sex.com - your final exam in valuation.

[DomainAppraiser]

A.

Great job.

How could you possibly think this is only a $1 billion dollar segment?

HA.

Originally posted by GeorgeK
An old article, with some stats:

http://www.nytimes.com/2001/05/20/magazine/20PORN.html

$10 to $14 billion per YEAR, in the US alone, and those stats are from 1998.

Extrapolating worldwide, that's at least $50 to $60 billion per year, if not more.

 

[GeorgeK]

A billion here....a billion there.....pretty soon you're talking REAL money.

 

[bidawinner]

Originally posted by DomainAppraiser
A.

Great job.

How could you possibly think this is only a $1 billion dollar segment?

HA.

You are reading a report that NEVER WAS..

here are the REAL estimates..

http://www.forbes.com/2001/05/25/0524porn.html

Geez..what I do to educate..
1 billion.. total internet ..sure it's growing as the internet grows but the idea that SEX.COM is even worth 10% of that TOTAL ..is nonsense

 

[GeorgeK]

I think the 2nd article is bogus. Playboy alone has $250 million per year in annual revenues. They definitely don't have a huge share of the porn industry, not 10%, far less.

In any event, these are *annual* figures. When you determine the value in total, you must discount all future cashflows too, and look worldwide. Porn is big in Japan, for instance.

 

[bidawinner]

Originally posted by GeorgeK
I think the 2nd article is bogus. Playboy alone has $250 million per year in annual revenues. They definitely don't have a huge share of the porn industry, not 10%, far less.

In any event, these are *annual* figures. When you determine the value in total, you must discount all future cashflows too, and look worldwide. Porn is big in Japan, for instance.

George..PLyboy.com does NOT bring in 25o million in revs..Playboy ENTERPRSE does ..

There internet part maybe 5 million a year....

 

[bidawinner]

Originally posted by GeorgeK
I think the 2nd article is bogus. Playboy alone has $250 million per year in annual revenues. They definitely don't have a huge share of the porn industry, not 10%, far less.

In any event, these are *annual* figures. When you determine the value in total, you must discount all future cashflows too, and look worldwide. Porn is big in Japan, for instance.

Actually looks like Internet brought in 1.5 million last quarter..

http://biz.yahoo.com/e/021108/pla10-q.html

 

[bidawinner]

Originally posted by GeorgeK
I think the 2nd article is bogus. Playboy alone has $250 million per year in annual revenues. They definitely don't have a huge share of the porn industry, not 10%, far less.

In any event, these are *annual* figures. When you determine the value in total, you must discount all future cashflows too, and look worldwide. Porn is big in Japan, for instance.

AND it lost 2.1 million for the Q

Playboy Online (2.1) (5.1) (8.6) (16.6)

So PLayboy online is actually a big money loser

 

[GeorgeK]

It looks like we're arguing apples vs. oranges. I was talking about the entire porn industry (as was the original poster), and you were talking about only the online portion.

 

[bidawinner]

PLAYBOY ONLINE GROUP


Playboy Online Group revenues increased $0.5 million, or 7%, for the quarter and $1.5 million, or 8%, for the nine-month period. Subscription revenues increased approximately 60% for both periods due to growth in Playboy Cyber Club and Spice Club members and the successful launch of the PlayboyTV Club. Both periods also reflected higher international revenues. In addition to web site deals in Germany and Korea, we have announced new deals to launch web sites in the Netherlands and Taiwan. E-commerce revenues were down year over year for both periods mostly due to the continuation of the strategy to manage direct-commerce circulation more profitably. Also, the timing of Playboy and Spice mailings combined with the sale of our Collectors' Choice Music business in November 2001 resulted in an unfavorable nine-month revenue comparison. The group's segment loss decreased $3.0 million and $8.0 million for the quarter and nine-month period, respectively, due to the higher revenues and cost-saving initiatives implemented in the prior year. The group paid trademark fees to the parent company of $1.7 million and $5.0 million for the current year quarter and nine-month period, respectively, compared to $1.2 million and $3.5 million for the same periods last year.

 

[bidawinner]

Originally posted by GeorgeK
It looks like we're arguing apples vs. oranges. I was talking about the entire porn industry (as was the original poster), and you were talking about only the online portion.

Sorry George..but no he wasnt ..this is what he wanted ...

"What valuation would you place on the name and how do you come to that valuation?"

 

[bidawinner]

And as you can see Playboys entire Revenues for all divisions is just a bit over 100 million..
No way Sex.com is anywheres near that.. Playboy has actual hard assets..sex.com owns JUST sex.com ..as tee commented earlier in 3 years the technology may change..we may not even use domains..you going to pay 1 Billion for that kind of high risk !!!!
Not any sane business venture...

 

[bidawinner]

The ONLY thing SEX.com has is TYPE-IN traffic..thats it..that is IT's VALUE.. no amount of hype can change that...

 

[Tee]

I'd agree with you bid. I'd also add that there is some vanity value or whatever you want to call it in addition to seo'ing it right value..

How many typeins ya think it gets? 212k in overture means what?

If you knew how many tpeins it got then you could get a value going. The name could be much better seo'ed, especially with that money.

Oddly Music.com gets 83k direct searches while " music "

blows away sex searches by double!

overture #'s are weird and not the end all but this suggests sex.com is getting typeins in more than your avergae .com - all things being equal -

 

[bidawinner]

One last read to bring people back to reality..

http://www.websense.com/company/news/features/02/101002.cfm

 

[Shiftlock]

Originally posted by GeorgeK
Extrapolating worldwide, that's at least $50 to $60 billion per year, if not more.

So, when you value sex.com at $1 billion, you're saying that it is worth 2% of the value of the ENTIRE annual worldwide porn industry? Does the make sense? I'm sorry, to say that sex.com is worth anywhere near $1 billion is absurd. Are you sure you mean billion with a 'B'?!

 

[GeorgeK]

No, I'm saying if sex.com can earn $20 million per year in profits, that's less than 0.1% of the total worldwide market for porn (offline and online, to be accurate). $20 million per year would give it a market cap of $500 million plus, if one made reasonable assumptions for growth and applicable interest rates (risk-adjusted).

However, another poster suggested that their actual earnings are closer to $5 million per year. If they can't grow those, then the valuation would be proportionately lower, then.

 

[Tee]

The lowest amount I've seen quoted in a number of articles for sex.com is "several million a month" which is appx 36 million a year- generated..

 

[Shiftlock]

Originally posted by DomainAppraiser
Are you kidding? Do you really believe that CONTENT IS KING? Very 1999.

No, perverts are just going to throw money at your feet because you're the sex.com domain god. Hey, if you can get every single man, woman and child in the U.S. to give you only $4 each, you can make $1 billion.

$100 million is way over the top. I still think that if you spent $100k on a decent name and used the other $99.9 million on marketing, you could create a site that gets more sustained traffic than sex.com.

 

[bidawinner]

20 million in PROFITS !!!!!!!! You mean revenues right?

At a HEALTHY margin of 10% means you'd have to do 200 Million a year in revs... almost a quarter of a billion dollars.. nah..

 

[Tee]

Here is an article, sorry if it was posted already:

http://www.wired.com/wired/archive/10.02/sex_pr.html