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Andreas Karlsson — 06/02/19

Dotkeeper meets – Paul Nicks from GoDaddy

NamesCon offered many interesting lecturers. One of the speakers was Paul Nicks from the registrar GoDaddy, that our posted Marcus Glaad got a chat with.
GoDaddy is one of the world's top domain name wholesalers. They invest in domain name portfolios and resell domain names.

What has happened in the past year?

We have reflected on whether the portfolios we buy are good deals or not. This year we start to look at what drops and filling the shed criteria. We want to continue as a well running business, so we need to make sure that we are not paying in perpetuity – buying domains that might never sell and so on.

When we buy large portfolios, a lot of the domain names that comes with are not very good. Our job is to identify and analyze what we have and see which domain names that aren’t of interest and make sure to get rid of them. We want to buy more that are of better quality.

What is the typical portfolio that you acquire and bring in?

We look at very large portfolios, the ones that have around 50 000 names. We have 750 000 names in our portfolio now. The price per domain will drop the more names there are in the portfolio. It means that we must be more cost-effective. When you get smaller portfolios like one or two domain names at the time it’s harder to get a return on that investment.

If you buy a portfolio with 10 000 domain names, how many out of these would you say that are of interest?

From our portfolios we are seeing 2-3 percent sale every year. So, if we buy a portfolio with 10 000 names, we expect to sell 300 of those. Let say that we sell 300 domain names á 5000 USD each, we get 1.5 million USD. If you don’t get your money back in a couple of years, it´s not a good portfolio.

We price the names before we buy them, we know the approximate through rate, we break it down and see how much we can make on that certain portfolio. Is it worth it?

Last year you were talking about “domains that make sense” and mentioned that the sweet spot was 1500-5000 USD. Is it the same now?

Yes. A little bit narrower would be 2500 USD, a nice even number as an average selling price.

What are the typical domain names that are being bought in that certain sweet spot?

In our network it’s 5-14 characters that makes up 80 percent of all of our sales. The length is important. 72 percent of our sales contains domain names consisting of two words. .com itself make up 92 percent of our sales.

The length, the number of words and the extension are important. Of course, the words have to make sense. Two words in the English language is very descriptive. Some of our top selling keywords are home, online, go, coin, the, of, my and mine. For example, domain names like “the… .com” always sell high.

I hope that companies looking for that kind of name are willing to see that it’s worth that kind of money. Even if they don’t expect it, they learn pretty quickly that that’s the right price.

Any predictions for 2019?

We are going to China. We have dedicated a sales office there. What we know in China right now, is that a couple of years ago we had Chinese premium names, a lot of characters strong together. They didn’t have any intrinsic value, but they were short. That has died out now. We actually see a real growth in English word domains being sold in China. The same combination of two words that we talked about earlier getting popular. The Chinese market becoming more like traditional investment market.

Any tips for corporations picking up domain names on the aftermarket?

For marketing purposes, the important thing to look at is to have a SEM campaign. If you own the right key words, you will get organic traffic that you don’t have to pay for.