7 ms·

I Buy and Sell Domain Names AMA

67 points by ohashi 16y ago

ohashi 16y ago
I answered a bunch of questions on the IRC channel and thought others here might be interested as well.
dotBen 16y ago
Thanks Ohashi for posting this (I can see from the Reddit thread you are the OP/subject of the thread). However on a meta point to everyone: I don't see what value there is in starting another, semantically forked, conversation about a reddit thread over here on HN. Wouldn't it be best to keep the conversation over there for the benefit of everyone, including those Reddit'rs who don't read HN?
- wtracy 16y ago
  Because some of us are lazy and don't want to create Reddit accounts?
- ohashi 16y ago
  Perhaps, but maybe some HN'er doesn't want to make a reddit account, I don't want to exclude anyone, I'd prefer having everything in one place, but I will accommodate :)
- biznickman 16y ago
  I discovered the post via here :) don't hate me but I don't browse reddit, only navigate there from other places (primarily here)
- tlrobinson 16y ago
  1) not everyone on HN reads Reddit 2) the discussion on HN tends to be higher quality than other sites, even Reddit
- SkyMarshal 16y ago
  You also miss the article if you're not subscribed to /r/IAmA, which while interesting, has a pretty high noise:signal ratio. Those used to HN's more focused news feed are least likely to be subscribed to those kinds of subreddits, so it's useful having someone repost the hacker/startup-relevant ones here.
wtracy 16y ago
Say someone has a site (blog or whatever) that has traffic, but few/no ads or other monetization. How do you estimate that site's value for resale purposes?
- ohashi 16y ago
  First I would look at the niche, is it something with a lot of monetization options and/or high paying opportunities? If so, I can look at similar sites, I can look at PPC bids, affiliate programs/conversions. I could see if competitors with ads are selling and see what sort of price/value they are offering (also checkout their media kits if they offer to see what people are paying). It makes a difference if you're selling a website or a domain alone though. Domain only gets complex because the nature of the traffic matters hugely. Changing things dramatically will lose search engine traffic if that's the major source (toys.com is a good example of this).
jonpaul 16y ago
Can you give us a sense on the amount of revenue you make per year?
- ohashi 16y ago
  xx,xxx, it's more than enough to live on as a single person, not enough to support a family probably (in a developed country)
vinhboy 16y ago
First off, I am dismayed at all the people on reddit who are condemning you. Some people talk like they have some sort of God given right to the domain name they want. It also amazes that people believe a successful business starts with a domain name =|, but that's another argument. My question to you is. Why do some squatters stay so anonymous there is NO way to contact them? Also, it doesn't make sense to squat on a domain name that does not get any traffic... If a squatter is sitting on a domain name that does not have any traffic, why won't they sell even to a low offer? Like, a $20 profit is a $20 profit right?
- ohashi 16y ago
  haters gonna hate. i was surprised it took so long (seems to have coincided with US timezones going into evening). I buy and sell em for a living and I don't think domains make or break a business at all. It's just a tool of which there are a nearly infinite number of. As far as anonymity, well, first off if you start with calling them a squatter, I will add a 0 to the price I will sell to you if I respond at all. Second, 20$ is a profit if you don't value time. Some of the big guys have 100k names and get tons of offers every day. Is 20$ worth the time to negotiate, escrow and transfer for someone making 20 mil a year? nope. As far as contacting, most anonymous whois emails end up in a real mailbox I believe. There are other ways to track them down, for example getting a broker. Holding large portfolios, even if they aren't converting on traffic, can convert on a sales model. Average portfolio churn rate is around 2% for the big guys I believe. Parking helps cover costs, but sales generate the $$$.
  - bron 16y ago
    Wow, I am just totally shocked at the response at reddit. How many domains do you hold at a time and what are sales like?
    - ohashi 16y ago
      i have a few hundred now, I sell maybe 10 a year.
- 16y ago
thenbrent 16y ago
My understanding of the domain market is this. Regulators realised the best way to provide domains was to let the market determine their value and allow them to be traded at will (with respect for IP). So they wholesale at dirt cheap prices on a first-come first-served basis and people can then buy and sell them based on market value. Works for real estate so why not domains? The problem derives from the initial price and the expectations that implants. Many expect a domain to cost $10. So when they are offered a price more than that, they are pissed off and blame the person selling it to them. Nobody walks past a vacant block in a prime real estate location and goes "bastards, if they weren't squatting that land, I could snap it up". They know the land costs $x million and don't assume it should cost $10. However, because domains are a new real estate market and not every possible domain is out of wholesale, people base their expectation of price on the wholesale price. Now, let's think of the alternative. Anyone who has tried to buy a top level domain for a country that heavily regulates the names would understand the pain of the alternative. It can cost hundreds or thousands for the wholesale price. You're required to own the trademark already (which adds additional cost for a new project) as well as have a registered company etc. I can think of dozens of my favourite projects/blogs which I'm sure don't have a company or trademark registered under that name. This system would not only be a pain for small business, it would stifle innovation on the web. I'm not a domainer (I do own about a dozen though) and I get just as annoyed as the next guy when I come up with a name for a project and find some punk wants $15k for the domain. But then I think of the alternative.
- KaeseEs 16y ago
  So what are recurring registry fees in your analogy, property taxes?
  - thenbrent 16y ago
    Yes, something like that as I believe a portion of the recurring fee is used to fund regulatory bodies like ICANN. I'm not surprised to see my comment being both up and down voted, but anyone down voting my comment, at least take the time to share your reasons for disagreeing. If there is any place a well considered domain purchasing discussion should be able to occur it's HN.
staunch 16y ago
If domains were $100/yr each would you give up? Do you think it would kill other domainers?
- ohashi 16y ago
  i might be pickier, but I would also charge you 10x more on sales to cover costs.
  - DeusExMachina 16y ago
    Do you think you would still find buyers for a 10x price? Or maybe you would only go out of business because costs would not be covered or revenue would not be enough?
    - ohashi 16y ago
      If everyone charged 10x the price (and they rationally would), then I think most businesses would have to accommodate. Some would go under, sure. You would probably see less liquidity and more sales force focus.
dennisgorelik 16y ago
I think the solution to limit domain squatting is to set domain taxes in the same manner real estate taxes work. Charge 0.1%/year of the domain price. So if somebody wants to buy your domain for $10000 and you don't want to sell it, then the tax would be $10/year. That would make squatting domains without generating any income from them not profitable.
- ohashi 16y ago
  People generally the income generating type of domain names (those investing in a lot of them). If it took a 10k offer to make me pay 10$ more, i'd sell my whole portfolio at 10k each and retire. it would be kind of awesome. :)
  - dennisgorelik 16y ago
    1) It's $10/year vs $10K once. 2) If you prefer to sell your domain for the price buyer is looking for -- that's win-win situation. On the other hand if you want to keep that domain to yourself without using it -- then the tax ($10/year in that case) would help you to reconsider that. 3) If 0.1%/year tax is not enough -- it can be increased a little. E.g.: 0.2%/year.
- goatforce5 16y ago
  Why do you need to generate income with something for it to have value? True story: I have a name I really like which I did use previously, but it currently sits there gathering dust waiting for me to put a new project on it. A VC backed start up offered me $20k for it, but I turned them down. Should I have to pay more for that domain now?
  - dennisgorelik 16y ago
    I think you should either pay "domain tax" or sell. $20/year maintenance fee for the domain name that you really like to use in the future -- is a bargain. Especially if you can sell it for $20K.
evanrmurphy 16y ago
I Buy and Sell Domain Names AMA What does AMA mean?
- johnthedebs 16y ago
  Ask Me Anything
SkyMarshal 16y ago
What are your thoughts on the new .co (Columbia) TLD? Valuable (as an approximation of .com)? Safe (as in not going to cut off companies like Libya did to bit.ly recently)? Anything else?
- user24 16y ago
  unless I missed something, libya didn't cut off bit.ly, they cut off vb.ly and everyone got a bit edgy that they might do it to bit.ly too.
- ohashi 16y ago
  The value is in typo squatting co. No doubt about that. Lookup the .cm story (The Man Who Owns the Internet on Business 2.0 back when it was running - Kevin Ham). He wildcarded the Cameroonian DNS and caught all the typos. Since he didn't register them, he wasn't typo squatting either, everything was wildcarded. Brilliant business move, .co is the same thing in terms of opportunity. As far as riskiness, you never know.
hoggle 16y ago
The problem with domain brokers is trust. I simply don't see myself paying >1000 eur/usd without ever shaking hands in real life first. All the small brokers, no well established "brands" (at least for someone outside that line of business) don't help building the trust needed.
- user24 16y ago
  well, there's sedo.com, buydomains.com, quite a few established middle-men. A lot of small brokers too admittedly.
  - hoggle 16y ago
    True, I once bought from sedo and it was OK at the time (I think it was about 300-400 EUR) but unfortunately not every domain for sale is offered by sedo (at a comparable price).
- DirtyAndy 16y ago
  If your problem is simply about trust in terms of you pay the money and will they give you the domain, there are escrow services that handle this for you, and I sold a domain for $4K once via Paypal. It is not that difficult to safeguard yourself.
- ohashi 16y ago
  Escrow.com - I do basically every transaction through there. Sedo and others offer escrow services as well.
njharman 16y ago
I'm guessing it varies but how much of a domain name's value is in it's name vs it's history (how much traffic it's getting)? What advice do you have for someone who is not a domain seller but has collected a couple domains that they no longer want but would like to sell them rather than just release them for someone else to profit from? What is the most expensive domain name you sold? Back in the original .com bubble someone offered me (and I accepted) $10k for nonames.com. Would that domain go for that today?
- ohashi 16y ago
  the history part is interesting, that can be one component of value. It's more SEO guys that look at that stuff - domain age, links, etc. Valuable names will get type in traffic (if we define value as type in traffic - and many people doing this do exactly that). That type in traffic is there because the name is good and doesn't disappear/change because of history. It can only be increased from that level because of history. In terms of valuation though, we all have our ways of thinking about it. There is a simple traffic value estimation, SEOs value certain factors, and many more ways to valuate domains. as for selling, if you just want to dump there are 2 markets. reseller and end user. Resellers are domain investors, webmasters, people here at HN probably fit. People involved with web who will pay a small price. End users, pay a lot more and are generally companies. You can contact them offering it for sale, otherwise you just wait until they come to (this is what I do). A lot of the deals I do are private, so I won't reveal the most expensive one. NoNames.com... beats me. No Name is a big brand though now right? Not sure if the domain predates the brand, but I would think they might be interested among other potential buyers. You would be in the clear had you registered it prior to their company.

67 points by ohashi 16y ago

I answered a bunch of questions on the IRC channel and thought others here might be interested as well.

Thanks Ohashi for posting this (I can see from the Reddit thread you are the OP/subject of the thread). However on a meta point to everyone: I don't see what value there is in starting another, semantically forked, conversation about a reddit thread over here on HN. Wouldn't it be best to keep the conversation over there for the benefit of everyone, including those Reddit'rs who don't read HN?

wtracy 16y ago
Because some of us are lazy and don't want to create Reddit accounts?
ohashi 16y ago
Perhaps, but maybe some HN'er doesn't want to make a reddit account, I don't want to exclude anyone, I'd prefer having everything in one place, but I will accommodate :)
biznickman 16y ago
I discovered the post via here :) don't hate me but I don't browse reddit, only navigate there from other places (primarily here)
tlrobinson 16y ago
1) not everyone on HN reads Reddit 2) the discussion on HN tends to be higher quality than other sites, even Reddit
SkyMarshal 16y ago
You also miss the article if you're not subscribed to /r/IAmA, which while interesting, has a pretty high noise:signal ratio. Those used to HN's more focused news feed are least likely to be subscribed to those kinds of subreddits, so it's useful having someone repost the hacker/startup-relevant ones here.

wtracy 16y ago

Say someone has a site (blog or whatever) that has traffic, but few/no ads or other monetization. How do you estimate that site's value for resale purposes?

ohashi 16y ago
First I would look at the niche, is it something with a lot of monetization options and/or high paying opportunities? If so, I can look at similar sites, I can look at PPC bids, affiliate programs/conversions. I could see if competitors with ads are selling and see what sort of price/value they are offering (also checkout their media kits if they offer to see what people are paying). It makes a difference if you're selling a website or a domain alone though. Domain only gets complex because the nature of the traffic matters hugely. Changing things dramatically will lose search engine traffic if that's the major source (toys.com is a good example of this).

jonpaul 16y ago

Can you give us a sense on the amount of revenue you make per year?

ohashi 16y ago
xx,xxx, it's more than enough to live on as a single person, not enough to support a family probably (in a developed country)

vinhboy 16y ago

First off, I am dismayed at all the people on reddit who are condemning you. Some people talk like they have some sort of God given right to the domain name they want. It also amazes that people believe a successful business starts with a domain name =|, but that's another argument. My question to you is. Why do some squatters stay so anonymous there is NO way to contact them? Also, it doesn't make sense to squat on a domain name that does not get any traffic... If a squatter is sitting on a domain name that does not have any traffic, why won't they sell even to a low offer? Like, a $20 profit is a $20 profit right?

ohashi 16y ago
haters gonna hate. i was surprised it took so long (seems to have coincided with US timezones going into evening). I buy and sell em for a living and I don't think domains make or break a business at all. It's just a tool of which there are a nearly infinite number of. As far as anonymity, well, first off if you start with calling them a squatter, I will add a 0 to the price I will sell to you if I respond at all. Second, 20$ is a profit if you don't value time. Some of the big guys have 100k names and get tons of offers every day. Is 20$ worth the time to negotiate, escrow and transfer for someone making 20 mil a year? nope. As far as contacting, most anonymous whois emails end up in a real mailbox I believe. There are other ways to track them down, for example getting a broker. Holding large portfolios, even if they aren't converting on traffic, can convert on a sales model. Average portfolio churn rate is around 2% for the big guys I believe. Parking helps cover costs, but sales generate the $$$.
- bron 16y ago
  Wow, I am just totally shocked at the response at reddit. How many domains do you hold at a time and what are sales like?
  - ohashi 16y ago
    i have a few hundred now, I sell maybe 10 a year.
16y ago

thenbrent 16y ago

My understanding of the domain market is this. Regulators realised the best way to provide domains was to let the market determine their value and allow them to be traded at will (with respect for IP). So they wholesale at dirt cheap prices on a first-come first-served basis and people can then buy and sell them based on market value. Works for real estate so why not domains? The problem derives from the initial price and the expectations that implants. Many expect a domain to cost $10. So when they are offered a price more than that, they are pissed off and blame the person selling it to them. Nobody walks past a vacant block in a prime real estate location and goes "bastards, if they weren't squatting that land, I could snap it up". They know the land costs $x million and don't assume it should cost $10. However, because domains are a new real estate market and not every possible domain is out of wholesale, people base their expectation of price on the wholesale price. Now, let's think of the alternative. Anyone who has tried to buy a top level domain for a country that heavily regulates the names would understand the pain of the alternative. It can cost hundreds or thousands for the wholesale price. You're required to own the trademark already (which adds additional cost for a new project) as well as have a registered company etc. I can think of dozens of my favourite projects/blogs which I'm sure don't have a company or trademark registered under that name. This system would not only be a pain for small business, it would stifle innovation on the web. I'm not a domainer (I do own about a dozen though) and I get just as annoyed as the next guy when I come up with a name for a project and find some punk wants $15k for the domain. But then I think of the alternative.

KaeseEs 16y ago
So what are recurring registry fees in your analogy, property taxes?
- thenbrent 16y ago
  Yes, something like that as I believe a portion of the recurring fee is used to fund regulatory bodies like ICANN. I'm not surprised to see my comment being both up and down voted, but anyone down voting my comment, at least take the time to share your reasons for disagreeing. If there is any place a well considered domain purchasing discussion should be able to occur it's HN.

staunch 16y ago

If domains were $100/yr each would you give up? Do you think it would kill other domainers?

ohashi 16y ago
i might be pickier, but I would also charge you 10x more on sales to cover costs.
- DeusExMachina 16y ago
  Do you think you would still find buyers for a 10x price? Or maybe you would only go out of business because costs would not be covered or revenue would not be enough?
  - ohashi 16y ago
    If everyone charged 10x the price (and they rationally would), then I think most businesses would have to accommodate. Some would go under, sure. You would probably see less liquidity and more sales force focus.

dennisgorelik 16y ago

I think the solution to limit domain squatting is to set domain taxes in the same manner real estate taxes work. Charge 0.1%/year of the domain price. So if somebody wants to buy your domain for $10000 and you don't want to sell it, then the tax would be $10/year. That would make squatting domains without generating any income from them not profitable.

ohashi 16y ago
People generally the income generating type of domain names (those investing in a lot of them). If it took a 10k offer to make me pay 10$ more, i'd sell my whole portfolio at 10k each and retire. it would be kind of awesome. :)
- dennisgorelik 16y ago
  1) It's $10/year vs $10K once. 2) If you prefer to sell your domain for the price buyer is looking for -- that's win-win situation. On the other hand if you want to keep that domain to yourself without using it -- then the tax ($10/year in that case) would help you to reconsider that. 3) If 0.1%/year tax is not enough -- it can be increased a little. E.g.: 0.2%/year.
goatforce5 16y ago
Why do you need to generate income with something for it to have value? True story: I have a name I really like which I did use previously, but it currently sits there gathering dust waiting for me to put a new project on it. A VC backed start up offered me $20k for it, but I turned them down. Should I have to pay more for that domain now?
- dennisgorelik 16y ago
  I think you should either pay "domain tax" or sell. $20/year maintenance fee for the domain name that you really like to use in the future -- is a bargain. Especially if you can sell it for $20K.

evanrmurphy 16y ago

I Buy and Sell Domain Names AMA What does AMA mean?

johnthedebs 16y ago
Ask Me Anything

SkyMarshal 16y ago

What are your thoughts on the new .co (Columbia) TLD? Valuable (as an approximation of .com)? Safe (as in not going to cut off companies like Libya did to bit.ly recently)? Anything else?

user24 16y ago
unless I missed something, libya didn't cut off bit.ly, they cut off vb.ly and everyone got a bit edgy that they might do it to bit.ly too.
ohashi 16y ago
The value is in typo squatting co. No doubt about that. Lookup the .cm story (The Man Who Owns the Internet on Business 2.0 back when it was running - Kevin Ham). He wildcarded the Cameroonian DNS and caught all the typos. Since he didn't register them, he wasn't typo squatting either, everything was wildcarded. Brilliant business move, .co is the same thing in terms of opportunity. As far as riskiness, you never know.

hoggle 16y ago

The problem with domain brokers is trust. I simply don't see myself paying >1000 eur/usd without ever shaking hands in real life first. All the small brokers, no well established "brands" (at least for someone outside that line of business) don't help building the trust needed.

user24 16y ago
well, there's sedo.com, buydomains.com, quite a few established middle-men. A lot of small brokers too admittedly.
- hoggle 16y ago
  True, I once bought from sedo and it was OK at the time (I think it was about 300-400 EUR) but unfortunately not every domain for sale is offered by sedo (at a comparable price).
DirtyAndy 16y ago
If your problem is simply about trust in terms of you pay the money and will they give you the domain, there are escrow services that handle this for you, and I sold a domain for $4K once via Paypal. It is not that difficult to safeguard yourself.
ohashi 16y ago
Escrow.com - I do basically every transaction through there. Sedo and others offer escrow services as well.

njharman 16y ago

I'm guessing it varies but how much of a domain name's value is in it's name vs it's history (how much traffic it's getting)? What advice do you have for someone who is not a domain seller but has collected a couple domains that they no longer want but would like to sell them rather than just release them for someone else to profit from? What is the most expensive domain name you sold? Back in the original .com bubble someone offered me (and I accepted) $10k for nonames.com. Would that domain go for that today?

ohashi 16y ago
the history part is interesting, that can be one component of value. It's more SEO guys that look at that stuff - domain age, links, etc. Valuable names will get type in traffic (if we define value as type in traffic - and many people doing this do exactly that). That type in traffic is there because the name is good and doesn't disappear/change because of history. It can only be increased from that level because of history. In terms of valuation though, we all have our ways of thinking about it. There is a simple traffic value estimation, SEOs value certain factors, and many more ways to valuate domains. as for selling, if you just want to dump there are 2 markets. reseller and end user. Resellers are domain investors, webmasters, people here at HN probably fit. People involved with web who will pay a small price. End users, pay a lot more and are generally companies. You can contact them offering it for sale, otherwise you just wait until they come to (this is what I do). A lot of the deals I do are private, so I won't reveal the most expensive one. NoNames.com... beats me. No Name is a big brand though now right? Not sure if the domain predates the brand, but I would think they might be interested among other potential buyers. You would be in the clear had you registered it prior to their company.