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Richard Moore: CEO, Dark Blue Sea – Financial Modeling

November 19, 2 Comments

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.

richard moore

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?

Related Posts:

  1. Kellie Peterson – Domain Metrics – D2S1 – Live from Traffic DownUnder 2008
  2. Michael Gilmour Talks Risk – Traffic DownUnder 2008
  3. Divyank Turkhia – Owning Your Own Registrar – D2S1 – Live from Traffic DownUnder 2008
  4. Jackson Hopkins From DDN Talks Sales & Aftermarket
  5. Domain Economics With Dan Warner – Live From Traffic DownUnder 2008

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Comments

Comment by namer.ca - November 19, 2008 @ 02:22 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

Comment by Jamie Parks - November 19, 2008 @ 03:31 AM

Interesting breakdowns. Thanks for compiling and sharing. Enjoying the updates =)

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