Is there a .co.uk "Marchex"?

[Edwin]

Is there any entity out there that could realistically act to soak up large .co.uk portfolios? Not necessarily at the Marchex level (100,000 domains, $155 million) but still at the kind of high level (number of names and price) that would be appealing to some of the major .co.uk players?

 

[Edwin]

It may be a 4.5 year old question, but it's still valid today.

Any thoughts? Has the industry matured that far yet?

 

[retired_member27]

Years ago when I first started, I sold 700+ .co.uk domains (rubbish one word generics) in one go to a US company, I was glad to get rid of them as I didn't fancy paying the renewal fee's.

Sorry that's no help to you Edwin, maybe we should have a thread about the most domains anyone has sold in one go?

 

[stevebrowne]

I'm amazed that some of the big investment companies (pensions etc.) haven't started to do this. They have have budgets of millions upon millions of pounds that they spend on very risky ventures, which would basically allow them to own a large slice of the .co.uk domain space whilst the prices are low.

They can afford to either sit on them for years and sell when approached, or park or develop for ongoing income as well.

 

[domainseller200]

I'm amazed that some of the big investment companies (pensions etc.) haven't started to do this. They have have budgets of millions upon millions of pounds that they spend on very risky ventures, which would basically allow them to own a large slice of the .co.uk domain space whilst the prices are low.

They can afford to either sit on them for years and sell when approached, or park or develop for ongoing income as well.

I am not surprised at all, as they haven't got a clue about domain names or their value, the same as 99.9% of everyone else in the UK.

Long term this is great for domainers. The longer people "don't realise" - the better for all of us, because when the .co.uk goes "boom" those of us with premium names will be glad they didn't realise sooner - if you are in this for the long term of course.

 

[domainseller200]

You're always going to get hype within your own small group but it's my opinion that domain names are a cottage industry.

Im sure there are plenty who will disagree with you there

 

[domainseller200]

Surely you have heard of Rick Schwartz, Frank Schilling and our own James Dale ? - yes I am being sarcastic but surely classing it as a "cottage industry" is a little harsh ?

 

[retired_member12]

...Real investors put their money into real companies, they're always going to invest in lastminute.com rather than buy the domain called travel.com.

Agreed! A domain name is akin to a plot of land which will attract speculators, whereas a developed web site is akin to a property/business which attracts investors. Both the 'domain name' and the 'web site' have their own relative scales of value, but it's realistically the latter which attracts the big money. Plus, a generic is not always a good indication of a sure-fire plot, words such as Google, Twitter, Lastminute, Facebook, etc have no generic value whatsoever, they're 'out of town' developments as far as domain names are concerned!

 

[Edwin]

I think the point (well, one of them) is that in the .com namespace, it's no longer a question of "if" - there are quite a few companies out there busily vacuuming up large .com portfolios. So the general principle (aggregating large domain holdings, presumably profitably) is already proven.

But it's when you head into the .co.uk namespace that things get greyer. Is that simply because the market's a few years behind .com? Or because the value isn't there (hard to believe when you see DNJournal's sales reports each week)? Or something else entirely?

 

[domainseller200]

I think the point (well, one of them) is that in the .com namespace, it's no longer a question of "if" - there are quite a few companies out there busily vacuuming up large .com portfolios. So the general principle (aggregating large domain holdings, presumably profitably) is already proven.

But it's when you head into the .co.uk namespace that things get greyer. Is that simply because the market's a few years behind .com? Or because the value isn't there (hard to believe when you see DNJournal's sales reports each week)? Or something else entirely?

My personal opinion is due to the fact that the .co.uk extension hasn't matured yet like the .com

I think the value is definatly in the domains as we keep seeing the prices increasing and where will they be in 1,2 even 5 years time ?

What is your own gut feeling Edwin ?

 

[stevebrowne]

I must say that if I had won the £90m euro millions, then I would have started hoovering up domains, starting with Edwin

 

[domainseller200]

I must say that if I had won the £90m euro millions, then I would have started hoovering up domains, starting with Edwin

I have to be honest, If I won £90m euro millions, I would give all my domains away to the people on here for free

 

[Edwin]

My personal opinion is due to the fact that the .co.uk extension hasn't matured yet like the .com

I think the value is definatly in the domains as we keep seeing the prices increasing and where will they be in 1,2 even 5 years time ?

What is your own gut feeling Edwin ?

I think it's a lack of courage/foresight. It's hard to see any other reason when you could most likely practically buy the entire .co.uk namespace, lock stock and barrel, for what Yun Ye was paid for his .com portfolio!

Imagine how much "domain firepower" a venture cap fund could accumulate with a warchest of a few tens of millions of pounds.

For example, looking at DomainPrices.co.uk, the following could have been wrapped up for a total expenditure of 954,000 pounds...
Camera.co.uk
Employment.co.uk
Fly.co.uk
FreeStuff.co.uk
HeadHunters.co.uk
History.co.uk
HorseRacing.co.uk
Lyrics.co.uk
Magazine.co.uk
Mobile.co.uk
PDA.co.uk
Philosophy.co.uk
Phones.co.uk
PublicRelations.co.uk
Reviews.co.uk
Servers.co.uk
Ski.co.uk
Snowboard.co.uk
SolarPower.co.uk
Sport.co.uk

Contrast that to how much you'd need to spend to acquire the .com versions!

 

[bb99]

There certainly is value in .uk but the wider environment may be too risky for the sort of investment that Edwin is talking about.

We are currently facing big changes at Nominet post governance review and there's almost definitely going to be some sort of self-regulation coming.

If those changes or that self-regulation isn't good enough for the Government then they will regulate it themselves (and possibly take over).

As it stands, we don't know what the changes are or what form any regulation would take (self or otherwise). But it's probably fair to say that they won't be particularly domainer friendly given what David Hendon has said on record and what was said in the Digital Britain report. Sorry, I mean "portfolio investor friendly"

I'm playing devil's advocate here of course, but it's not unreasonable to think that the next 12 months may bring some unpleasant surprises for .uk portfolio holders. This can only bring uncertainty and thus increase the risk...

 

[bensd]

Is there any entity out there that could realistically act to soak up large .co.uk portfolios? Not necessarily at the Marchex level (100,000 domains, $155 million) but still at the kind of high level (number of names and price) that would be appealing to some of the major .co.uk players?

It may be a 4.5 year old question, but it's still valid today.

Any thoughts? Has the industry matured that far yet?

Are you thinking of selling up then Edwin?

 

[Edwin]

Are you thinking of selling up then Edwin?

Not actively, but the thought had vaguely crossed my mind. I'd hang onto all my geos, map/maps and my active sites, and concentrate on more webby projects (if I was to sell up, that is).

 

[Edwin]

My situation is a bit different as I have huge ambitions/(day)dreams for my geo names in synergy with Britain and Map/Maps. So much so that I could easily see a really serious project sucking in 6-figures in development, data licensing etc. And that's before I get cracking on adding geo names to the network!

I've already seen the development side of things, since my various developed sites combined get over half a million visitors a month. Parking has been a non-starter for me for several years now, it's developed sites and domain sales all the way...

 

[Edwin]

You don't need to answer these questions but in the last twelve months, have you ...

a) Seen an increase or decline in your sales relative to the previous 12 months
b) Seen and increase or decline in value of sales
c) As a percentage, how many of your sales are to genuine end users as opposed to fellow domain or affiliate buyers

a) Sales a bit less, but that's because last year I had a couple of big bulk sales. Strip those out and this year's pace has been higher.
b) See a
c) Probably 1/4 of sales to end-users, but those account for over 50% of value. I only sell to domainers/affiliates when I'm on a bit of a cash trawl, and at that point I'm a sucker for bulk deals.

How about you? Anyone else?

 

[Edwin]

I'm different than you as I only have a very small portfolio but other than to fellow 'domainers' sales are non-existent this year and any interest from end users have gone nowhere.

Ah, I can see how that would colour your feelings a little. Coincidentally, I just sold a domain to an end-user between my last post and this one (first end-user sale in November)

 

[James]

Thought it might be worth addressing the original question.

We (Paul Harwood and myself) once tried to start a UK Marchex, back in the days when we owned Streamic. I had a meeting with three investors with a £5m fund to kick things off. I outlined the opportunity and everyone seemed totally interested. Unfortunately nothing transpired due to some shareholder issues at the company, boring internal goings on. Indigestion.

This was "back in the day" when high traffic, "sensitive" domains generated significant chunks of revenue, which they still do I guess... but the risk of owning such names was relatively less severe. Focusing on the UK market exclusively for this business model would have actually been pointless anyway. There are some good UK domain names like this, but .com usually gets at least 8 times more traffic for the same keywords. This means that Marchex can happily get away with buying GENERIC domains (for multiples based on PPC revenue), but a UK-orientated Marchex really couldn't work on the same basis at all. The latter would absolutely have to rely on typos 100%

So, the business would have actually been a Marchex clone, more or less. It would certainly not have been a UK version of Marchex, as that would have been to pointlessly ignore the true size of the opportunity. Equally pointless to buy up large quantities of amazing one word generics for the typical prices commanded by UK domainers *unless those generics get SIGNIFICANT traffic. It's just way, way too hard to predict things on a development model. I can't see any investors being interested in that really, unless you managed to impress them with flowery language.

I do like a good domain name. They are memorable, they smack of authority and they can open up opportunities in the right hands. There is also no doubt that a generic domain can benefit you in the search engines TODAY (this could so easily change though!)

In general I think many UK domainers would do themselves no harm by stepping things up a gear to develop something worthwhile. Purely focusing on buying and selling names and/or domain parking is not only lazy, but takes a lot of luck, guts and money, and these days probably all three in healthy measure. Example: If you've got the guts and the money to buy mortgage.co.uk for £200k then yes, you might just sell it for £1m in five years' time, if you're lucky. But you can't predict that. It's just as likely in my view that such .co.uk domain names (no matter how fantastic we think they are today) will eventually be perceived as worthless. Totally possible.

If you're convinced that buying and selling domains is a great business model, then by all means, ride that wave while it's there. But at least focus on the absolutely premium, best of the best domains. In the current environment you're never going to get rich dealing in "almost great" domains for moderate sales prices. In my opinion most end users and the business world in general already does "get it" when it comes to generic domains.

I agree with Sean's comments in this thread.