He's getting $155.2 million in cash for his domains...

[ExYahoo]

It appears that "Yun Ye" of UltSearch is cashing in some of his domains:

The largest domain transaction of all time was announced today (Nov. 23, 2004). Seattle based Marchex, Inc. said they have reached an agreement to buy a portfolio containing tens of thousands of domains from Name Development Inc. in a deal worth just over $164 million.

Name Development appears to be a corporate entity holding domains owned by Yun Ye's Ultimate Search, a pioneering company in the pay per click (PPC) field. Marchex said the deal is expected to be finalized in the first quarter of 2005.

http://www.marchex.com/press.html#news14

SEATTLE, WA - November 23, 2004 - Marchex, Inc. (NASDAQ: MCHX), a provider of technology-based merchant services that facilitate and drive growth in online transactions, today announced that it has signed a definitive agreement to acquire certain assets of Name Development Ltd., a corporation operating in the direct navigation market, for $164.2 million, including $155.2 million in cash and $9 million in stock...

Yun Ye/UltSearch (Ultimate Search) is the well know pioneer who receives a multi-million dollar yearly income from Pay Per Clicks of the ex-expired domains he registers.

Clearly the market is still hot and the cashflow superb, otherwise why would this firm pay ONE HUNDRED AND FIFTY FIVE MILLION DOLLARS in CASH for a bunch of domains?

And even then the implication is that Yun Ye has not sold all of his domains, just a number of them.

[D MARKS]

WOW

This hopefully will get some great coverage

[DaddyHalbucks]

$155,200,000 cash divided by
100,000 domains
++++++++++++++++

= $1552 per domain

[trader]

Originally Posted by DaddyHalbucks

$155,200,000 cash divided by
100,000 domains ++++++++++++++++ = $1552 per domain

Also see this thread re the new DNJournal.com - which surprisingly has not received much feedback yet at the forum?

http://www.dnforum.com/f60/sedo-puts-3-des-dnjournals-new-top-10-including-weeks-1-domain-thread-73044.html

[DaddyHalbucks]

So, how does that work, tax wise? Keep title to the domains in an offshore corp, have that corp "sell" them, then keep the money offshore and tax free? SLICK!

[Chaiki]

I am seriously starting to think something is not quite right. Maybe he's ot really getting this much or MCHX is just feeling the deal out and will then later pay the break-up fee and walk. Just food for thought but could this deal have some other unpublished elements at play? Remember beauty.cc

[trader]

Originally Posted by Chaiki

I am seriously starting to think something is not quite right. Maybe he's ot really getting this much or MCHX is just feeling the deal out and will then later pay the break-up fee and walk. Just food for thought but could this deal have some other unpublished elements at play? Remember beauty.cc

After analyzing the figures I am sure the price is reasonable based on a combination of the traffic and price. In fact, the price could even be on the low side if many of the names are well targeted traffic and the domain value itself is even more than its traffic value perhaps due to the keywords being so good.

[online]

wooow

[FineE]

Originally Posted by Chaiki

I am seriously starting to think something is not quite right. Maybe he's ot really getting this much or MCHX is just feeling the deal out and will then later pay the break-up fee and walk. Just food for thought but could this deal have some other unpublished elements at play? Remember beauty.cc

My understanding is that DNJournal.com takes considerable care to to verify sales. Also the buyer is a US publicly traded company traded on the NASDAQ, so this sale looks real.

This sale is sure interesting they are paying $164.2 million for about 17 million unique visitors a month or 204 million unique visitors a year over thousands of keywords some valuable some not. It puts a price on what a website is worth with "average traffic"

[LoanShark]

Are those domain developed or just plain undevelope domain?
The seller must be very rich......

[DaddyHalbucks]

Chaiki wrote:

I am seriously starting to think something is not quite right. Maybe he's ot really getting this much or MCHX is just feeling the deal out and will then later pay the break-up fee and walk. Just food for thought but could this deal have some other unpublished elements at play? Remember beauty.cc
++++++++++++++++++++

Perhaps.

A break up fee of $1.5 million for ~6 months of traffic means that the traffic is only worth $3.0 million a year, if we can assume that the seller's costs are being covered.

Or, the seller has a high degree of certainty that the deal is going thru, and/ or the price is so great that it is worth a relatively small possible risk/ loss to try and consumate it.

Who would pay a lump sum of $155 million to acquire an annual traffic stream worth only $3.0 million? That seems pricey. There must be a better valuation, or big upside somewhere for the buyer.

It could be a great way for the buyer to buy some massive short term traffic to launch a major project, ie., get a free look by promising the moon, and then pay the break up fee, but that is just pure speculation on my part.

All this said, my feeling is Yun Ye will come out on top. He is obviously a smart guy.

[Fearless]

This reminds me of something we did in elementary school. The teacher whispered a story to the kid in the front row left, then that kid was to whisper the story to the kid in back of him. By the time the story reached the kid front row right, the story had totally changed. Some kids added details, some kids took away details and some did both.

[URLCollection]

EDIT -

[trader]

Originally Posted by DaddyHalbucks

...Who would pay a lump sum of $155 million to acquire an annual traffic stream worth only $3.0 million? That seems pricey....

Sounds like a great deal! I always wonder why so many domainers seem to base name value mostly on ppc income and not on other highly relevant factors often worth much more than ppc?

The domain name value itself, especially if it gets natural type-ins and good keywords can easily be more than a yearly multiple of its ppc income. Plus what about the value of the domain to an end-user who plans to sell high markup products and services resulting from the domains website?

[mole]

Originally Posted by trader

I always wonder why so many domainers seem to base name value mostly on ppc income and not on other highly relevant factors often worth much more than ppc?

Simple, trade. Easy money. Don't sweat, get - the mantra of PPC advocates.

And the spin story:-

1. Type-ins - sit back and relax, just get a generic .COM

2. Pay me big for my .COM, because any other extension thing is worthless. Do not bother to learn about what ICANN and cctlds are doing. It's all hogwash.

3. Don't be fooled by search engines, they only comprise 90& of all web traffic.

[Fearless]

If you are to believe Yun Ye is the wise one, then it's time to cash out. Based on the formula of his sale, my portfolio's value is $24,147,058.82. Make it a nice round $25,000,000.00. Any buyers out there?

[mike031]

gregr.. i see where your coming from but lets look at the facts here.. hehe.. unfortunately there is no formula on appraising a domains value...it would be nice if there was such thing or a standard but its so hard because every domain is so unique and one of a kind... i'm sure both parties negotiated well and are quiet happy with the end result... but form what i'v heard mr. yun ye always gets it his way'

we all know that his portfolio is huge and mostly made up of names generating tons and tons of traffic but we all can agree on one fact which is... lots of his names have been misused and even underutilizied.. i'm sure the new owners have better ways to bring in some profits and rather quickly.. they can double or even triple the existing traffic rapidly.. in many different ways.. people who spend big bucks obviously know what they are doing

[DaddyHalbucks]

mike031 wrote:

we all know that his portfolio is huge and mostly made up of names generating tons and tons of traffic but we all can agree on one fact which is... lots of his names have been misused and even underutilizied.. i'm sure the new owners have better ways to bring in some profits and rather quickly.. they can double or even triple the existing traffic rapidly.. in many different ways.. people who spend big bucks obviously know what they are doing
+++++++++++++++++

It is a given when you own 100,000 domains that some will be overlooked or "underutilized."

For example, I own 13,000 names and I sometimes struggle with the management of my holdings.

Despite the size of his portfolio, his recent $155 million CASH buyout proves that Mr. Yun Ye 'gets it' and that he has managed to see the forest through the trees. He is making His Daddy look bad.

Two thumbs up --way up-- for Yun Ye (let's all hope and pray the check clears on July 1).

[trader]

Originally Posted by DaddyHalbucks

....For example, I own 13,000 names and I sometimes struggle with the management of my holdings....

You must be a genuis Daddy to use the word 'sometimes' in that my portfolio is much smaller than yours but management is rapidly becoming a full time job, leaving me little time for much else lately. How do you manage such a large portfolio, are they all at the same registrar, which makes it a lot easier?

[DaddyHalbucks]

Yes, they are fairly consolidated. It is the only way to fly!