GoDaddy bought Mike Berkens domain portfolio MostWantedDomains.com

[NameClerk]

Godaddy purchases 70,000 domain name portfolio from Mike Berkins (Worldwide Media).

I'd love to know the details of this deal. Mike is known for holding out for top dollar. I'm also curious what Godaddy's plan is for all these domains. They acquired another 200,000 earlier this year from Marchex.

http://www.bizjournals.com/phoenix/...addy-bolsters-domain-name-portfolio-with.html

http://domainnamewire.com/2015/12/0...erkens-worldwide-media-domain-name-portfolio/

 

[bmugford]

why he didn't sell nTLD portfolio? hmm

I assume GoDaddy wanted nothing to do with the new GTLD when it comes to the secondary market.
With lower demand and higher holding costs than .COM I am guessing they viewed new GTLD as a poor investment.

Brad

 

[hugegrowth]

Makes sense for Godaddy, they already distribute domains in all sorts of ways, and have some of the best buying/selling domain stats of anyone. They should know what they're doing.

Makes sense for Berkens, a no-hassle exit strategy at the right time for him.

Would love to know the details of the transaction but we probably never will.

 

[Kate]

Indeed, GD is a Tier 1 domainer...

 

[NameClerk]

I also think since they are a registrar, cost per domain for renewals must be really low too. So even if GD acquired 1 million domains, might be less than a dollar to keep each one per year?

I'm pretty sure the registrar's cost per year on a .com is closer to $8 than $1.

 

[Kate]

Selling one name isn't difficult. But selling a whole portfolio, especially a large one, is a very rare occurrence.
This is the opportunity of a lifetime. Now he can retire and enjoy life (and no longer worry about renewal costs or finding buyers).

 

[hugegrowth]

Since Godaddy is a public company the cost of this purchase could be found out in a quarterly SEC filing or annual report.

 

[NPer]

Would like to see what "Pro" group wants to say about this deal. With so many good oneword.coms 3L 4L 3N 4N 5N in that 70k domain list. Even 30million USD seems less. Why do i feel Godaddy is in Win-Win situation here ?

Comments?
@Eric Lyon, @Shane Bellone, @Joe Styler (on personal front, if possible), @NPer etc

I think the deal is close to- or even going into- the 9 figure range to be quite honest.

I don't think Godaddy paid the entire amount upfront: it could have have been structured that Michael Berkens receives an amount in the 8 figure range upfront, and several payments going forward... that makes a 9 figure deal quite possible, and very realistic based on the quality of his portfolio.

Godaddy bought the Marchex portfolio of 200,000 domains for $28 Million... that portfolio had some nice names, but it had plenty of junk names too. Berkens' portfolio on the other hand has plenty of fantastic domains- unlike other big domainers who tend to have quite a bit not-so fantastic domains as well.

If it sold for high 8 figures- Godaddy definitely got a bargain.
And if it sold for low 9 figures- Godaddy still got a bargain.

Godaddy is positioning themselves nicely in the domain game. They bought Afternic, and now a few domain portfolios...

 

[wwwweb]

@Paul Nicks & @Joe Styler, You guys ever considered something like "GoDaddy Finance" where customers could get credit towards buying your names? Seeing that GD has been building a nice in-house portfolio of expensive names to sell, now you guys need a method for letting some of those who don't have tens of thousands in the bank acquire them. Occasionally you can find other domains who will let you make Escrow payments on LLL.com's and then release the name once paid off. It would be great if there were a reputable company out there you could do it with as well..

DNS/Uniregistry integration in the next month or so is slated to have this, it will be a big feature, most likely the domain will have to be registered at uniregistry for the instant integration.

Godaddy putting it off to the side, will continue to lose key domains from Accounts/TDNAM/Afternic/Premium inventory by not keeping up with rising domain prices, and the fact of the matter is most buyers can't front one time costs up front, they have to be financed in some manner.

This essentially could lead to getting a better price, and closing more sales.

The market moves to quick to simply stay with the norm, let alone get in front of it, and being a public company there is much more demand from investors who want to see strong growth.

 

[wwwweb]

in the past two years buydomains sold, marchex sold, berkens sold, rick schwartz sold porno.com and retired.

it seems that everyone is exiting the game. At the same time the gTLDs have launched and flooded the market. Coincidence?

These guys are reaching the age, where people who have done well take a step back, reflect on things, and do other things. They have nothing left to prove, they made it.

Godaddy has more sales data then you can ever compute in your life, they didn't spend 8 figures in fear of GTLD's. If you ask anyone with a QUALITY .com portfolio, they will say times are good, ask anyone with a high premium renewal GTLD portfolio today, they will shake their head, and shrug their shoulders.

Today .com is still king, I can't predict the future.

 

[NameClerk]

For themselves $8 each?. I find that hard to believe that GoDaddy would charge itself the same price as the customers, but I could be wrong.

VeriSign charges that price to Godaddy for all .com domains. Doesn't matter if GD owns them, or GD's customers own them.

My primary concern is how prominent the promotion of these domains become at GD and Afternic. The rest of us could be looking at diminished visibility on these marketplaces if it becomes more profitable for GD to sell their inventory than take a small percentage for selling ours. Premium listings could be taken out of the search path and replaced with recommendations from GD inventory.... things of that nature. It also brings up possible conflicts with their expiring domain inventory. I'm sure they'll continue to run the highly contested auctions but they might opt to keep large amounts of names for their own inventory instead of letting them go to Closeout status.

It's very interesting but I don't see it as a positive based on where things could go.

 

[Kate]

it seems that everyone is exiting the game. At the same time the gTLDs have launched and flooded the market. Coincidence?

Not everyone, you quoted just a few persons/entities, but there are more.

I also think this a great vote of confidence in .com, coming from the world's largest registrar. While they sell new extensions too, they do not seem to believe that .com is dying and is the past

 

[NameClerk]

I'm happy for Mike on the well-deserved pay day.

I'm still left wondering what the ramifications of Godaddy becoming a major portfolio holder are? They're running two of the larger domain marketplaces in existence and now have over 250,000 of their own names to sell. One would believe they'll slant things in their favor, no?

 

[Joseph Green]

I'm still left wondering what the ramifications of Godaddy becoming a major portfolio holder are? They're running two of the larger domain marketplaces in existence and now have over 250,000 of their own names to sell. One would believe they'll slant things in their favor, no?

On the other hand, if they're buying up portfolios and/or domains, that provides a good opportunity for domainers, and it may even create more liquidity for domains that were once illiquid.

 

[Paul Nicks]

Would like to see what "Pro" group wants to say about this deal. With so many good oneword.coms 3L 4L 3N 4N 5N in that 70k domain list. Even 30million USD seems less. Why do i feel Godaddy is in Win-Win situation here ?

Comments?
@Eric Lyon, @Shane Bellone, @Joe Styler (on personal front, if possible), @NPer etc

There's a reason we liked this portfolio, it is exceptional in both quality and coverage across many different trends/industries. You've got 100+ LLL.coms, a bunch of numerics which we know are hot right now, and then the traditional 1/2/3 keyword generics. Something for everyone I suppose.

 

[Nile Patel]

These guys are reaching the age, where people who have done well take a step back, reflect on things, and do other things. They have nothing left to prove, they made it.

Godaddy has more sales data then you can ever compute in your life, they didn't spend 8 figures in fear of GTLD's. If you ask anyone with a QUALITY .com portfolio, they will say times are good, ask anyone with a high premium renewal GTLD portfolio today, they will shake their head, and shrug their shoulders.

Today .com is still king, I can't predict the future.

Yes he is right most of the big portfolio holder in domain industry are not young and has not that same energy when they was young and buying names by waiting for auction to end 1 or 2 hours in past.
Plus to sale 70k names takes lots of time and you can use today's fund and may be grow it faster investing somewhere rather then wait 5 more year to sale that 70k names and wait for the funds to come in.
For Godaddy it is not only just buying 200k or 70k name and make profit selling that name , guess if they sale 270k name to 200k different business they have 200k new customers whom they can sale hosting , marketing and tons of other services which even easily cover their wholesale price loss and that new customers can stay with godaddy forever compare to domineers moving name from godaddy to other registrar when they get promo codes.
One more point godaddy is no more private company and has team of directors to take final decision compare to past when one guy bob was taking decision based on his knowledge and expertise in this industry, now you have a team of different mind set and very hard to convince them to invest in something new which has not proven record.
I think godaddy's move will be good for all .com holders and all small domineers who was worried about this new gtld expansion, this sales prove new gtld investment from big corporation not going to happen soon.

 

[Jacks86]

I also think since they are a registrar, cost per domain for renewals must be really low too. So even if GD acquired 1 million domains, might be less than a dollar to keep each one per year?

 

[Argentum]

I'm pretty sure the registrar's cost per year on a .com is closer to $8 than $1.

Verisign price for .com is $7.85 + $0.18 ICANN fee.

 

[Keith]

The crazy part about the Berkens sale is that about 69,000 of the domains are lackluster. Check the Whois. They wouldn't fetch $100 here at NP.

That said, I'd run with Godaddy's cash too if it was flashed my way!

Marchex had several uber domains. Hopefully that same quality was represented with this sale.

 

[FPForum]

Great sale for someone who deserves it. From his Twitter, it looked like Michael was a very busy guy pushing sales. Maybe he can step back and take a nice vacation now, while GoDaddy can sit and sell off that portfolio with little work involved aside from countering offers.

 

[Paul Nicks]

I'm happy for Mike on the well-deserved pay day.

I'm still left wondering what the ramifications of Godaddy becoming a major portfolio holder are? They're running two of the larger domain marketplaces in existence and now have over 250,000 of their own names to sell. One would believe they'll slant things in their favor, no?

No.

We do not modify our search algorithms to artificially inflate NameFind inventory.

 

[Paul Nicks]

VeriSign charges that price to Godaddy for all .com domains. Doesn't matter if GD owns them, or GD's customers own them.

My primary concern is how prominent the promotion of these domains become at GD and Afternic. The rest of us could be looking at diminished visibility on these marketplaces if it becomes more profitable for GD to sell their inventory than take a small percentage for selling ours. Premium listings could be taken out of the search path and replaced with recommendations from GD inventory.... things of that nature. It also brings up possible conflicts with their expiring domain inventory. I'm sure they'll continue to run the highly contested auctions but they might opt to keep large amounts of names for their own inventory instead of letting them go to Closeout status.

It's very interesting but I don't see it as a positive based on where things could go.

Hi, I understand the concern about how we'll treat expiry but we made a conscious choice following the Marchex acquisition that we would not skim any names prior to them reaching expiry and we would not be bidding in our expiry auctions because that would pit us against our customers.

If you read the comments from Mike McLaughlin (my boss) and I, we stated several months ago that we would not prioritize our inventory over our customers' and we would not bid against our customers. Even the commission structure for our call center reps have, and will, stay the same on NameFind inventory vs Afternic or GD Premium Listings.

This article from the Marchex portfolio includes some key quotes from Mike on this very topic.
http://domainnamewire.com/2015/04/22/godaddy-acquires-marchexs-domain-name-portfolio-for-28-million/

 

[Paul Nicks]

I belive you are right but still it doesn't make sense because godaddy charge $8.47 on .com renewal for DDC accounts including ICANN fee. Which seems like they only get $0.44 profit on each domain for 1 year.

That's exactly correct. We set DDC pricing to very near cost, we have a commitment to being price competitive for bulk portfolio holders.

 

[Kenny]

Thanks to the GD Staff (@Paul Nicks and @Joe Styler) for weighing in on this.
As you can well imagine, there are some real concerns about (as Kate so aptly put it) GD becoming a tier 1 domainer.
That is a lot of power.

Peace,
Cyberian

 

[FPForum]

@Paul Nicks & @Joe Styler, You guys ever considered something like "GoDaddy Finance" where customers could get credit towards buying your names? Seeing that GD has been building a nice in-house portfolio of expensive names to sell, now you guys need a method for letting some of those who don't have tens of thousands in the bank acquire them. Occasionally you can find other domains who will let you make Escrow payments on LLL.com's and then release the name once paid off. It would be great if there were a reputable company out there you could do it with as well..