Conversations from NamesCon Part II – Paul Nicks, GoDaddy

GoDaddy Inc. founded in 1997 by Baltimore, Maryland by entrepreneur Bob Parsons is an American publicly traded Internet domain registrar and web hosting company. As of May 2017, GoDaddy has approximately 17 million customers and over 6,000 employees worldwide. The company is well known for its advertising on TV and in the newspapers. Their most famous is the 2013 Super Bowl Ad. But GoDaddy has also been involved in several controversies related to censorship. At NamesCon 2018 in Las Vegas we got a chance to talk to them about domains. Conversation below!

NameCon – Las Vegas – January 31, 2018

Conversation with Paul Nicks (PN), GoDaddy
and, Marcus Glaad (MG), Dotkeeper.

MG – Paul, thank you for the session earlier today about learnings from handling and operating valuable domain portfolios. GoDaddy are one of the largest registrars in the world, and since the last couple of years you also manage some of the most valuable domain portfolios there are. Can you tell us about what have happened the last couple of years with GoDaddy?

PN – The basic is that, a couple of years ago, we decided that it would be good for us to test our own tools out to understand really what the domainers are looking at. We thought that, if you could take a domain from a someone that is not really selling that quickly, some portfolios are really looked away. This led to that our buyers were not getting access to those good domains because the domainers were charging to high price. We thought we could run it better by putting buy-now-prices on and selling them through our network. So a couple of years ago be bought one portfolio that came up as an opportunity, and we did very well. I think that the thesis that but buy-now-prices on really did well. We were proven correct. We have since then been continuing for more to buy – today we’ve bought nine portfolios – in total its 750 000 domains.

MG – So you have bought approx 750 000 domains and are now reselling with buy-now-prices? What is your biggest learning and take away from this experience?

PN – The biggest thing is to be reasonable with the pricing. A lot of people do not want to be the person to give a number first, because that could put you in a weaker position in the negotiation, but the reality is if you are reasonable with your pricing you can back up your pricing with confrontable sales data or statics on why one name is better than other. Just put the price out there and be confident about the price that you have and then let the buyer come to you with full knowledge of that this is the expectations about the price and then let them decide if they are willing to pay for that or not.

MG – How does the process look like when you evaluate domain names in portfolios?

PN – When we get a new portfolio we run it through several layers of machine-learned algorithms. We do not necessarily set a price of those, but we use it as a baseline. Then human analysts look at the domain name with average of what the machine learned, and they can adjust up or down. After the analyst go through we have another approval-step – which Im one of the approvers – which is the final step. It helps if you have 100 000 names, instead of going through each one, we let a machine algorithm sort out first, and then a few different sets of eyeballs look at the list of names to make sure you don’t have any outliers.

MG – Can I use GoDaddys prices as an indicator for other domain names?

PN – We are trying to get to a point where there is an consensus on standard pricing. I would like nothing more than having a blue book on domains, but we’ll never going to get there because every name is unique. But I think we back up our pricing with enough data so that we are comfortable standing by. There is a reason why we came to a 2000 dollar domain – we did it because we have more sales history than any other company in the world in this field. We are available to use that data to really associate what our prices whould be.

MG – What trends do you see in the domain aftermarket in 2018?

-It´s pretty easy: The stuff that makes sense, that’s what sells! Over half of all of our sales are inbetween 1000 and 5000 dollars. That’s our sweet spot. In that range you’ll find two to three word domains that makes sense together. They also have something that is easy to understand, easy to spell. These domains sell very quickly on the aftermarket.

MG – Finally, what can you say from GoDaddys perspective regarding the new gTLDs and the aftermarket?

PN – As a registrar we like the sell of these. There haven’t been a lot of new gTLDs on the secondary market because the operators is taking the better names and putting a higher price on them (as premium names). They are operating as their own broker. So you don’t get a investor buying the name and then resell it. Home.loans is an exception, but that’s because it´s an exceptionally good name. It´s still very early.

MG – Thank you so much for you time.

If you are intresseted in GoDaddys aftermarket domains go to www.afternic.com or namefind.com