Richard Moore is the CEO of Dark Blue Sea. Given the fact DBS own Fabulous, it was a very interesting insight into how they apply financial modeling.
Domain name portfolios have:
- Two revenue streams. 1.Advertising – monetizing the direct navigation traffic. 2. Domain sales
- One expense – Registration cost
Modeling Advertising Revenue
- Advertising revenue = volume * price
- Volume is the number of unique visitors. Search volume data (google, wordtracker)
- “Heartbeats” (Overture with extension)
- Price is the amount received per unique visitor. For example, bid price data and number of advertisers.
Five Different Types Of Prices
- Wholesale price. eg:$100
- Flipper price. eg:$200
- Retail price – one that would list through a sales channel
- High retail price – portfolio owners who say they will sell for $X
- Very high retail price – An astronomic price for a domain name
Modeling Probability of Sale
- Actual number of sales divided by size of portfolio
- Depends on sales strategy (flipper -> 50%, retail 1% to 4%, very high retail 0.01%).
- Optimal strategy is average sales price * probability of sale – restocking cost
Restocking is if you sell a domain, can you go out on the retail market and buy another?
Tags: dark blue sea, fabulous, richard moore
November 19th, 2008 at 2:22 am
very interesting information,
How are you enjoying the conference?
I would be interested in a breakdown of probabilities of sale for each industry/sector.
Oyster
November 19th, 2008 at 3:31 am
Interesting breakdowns. Thanks for compiling and sharing. Enjoying the updates =)