Marchex Model

The Marchex Model came about when the company Marchex Inc, paid $164 million for 100,000 high-quality hand selected domains from Yun Ye. It was reported at the time that the names were generating $19 million in annual revenue. This makes the purchase price approximately 8.6 times the revenue.

The Marchex investment strategy was to:

a) obtain a number of high quality domains in the $1k to $5k range

b) leverage the type it in traffic

While the four figure purchase price eliminates the casual domainer, Marchex face higher risks. However its possible for them to receive significantly higher returns.