and wall street attention. Afterall if my domain Carbmw.com for example could sell 10 BMW cars to interested buyers out of 500 annual clickthroughs, I’d be very stupid to sell that name based on some crappy appraisal of $2500.00.
Rick certainly know’s what he’s talking about from fundamental business experience, plus he’s been around more than most of us! You trounced the market once again Rick…well done!
Steve M.
How right you are, Rick.
Only ever sold one domain based on”X”…which was one too many.
Never again.
Michael Castello
IReport.com was a simple play between FoxNews (UReport)and CNN in my opinion. The future reporters are all of us with cell phones and cameras in hand. They are looking to the future and competing in their field. This scenario is playing out across the internet landscape.
IReport.com is not a generic domain name but it does take on a new life with CNN pushing it daily for some time. Rick was in the right place at the right time and did not settle for less then what he”KNEW” it was worth. Good for him.
uzma
I was very happy to see the sale. Needless to say you are a very successful domainer.
emil.king.net
Congrats Rick, well done job.
Cheers.
David Wrixon
I have to agree with you on the”X-Factor”. It is not the be and end all of valuation.
However, you have often said it is all about the Traffic. Perhaps it is time to admit that there are other considerations, and that some of these will apply especially to emerging markets.
Anyway, enough philosophy. Very warm congratulations on a very solid sale!
Response by RS:
Thank you.
It WAS about the traffic back in the 90’s. At that time it was just as easy to get a domain WITH traffic as one without. Plus there were domains with no traffic then that would eventually get traffic if you pick the right ones. So with all things equal, some folks would buy a”Brandable” domain earning nothing and pass up a generic domain earning $100/day. In 2000 25% of my domains got monthly traffic. Today those same domains and 90% get traffic. It’s all about predicting what folks will do and how they will behave as this medium evolves.
Lach
Rick.
I’ve always had trouble trusting anyone whose
moustache and beard were endlessly well
trimmed and connected. Not only that your mania
for caps seems like I’m being shouted at all the
time ….. BUT…
what in hell would we do without you ?
In ‘Domains 1.0’ your traffic message got the game
rolling, and although traffic or the rev X factor
always had an upper asymptote above which
valuation could only proceed with difficulty,
you got things moving.
Intrinsic worth could/should never be measured
by rev X, because it doesn’t have that limiting
upper asymptote.
With your inspired sale(s) and followup
messages one can hope that ‘Domains 2.0’,
the era of intrinsic worth valuation,
has now begun.
I’d choke if I include the term ‘king’, but
all hail to you, you really are remarkable.
David J Castello
You hit the nail on the head with this:
“To come to a true value it would have to be by committee and that committee would have to be made up of successful domainers as well as others.”
Yes, this would be the only type of appraisal that would have any crdibility. For a good laugh, check out the appraisers who still use the number of letters in a domain name in their methodology.
Gordon
Great post. At the end of the day, the name still needs to be good. MyReportersWorld.biz is worth nothing based on traffic and worth nothing based on most other factors too…
Charley
Rick,
Did you directly negotiate with the CEO/top level executives? Or did you contact via the whois ?
Thanks
David Wrixon
“Response by RS:
Thank you.
It WAS about the traffic back in the 90’s. At that time it was just as easy to get a domain WITH traffic as one without. Plus there were domains with no traffic then that would eventually get traffic if you pick the right ones. So with all things equal, some folks would buy a”Brandable” domain earning nothing and pass up a generic domain earning $100/day. In 2000 25% of my domains got monthly traffic. Today those same domains and 90% get traffic. It’s all about predicting what folks will do and how they will behave as this medium evolves.”
Absolutely correct. And the same pattern is now repeating itself with Unicode domains, except to score big for reg fee, you had to jump when there was no browser support and hence no chance of traffic. The traffic on Generics is now emerging. Dot Com seems to be way out in front of ccTLDs, but the race is not run yet, so there could still be some surprises along the way. But the lesson is people will type Generics into the address bar, regardless of culture, language or even script.
Anyway IDNers owe a debt of gratitude to those that pioneered the business concept, even if most of them where unable to extrapolate the concept into other languages.
Congratulations again on your victory here, because this a small victory for all of us!
Associated Domains
Glad you’re able to share whatever details you can re the negotiations. One brave and bold act that you did that hasn’t been called out yet is that you wanted to make this sale public during the contact negotiation process.
You’ve said plenty about and called for transparency in the industry. Your decision to make this sale public is a big one and is a step among many that will help bring transparency to the industry. Let every domain investor/domainer follow suite and call for all domain sales to be made public!
Alex
Rick said:…..”the main sticking point at contract time was whether this sale would be made public. Something for me that was non-negotiable.”
Rick, I take my hat off to you. If you were willing to walk away from the deal because the other party wanted to keep the monetary details private.
The existing problem with the valuation services in the market is that they are all self serving. I’ve written about how the domain industry is going through the wild wild west syndrome. There is chaos and lots of noise. What is required in the market is complete transparency. I firmly believe the first company that can deliver true buyers and sellers with all the information put forth will become the next electronic place of business.
Steven Emery
My portfolio just skyrocketed thanks to your sale and kick in the butt wake up and smell the coffee domain sermon. Alot of domainers are gonna eat well as a result of your preachings. I liked you statement”I can say it because I believe it to be true.” I said the same thing defending my vertical locator engine network when someone was telling me it had nothing to do with vertical search. True entrepreneurs and pioneers know from the gut what others cant even begin to fathom. We are truly all alone waiting for others to catch up. Keep tell’in it like it is, and how its gonna be. We founding domainers are all alone in a class all our own. Honors Brother.
owen frager
“True entrepreneurs and pioneers know from the gut what others cant even begin to fathom. We are truly all alone waiting for others to catch up. Keep tell’in it like it is, and how its gonna be.”
So true. Steven you inspired me today as Rick does everyday. The quote hanging over my desk says:
“To be nobody but yourself in a world that’s doing its best to make you somebody else, is to fight the hardest battle you are ever going to fight. Never stop fighting.”
There’s a certain loneliness to long distance thinking. I certainly understand.
http://www.rheingold.com/texts/tft/9.html
Nico Simon Princely
“Maybe this will blow the lid off all the appraisals services. They are ALL WORTHLESS. Absolutely worthless. Not a single one has a clue. Not a one and SCAM is usually the first thing that comes to mind when I read a worthless appraisal that somebody actually paid for.”
I have been saying this for years and almost every domain I have ever sold has I sold for 4-5 times what everyone else was saying it was worth.
Guy
Hi Rick,
not necessarily on this sale, as guess they did the running, but do you ever go after endusers?
Be interested to know and any tactics to employ.
Thanks
Guy
jason wright
The valuation that counts is the one a buyer is willing to sign a check for. How that is achieved is the ‘art’ of negotiation. Good on ya Rick.
Alex Simon
I can understand what you say Rick.
Negotiations are all different, and we must take into account who are we dealing with.
Recently I had a clearance sale on a domain forum. I sold over 50 domains for $35 each, but I hardly sold any domains. They were good, but needed the cash.
But, I put my names back, and after just a week I got an email for one of my domains. $1k offer. Currently I am still negotiating on it, and the buyer las time offered $2.500 and he seems to stick to this, so I will probably make the sale.
So, I will get almost 100 times more for a domain name, that nobody wanted in a public domain forum.
Considering that I have started in this business last March, with a total investment of $20 (yes, you read it right, $20 was all my money back then), I have to say that this industry is still a goldmine if you know where to look.
What could I have done with an appraisal? Nothing. It would have been worthless. But many domainers unfortunately guide themselves after different price guides and appraisals, so the market is surely influenced by them.
Many thanks for sticking that the sale will go public. This is really great for the industry, as many sales are kept private. Too many.
Chris Desouza
I don’t think there is any champion of the domain industry bigger than Rick. What surprises me though is that for all the talk and assertions the industry is still fragmented.
There is no real push to guide the industry towards consolidation and recognition like the Real Estate industry.
It is time we have a legal licensed domain bank, domain notes, domain brokers and agents with some form of local government affiliation.
If this happens, we can have real value credibility and return on investment.
I started this business late in the game with less than $100 budget. Last year I made almost $80k in sales.
I sent a personal email to Rick to thank him. Folks like him with their unrelenting tireless work to get attention to this industry elevate everyone’s assets to a degree.
My thanks to Rick for that.
Chris
Eric Ernst
All the above blogs have been enlightening to say the least. From my domain experience I agree with all who say valuations are subject to many factors. My frustration is”when will the industry giants (or least the big players in a niche industry” realize what we are all realizing.) Will is take years? will it ever happen? I think what Rick has done is helped speed up the process so”The Man” wakes up and sees what is actually going on with domains and the Internet. Rick has advertised the domain industry to the world for FREE for all of us.
I have been making my living online since 1997 and I can attest to the fact that traffic is neccessary yes, but it is the quality and targeting of the traffic that makes all the difference.
Successclick
Appraisals are definitely temporarily finite, subjective, and possibly ludicrous. What appraisal service could imagine that iReport.com would sell for $750k?
As a domain appraiser, I learned this the hard way years ago. Because of my past experiences, I adopted a different”appraisal” system, where I appraise domains for my clients at the”lowest” value for the domain. In other words, don’t sell for lower than my appraised pricing unless you’re desperate for cash. I don’t tell domainers how much money they can expect at the high end.
Bottom line, nobody knows how valuable a domain name is until the buyer submits their payment. However, there is a”minimum” value you should know to not sell below. My appraisals won’t”excite you”, but instead educate you on whether or not to sell for a certain price. The choice is ultimately yours. Every domainer has sold a domain for less than its full value. How they felt about the sale is their own business, and how the revenue from that sale helped them financially is also a different factor in assessing the overall strategy of the domainer. Sometimes selling a lot of domains for low prices to gain the cash is helpful in that domainer purchasing a higher premium domain (or paying off a mortgage).
What’s really great is everytime I turn on CNN, I get the mental image of Rick’s face and his ‘well-trimmed’ beard, with a big grin on it. And I actually feel proud to know that Rick’s accomplishment in this sale confirms all our efforts to learn this mysterious craft called”domaining”.
peace
Ira in L.A.
Since your writing on this story, site logs have become interesting reading. Very interesting, indeed.
domain appraisal
it is a great work please keep updating i wanna learn allot