Posted this a day or so ago in the wrong thread...moving it over here.
Hi,
A little follow up article:
Buying the Dotcoms
Domain industry leader snaps up large online auctioneer.
June 1, 2007
By Leah Messinger
Oversee.net, one of the top Internet domain name brokers, said Friday it had agreed to acquire SnapNames, one of the largest auction houses for expired and deleted domain names.
The acquisition comes at a time when industry leaders and venture capitalists are turning their attention to the profit potential of domain names and advertising on so-called parked web pages. Domain monetizers use ads from Google and Yahoo, for example, on theses otherwise blank web pages to earn revenue from click-through web navigation. Some industry experts describe the buying, selling, and monetization of domain names as a $4 to $5 billion industry.
Though Los Angeles, California-based Oversee.net did not disclose terms of the deal, it said it took out a $60 million credit line late last year. Jay Westerdal, who writes the DomainTools blog estimated that the deal cost Oversee.net approximately $50 million, while domain blogger Frank Schilling put the deal at $25 million.
Oversee.net founder and CEO Lawrence Ng said the SnapNames acquisition is the first of many to come over the next year. âWe intend to acquire significantly more than $60 million over the next 12 months,â he said.
Portland, Oregon-based SnapNames is one of the biggest players in the domain industry. Domainers commonly refer to the purchase of a domain name as a âsnap,â an expression that is equivalent to making a Xerox or using a Kleenex, said Internet consultant Joshua Bourne.
Oversee.net will take advantage of SnapNamesâ industry recognition to offer new auction capabilities as a package with its preexisting domain monetization services.
Domain monetizers make most of their money when Internet surfers type web addresses directly into their browsers, instead of using a search engine. When people type in either generic domain names, such as business.com, or misspell trademarked names, such as motarola.net, they land on parked pages.
The owners of those pages bet their businesses on the fact that users will click on advertising links en route to their intended destinations, which could bring substantial ad revenues in the process. A 2006 Forrester study estimated that consumers type web addresses incorrectly in to their browsers 38 percent of the time.
One industry expert said an added bonus of the purchase of a domain name auction house would be the insight Oversee.net might gain about domain name purchasing trends. The company could then try to purchase popular domain names to monetize itself instead of putting them up for auction.
Mr. Ng said he expects the deal to close by mid-June.
Source
,
Dan
