Confidential

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Presented By: WashingtonVC
Adam Goozh, Tom Forman &
Mike Mann
Confidential

DomainMarket.com, with founder and domain industry leader Mike Mann's knowledge and history of success at its core, is uniquely positioned to take advantage of a rapidly changing domain marketplace. With cutbacks in Google’s cost per click (CPC) (PPC?) advertising revenue opportunity and a potential plethora of new Top Level Domains (TLDs) causing confusion (i.e.,
.travel, .tv, .whatever, etc.) entering the industry current players in the domain marketplace are scrambling to reinvent their revenue models. While domain traffic and some lower level domains are becoming less valuable there is a flight to quality with .com extension domains as well as some .orgs and .nets. There is also an ever increasing demand for expertise in developing
“world class” domain-based brands. Both phenomena are Mann's proven specialties. Quite simply, DomainMarket.com will maximize the best identifiable opportunities in this space.
The ability to arbitrage domains to take advantage of Google’s over-inflated CPC values was mostly a passing fad, much like speculation in “non .com” domains. DomainMarket.com is focusing on the proven notion that super premium generic .com brands will continue to increase in value. The company believes that effective segmentation within the domain marketplace will lead to an even more robust premium domain aftermarket, with increasing sales volumes and even higher domain valuations. Mann’s transactional experience with premium, generic domains along with that of other notable domain industry experts is evidence of this trend. Mann has sold more premium domains than any other individual in the world. These activities, other than resulting in a hefty profit margin, have enabled DomainMarket.com to amass a private, super premium domain portfolio over the last year valued at an estimated $50M and growing.
Mann and his team, inclusive of some core development and sales team members from
BuyDomains.com, which Mann sold in 2001 for over $80M, has positioned DomainMarket.com for rapid growth. The company will look to quickly establish its position as the top buyer, seller, and monetization expert in the premium, generic niche of the domain marketplace. Industry knowledge and success coupled with proprietary, one-of-a-kind technologies and domain speculation methodologies will further fuel DomainMarket.com’s success.
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DomainMarket.com is a “next-generation” premium domain name marketplace and monetization platform dedicated solely to the World’s best premium, generic domain properties.
DomainMarket.com has been developed by industry experts as a destination for: (1) domain owners to validate the premium nature of their domain properties, monetize those properties in the most revolutionary and lucrative manner, and sell their domains to qualified buyers looking for qualified premium names; (2) domain buyers, whether businesses or individuals, searching for validated, premium domain properties to enhance the value of their businesses, or to build quality businesses; and, (3) domain speculators in search of qualified premium domain name investment opportunities.
The ultimate goal of DomainMarket.com is to attract premium domain owners, sellers and buyers. Through the successful creation and branding of a solely premium domain marketplace and monetization platform, DomainMarket.com will monopolize the premium domain niche.
This monopolization will enable DomainMarket.com to have first position acquisition access to premium domain inventory. With appropriate cash reserves for domain acquisition,
DomainMarket.com will be in a position to develop undervalued domain properties and sell them at an average return of 3-10X, or maintain those names whose monetization is significant until the right price comes along. Domains will be retained in those situations where the monetization revenue supports the continued maintenance of the domain/site or the estimated future retail sale of the domain justifies.
Today’s domain valuation models are immature and typically based on a multiple of PPC revenue, which means on the buy side there are opportunities to purchase untold numbers of undervalued domains – and on the sell side, there are opportunities to enhance retail valuations through creative, professional domain development and merchandising. DomainMarket.com is perfectly positioned to exploit these opportunities.
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The domain name industry is littered with companies offering virtually the same generic domain acquisition and monetization services. Each of theses companies provides users with the ability to search for available unregistered domain names, make offers to purchase registered domain names from owners willing to sell, and earn revenue on their unused domain properties primarily via PPC advertising supported parking platforms. While there are some slight variations between the current players in the domain sector, the differing “bells and whistles” seem to offer scant value.
Perhaps more important, however, is the fact that the current market does not offer domain name owners and buyers with a valid means of identifying which names are truly premium. As domain names are the real estate of the Internet, this is a significant problem. It is akin to lacking a valid means of differentiating between the market value of real property in Palm
Springs versus a parcel in a environmentally decimated, industrial park in Michigan. Buyers and sellers are left to fend for themselves in a confusing, immature market. They must determine on their own what the market value of a domain property might be and validate that value to a potential buyer. With the absence of a player in the domain space focused solely on the World’s best premium names, it’s truly a crap shoot.
The value chain that currently serves the domain industry suffers from the following vulnerabilities:
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Acquisition.
Finding premium, undervalued and appropriately-valued domains is difficult and more competitive than ever. Only a handful of people in the world know how to do it successfully.
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Parking.
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Content – commercial parking sites typically offer content that consumers don’t really want or benefit from; limiting their long-term revenue potential.
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Brand Names – parking monetization is typically limited to direct navigation domains, often leaving high value, “brandable” names undervalued and mostly unexploited.
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Advertising Options – parking limits advertisers to standardized and overly simplistic advertising options, focused primarily on CPC, CPA and
CPM.
 Monetization – monetization is typically limited to advertising and some affiliate options, leaving premium domain owners with limited opportunities and a dependency on a limited revenue source.

Development . Few domain owners possess the knowledge, skills or resources necessary to exploit best business practices and leading edge technologies to develop their premium domains into full-blown media properties, and businesses. The goal is to go far beyond simple CPC and to leverage avenues like CPA, CPM, banner advertisements, affiliate relationships, software application and feature revenue shares, ecommerce and business planning to enhance domain value.AWK
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Valuation . Domain valuation models are immature and typically based on a multiple of
CPC revenue. What this translates to is on the buy side there are opportunities to purchase untold numbers of undervalued domains and on the sell side there are opportunities to enhance retail valuations through creative, professional domain development.
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Sales . The premium domain market is highly illiquid and thinly traded. There are few viable vehicles for making valuable premium domain assets available to targeted audiences via direct (list) marketing. The sites that do exist have a preponderance of unusable and unsellable domains that will dilute their company’s margins and clog their websites indefinitely.
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Value-Add Services.
Outside of basic domain registration, hosting and transaction services assistance to domain owners in the current marketplace is limited to a few providers. Domain financing, domain leasing, domain asset borrowing, domain transaction escrow and appraisal services, domain matching for businesses, and domain marketing for sale and monetization are services that are offered by just a few providers, marketed in a limited fashion, and are by no means a core business line. A greater assortment of value-added services is needed and represents an opportunity for a best-ofbreed leader to expand and ultimatelyrise to the top, taking market share each step of the way.
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DomainMarket.com utilizes proprietary methodologies to determine the estimated current and future value of domain properties. DomainMarket.com has automated much of the process and developed a suite of administrative tools for a team of sales and acquisition experts to value domains. Once a domain name is processed and an estimated present and future value is determined those that meet or exceed the $10,000 retail value will be extended an invitation to join and be listed with the DomainMarket.com community. Upon acceptance of this invitation, domains will be assigned a Quality Index Score and categorized by topic. As a member, domain owners can take advantage of the monetization, brokering, and value-enhancing development services, including next-generation parking, business planning, ecommerce development, domain appraisals, and marketing services.
DomainMarket.com is solving three major industry problems. First, by including only domains with estimated retail values of $10,000 or more domain property owners have an exclusive location on which they can list and sell their domains without being lost in a database of millions of worthless domains, which is the present reality. Second, the value-enhancing (i.e., next generation parking), management and brokering services provided by DomainMarket.com are focused specifically on truly premium domain properties. Premium domains, according to
Wikipedia, are often short and memorable, may contain words that are regularly searched on search engines, or have keywords that help the name gain a higher ranking on search engines, or contain generic words, so the expression has more than one meaning. Finally, third,
DomainMarket.com maximizes the buyer audience and likelihood of a multiple offer scenario for premium domains.AWK The DomainMarket.com valuation methodology offers domain owners and buyers a proven means of determining a domain’s value; the exclusive nature of the community makes it easier for individual and business buyers to find premium domain properties; and the unique suite of services offered by DomainMarket.com maximizes domain owners’ ability to effectively utilize and maximize the value of their domains.
DomainMarket.com is not an option for every domain or domain owner. DomainMarket.com will exclusively service the approximately 1 million of the world’s best premium domain names and their owners. In this respect, DomainMarket.com will supplement and enhance how premium domain owners presently manage their domain properties.
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Premium Domains Only.
The DomainMarket.com marketplace and owned portfolio will include only the World’s best premium domains. The company policy will be to not own domain names that include registered trademarks, adult names, vulgar or obscene language, or language associated with any illegal enterprise. The DomainMarket.com expertise is the identification and monetization, through sale and development, of undervalued, premium domain properties. The company will not acquire or allow for listing any domain names that do not appear to have an estimated value of $10,000 or greater.
Leading Marketplace and Trading Expertise.
DomainMarket.com estimates that there are approximately 1 million truly premium domain names within the .com, .net, and .org TLDs.
The company will start with a premium domain inventory of more than 5,000 names and estimates that it will have another 15-20,000 third party names listed for sale solely based on the domain industry relationships. We believe that the guaranteed quality and value of the inventory we offer will differentiate DomainMarket.com and make it an instant provider of choice and marketplace for domain owners looking to enhance the value of their premium domain properties, and businesses seeking to acquire validated, premium domain properties.
DomainMarket.com will utilize its proprietary methodology to evaluate, appraise, and assign
Quality Index Scores to third party domains seeking to list or sell on DomainMarket.com as well as when the DomainMarket.com domain acquisition team is reviewing premium domain purchase opportunities outside of the DomainMarket.com marketplace.AWK This process of evaluation will enable the Company to maintain the premium nature of the marketplace and to cost-effectively acquire undervalued, premium domain names that have a high probability of profitable resale.
Next Generation Monetization Platform.
PROPRIETARY INFO PART OF OTHER
COMPANY
DomainMarket.com’s strategy is to quickly implant ourselves as the leading online marketplace for the development, monetization and brokerage of truly premium domain names. To achieve this objective, we intend to:
• Accumulate many of the World’s best premium domain properties onto our marketplace through Mike Mann’s vast domain industry and premium domain owner network;
• Focus on growing the DomainMarket.com proprietary, premium domain portfolio to maximize domain inventory value and profitability;
• Develop a unique suite of monetization applications and services through the aggregation of cutting edge partner products to optimize the value of the DomainMarket.com domain properties and our customer domain properties;
• Offer an assortment of trusted services to best facilitate the sale and purchase of premium domains, leasing of premium domains, and borrowing against premium domain assets; and,
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• Provide premium domain owners with a menu of technical and consulting services focused on developing domain properties into profitable businesses that generate revenue and greatly enhance the market value of the domain name.
DomainMarket.com will execute its strategy and position itself as the marketplace and provider of choice for premium domain owners offering domain liquidity, development and monetization.
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The current domain name sales and monetization marketplace includes a mix of service providers with very little differentiation. While there is segregation with regards to the breadth of domain-related services offered, “unique” is not an appropriate word to use in describing these vendors or their services.
The domain market includes aftermarket domain name resellers, such as Sedo and diverse registrars like GoDaddy and NetworkSolutions, whose businesses provide a marketplace for the resale of domain names. Next, there are registrars, whose primary business is domain name registration and the management of domain names, such as NameMedia, GoDaddy (several different spellings of godaddy, be consistent) and Register.com. Finally, there are domain name auction companies, such as NameJet and SnapNames, which acquire domain names from resellers, registrars and other owners and sell them in an auction process.
The key issue in the current domain sales environment is that all of the vendors mistakenly view domains as commodities with focus on domain listing and sales volume, as opposed to domain quality. The result of this industry attitude is a general consumer view that all of the vendors are relatively the same, and domains are not serious brand assets.
The domain market includes buyers, sellers and speculators. The current market best suites speculators. Presently, only speculators profit from the lack of clarity around domain values and the difficulty buyers face when searching for a domain or attempting to purchase a domain. In addition, unknowledgeable domain owners frequently fail to understand the true value of their domain assets and are therefore sometimes taken advantage of by speculators.
The key method of monetization in the domain industry to date has been parking with cost per click (CPC) advertising revenue. Google AdSense for domains is the parked page advertising service that essentially owns and controls the industry, along with Yahoo Search Marketing
(formerly Overture and Applied Semantics). Google is the fastest growing ad provider on the web. Google traditionally seeks to build strong relationships with domain aggregators who have a proven record of high-quality traffic and who share Google’s vision of only providing highly relevant advertising on parked pages. This attitude, however, has become more refined and stringent recently.
In the past, Google and Yahoo! have enabled owners of parked domains to generate significant income from CPC advertising. However, Google has recently refined its technology and service to provide advertisers with the ability to exclude ads from showing up on domain parking sites.
This will affect parked domains on any of Google’s ad feeds, regardless of whether it is the
“search” or “content” feed. In addition to domain parking pages, advertisers use the “Site and
Category Exclusion” tool in their account to opt out of error pages, forums, social networking sites, image sharing sites, and video sharing sites. Coupled with “click fraud” associated with parked domain pages, it isn’t a surprise most advertisers will often opt-out of domain ads.
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Google has been the driver in the space and Yahoo! recently announced that it will begin using
Google's search and contextual advertising technology through its AdSense for Search and for
Content advertising programs.9use of caps?) AdSense for domains provides domain name registrars and large domain name holders with an opportunity to unlock the value in their parked page inventory. AdSense for domains delivers targeted, conceptually related advertisements to parked domain pages by using Google’s semantic technology to analyze and understand the meaning of the domain names.
Google utilizes an automated targeting solution powered by its AdRank algorithm that intelligently selects the “most relevant” ads and categories for domains. Additionally, Google augments its semantic targeting with manual and automated optimization techniques. In essence,
Google dissects and evaluates domains. It is a virtual “bubbling to the top” effect where only premium domain names with real traffic and value will attract advertisers and the domain owners will still need to do more than just park.
Search engines like Google will only follow, index and highly rank web sites with real, keyword rich content and actual value. Traditional domain parking is strictly a page of ads and will no longer rank on search engines. To be ranked highly and generate real revenue domains will need
“real” web sites, or at least contain real content and have an identifiable purpose.
The lack of evolution and specialization in the domain industry coupled with the near destruction of domain parking as we know it has afforded DomainMarket.com additional opportunity. With
DomainMarket.com, domain buyers have a proven means of finding truly premium domains, determining a domain’s value, and managing the transaction without the involvement of thirdparty brokers and speculators. For sellers, DomainMarket.com establishes the premium nature and value of a domain, offers sales tools and services to create a multiple-offer scenario, and provides the transactional support to complete the sale in a safe, trusted manner.
For owners of premium domains, DomainMarket.com approaches monetization in a unique way.
Advertising, while still an important opportunity for revenue generation, is only one means of monetization. The DomainMarket.com model for monetization is not the “one size fits all” model utilized by the rest of the industry. By focusing solely on the World’s best premium domains, of which the company estimates there are approximately 1 million, the
DomainMarket.com methodology is to truly develop a web presence around the domain property.
By definition, most premium domains have intrinsic business value. DomainMarket.com, using a series of tests, statistical analysis and categorization, maximizes domain value through business creation.awk Such creation could range from categorical web site development inclusive of real content, imagery, to full business plan drafting, implementation and operation. Whether a focused, web-only presence with ecommerce, third-party revenue share, and advertising monetization or a full-blown business plan with on and off-line infrastructure and operations,
DomainMarket.com offers premium domain owners a unique suite of dependable monetization opportunities and real value creation.
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According to a 2007 report by International Data Corporation (IDC) the number of global
Internet users is projected to grow from approximately 950 million in 2005 to over 1.5 billion in
2009. Nearly 70% of the US population currently uses the Internet and that number is projected to grow to 75% by 2010 (Piper Jefferies Internet Report 2007). It is justified to assume that over time, advertising expenditures will follow consumer behavior and businesses will allocate a larger percentage of their marketing budgets to online advertising. While online advertising was just a way for web-only brands to generate eyeballs during the DotCom Bubble, it has matured into a large and rapidly growing medium that allows for targeted marketing with instant marketing campaign feedback and optimization.
According to the recent Deloitte Technology, Media and Telecommunications Report, in 2008 online advertising is expected to generate $41.6 billion in revenue, a 23 percent increase over
2007 ( See Attachment A for greater detail). The rate of growth in online advertising is projected to grow six times faster than traditional media through 2009. Advertisers are seeking to reach specific online audiences, and performance-based online advertising distribution providers, such as Google and Yahoo!, are continually seeking to add more highly-targeted online properties to their networks to satisfy this growing demand for performance-based online advertising.
The Piper Jefferies Internet Report 2007 further supports this trend as 41% of Internet users turn to search engines first when trying to accomplish a task online, while 37% type a web address directly into the browser and 22% utilize bookmarks. By typing a search term directly into the web browser address bar, Internet users indicate an interest in a particular subject, which results in highly-targeted online traffic. The direct result for advertisers is a lower cost of customer acquisition. Due to the cost efficiencies, potency and high ROI of paid search, it is anticipated that online merchandisers and businesses are likely to use it more as a customer acquisition vehicle, to the tune of 20-30% of their marketing budgets (Piper Jefferies Internet Report 2007).
Advertisers are attracted to the performance-based advertising models enabled by the Internet, where they pay for advertising only when a consumer takes a specific action, such as clicking on an advertising link, completing an application form or making an online purchase. The continued growth in performance-based advertising depends on the ability to effectively intersect consumers’ interests with advertising targeted precisely to their expressed needs to produce a desired consumer action. Consequently, advertisers are seeking to reach specific online audiences, and performance-based online advertising distribution providers, such as Google and
Yahoo!, are continually seeking to add more highly-targeted online properties to their networks to satisfy this growing demand for performance-based online advertising.
Cost Per Click (CPC) search advertising is based on the return received for each click by the advertisers. Different search terms carry different bid prices from the advertisers, ranging from
$0.05 to well over $50.00. The average click charge is approximately $0.50. With the ability that search offers to reach highly-targeted audiences and the even more targeted results delivered by “Long Tail” key words it is not surprising this combination receives much attention from advertisers. Long Tail keywords tend to be the most specific and, therefore, most relevant terms
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for a given search, thus showing higher average click-through rates. Additionally, these terms are more likely to lead to a conversion on the advertiser’s site because the more specific the keyword the more likely the lead is qualified.
Domain names are key to doing just about anything on the Internet, from setting up a Web site to sending and receiving email to building an online business and brand. According to the June
2008 Verisign Report, at the end of Q1 2008 there were 162M registered domains (84.4M .com and .net; See Attachment B) and the volume of registered yet undeveloped domains continues to grow year over year. With the base of domain name registration growing 26% year over year and 6% quarter over quarter it as clear that the number of undeveloped domains will grow at a significant volume. Verisign further estimates that 20-25% of all .com and .net registered domain names are single-page websites. Many of these domain properties are owned by domain speculators seeking to generate revenue from their domain name either by selling the domain for a profit or by deriving CPC or CPA advertising revenue from the organic traffic the domain name generates. Verisign estimates that domain names registered at the end of Q1 2008 with the intent of generating online advertising revenue represented between eight and ten percent of the
.com and .net base.
Domain speculators have gobbled-up a healthy share of the premium domain inventory while most small and medium businesses have been slow to grasp the importance of premium domain properties. According to IDC, there were approximately 8.3 million small and medium-sized businesses in the United States in 2007. As these companies look to establish online identities and develop websites, they will need to acquire premium domain names that accurately reflect their businesses.
DomainMarket.com sees this growing number of undeveloped domains, approximately 1 million of which are premium, to be a significant opportunity. The current illiquidity of premium domain properties combined with the declining CPC and CPA revenue model and a large buyer market consisting of small and medium businesses present a market opportunity that is large and growing. As online advertising continues to mature all businesses will reserve more and more of their advertising budgets for online advertising due to the highly-targeted opportunity it presents.
Businesses without quality, premium domains will also look to acquire good domain properties.
ICANN estimates that the new domain name registration market is quickly being overshadowed by the domain aftermarket, which is now believed to be valued between $US 1-2 billion. In the first quarter of 2008, $38,029,543 in domain sales were reported to DN Journal, a 78% increase over the $21,253,105 in domain sales reported for the first quarter of 2007, according to Ron
Jackson, editor and publisher of DN Journal. While non-premium domains account for a portion of these transaction, premium domain sales accounts for a majority of the dollars. As the demand for premium domains grows out of business need and the importance and effectiveness of online advertising we expect the domain aftermarket to follow suit.
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The following secondary domain name market matrix provides a snapshot of the secondary domain name aftermarket service providers and their services. The matrix details the prominent services that major industry participants provide. While there are numerous participants in this industry we have reserved this matrix for the primary players only. These companies maintain most of the market share and are the prominent players in the space from an offering perspective.awk Further, the information provided illustrates a general consolidation across registrars, auction platforms, and expired domain name resellers. Attachment D provides a more detailed overview of the market and the key providers.
Review syntax and caps on table below
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Domain Parking
Purchase Domains
Sell Domains
Domain Escrow
Services
Domain Finance
Domain Transfer
Domain Portfolio
Management
Domain Brokerage
Sell Websites
Advanced Domain
Name Search
Live Domain Auctions
Online Domain
Auctions
Premium Domain Name
Segmentation
Commission Rate
Expired Domain Names
Appraisals
Domain Name
Transfers
Domain Name
Watchlists
Domain Promotion
Register Domain(s)
Web Site Hosting
Client Portfolio
Management Interface
Affiliate Programs
Search Engine
Submission
Search Engine
Optimization
Search Engine
Marketing
Pay Per Click Ad
Management
Email Marketing
Email
Web Site Security
Sedo x x x x x x x x x x x
10% x x x x x x x
Go Daddy x x x x x x x x x x
SSL Certificates
Security and
Performance
Monitoring
Ecommerce
Credit Card Processing
Do it Yourself Websites
Web Site Design x x x x x
Web Site Analytics x
Internationalization
Online Auction
Platform
Parent Company
Expired Domain Name
Source
Expired Domain Name
Reseller
Sedo
German United
AG n/a n/a x
TDNAM
Go Daddy
Group
Go Daddy
Group
TDNAM x x x x x x n/a x x x x x x
TDNAM Buydomains x x x x
Afternic x x x x x x x x x x
5%-7% x x x n/a x x x x x x x x x x x x
20% x x x x
Moniker x x x x
SnapNames
Network
Solutions x x x x x x x x x
15% x x x x x x x x x x
20% x x x x x x x x x x x x x x x
5% x x x x
NameJet x x x n/a x x x
TDNAM
Go Daddy
Group
Go Daddy
Group
TDNAM n/a
Name Media
Afternic
Name Media n/a
Afternic
Tucows
Afternic
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Snapnames
Oversee
SnapNames
Oversee n/a n/a
Register.com
SnapNames n/a
General
Atlantic
Network
Solutions
NameJet
NameJet
Demand Media
Network
Solutions
NameJet

The following provides a brief summary of DomainMarket.com’s supportive technologies for the front and back-end systems.
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Programming Language: Java 5, running in Resin servlet container v. 3.19. Commonly used, stable technologies with broad base of available programmers.
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Database: MySQL. The most commonly used database for web applications able to search tens of millions of records quickly.
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Operating System: Redhat Linux. Open source, based on Unix. The most commonly accepted and widely deployed operating system for web services.
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Hosting: Managed and hosted by Webair. DomainMarket.com has forged a strategic relationship with Webair to provide hosting services. Webair provides the resources and scalability required for the DomainMarket.com hosting environments.
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Security: AES encryption, application services protected via firewall, SSL for ecommerce
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Architecture: MVC Compliant, REST architecture
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Website: PHP, HTML, CSS. For the website the presentation layer is decoupled from backend systems logic to increase application processing cycles and to minimize programming costs.
DomainMarket.com has developed a number of key, proprietary technologies. The following provides an overview of those technologies, while additional detail is provided in Attachment E.
 Domain Valuation Tool:
The DomainMarket.com domain vetting and valuation tool will analyze the company’s proprietary domain name database of records that includes domain purchase, sales and valuation history, traffic data, advertising data, and ecommerce data. The tool will assign a domain name value, Quality Index Score and quality ranking, which will greatly facilitate the screening process managed by our domain name portfolio management team. ( See Attachment E)
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Domain Monetization Platform:
The DomainMarket.com next generation parking and monetization platform “nextgeneration” parking and monetization platform will be an open-access aggregation of best-of-breed widgets, “drag and drop” features, and affiliate links. The platform will utilize analytics and domain categorization to recommend to premium domain owners the most appropriate and lucrative widgets, features, affiliate relationships and categoryspecific advertisements as well as help them buy and sell traffic. In addition, the tool will use domain categorization to place the most appropriate keywords and content feeds for customer sites to best optimize for search results and increase traffic. Robust analytics and reporting will provide domain owners with a real-time, dependable understanding of how their premium domain properties are performing.
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Listing Display Algorithm
DomainMarket.com will rank premium domain inventory via an algorithm which takes into consideration relevance, expected rate of sale and net commission to the lead
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generator, assuming one is involved. The data is then utilized to calculate the optimal set of premium domains to list and the order in which they should be displayed.
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Price Request Interface:
The DomainMarket.com Price Request Interface (PRI) is proprietary and internally developed. The PRI is accessible via a secure, web interface and was developed with scalability and security in mind. There is a direct linkage between the
DomainMarket.com website and the PRI.
When visitor to the DomainMarket.com submit a price request for an available domain, that inquiry is automatically dropped into the PRI for review and processing by the
DomainMarket.com sales team. When a customer purchases a domain, that domain is automatically removed from the “visible” inventory table in the database and is no longer displayed as available on the website. In addition, registrar records are updated and the domain is officially transferred to the purchaser.
The PRI system also manages inbound price requests made via email, phone, and from links on parked domain pages. The Domain Valuation tool then allows the
DomainMarket.com sales team to respond to each inbound inquiry after having examined a set of domain-centric variables that enable the provision of a validated and credible price quote. ( See Attachment E for more detail on the PRI)
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DomainMarket.com will buy, sell, and monetize premium domain names, including more than
5,000 domain names that the company presently owns and thousands more it will acquire. Some of the current names it owns are worth around 1M each like Angola.com, Tasty.com,
Favorites.com, and Obey.com. Many others are valued in the multi-hundred thousand dollar range like Cameroon.com, VaticanCity.com, Lobbyists.com, Nanticoke.com, Coexist.com,
Crime.org, Homeless.com/.org, and many others. The corpus remaining is worth tens of thousands of dollars per domain.
The company will exclusively offer to the niche market of premium domain owners and buyers the most efficient and effective brokerage, monetization, and development services as well as the most liquid marketplace. DomainMarket.com will generate revenue from four primarily sources:
(1) the monetization of its domain inventory; (2) the sales of its domain inventory; (3) the monetization of customer owned domain properties; and, (4) the provision of services to domain owners.
 Domain Acquisitions and Sales Revenue Model:
DomainMarket.com’s principle revenue channel will be the acquisition of undervalued revenue-generating domains and domain name portfolios and their corresponding websites. Utilizing Mike Mann’s proven domain speculation methodology and automated valuation IP, the DomainMarket.com domain acquisition team acquire undervalued domain properties with the potential for revenue and value optimization through a mixture of domain and categorically appropriate PPC, revenue share, and web development monetizationRUNON. Once values are near maximum levels domain inventory will be listed for sale on DomainMarket.com as well as marketed through the
DomainMarket.com newsletter,and other validated partner premium domain sales channels.
By branding itself as the place to list, monetize, buy and sell premium domains and through the utilization of Mike Mann’s domain industry contacts, DomainMarket.com posseses the unique ability to aggregate a portion of the world’s best unused domains.
Through establishing a reputation as the “premium only” domain listing and services site and by exploiting the viral capacity of Mike Mann’s large domain industry network and
Mike’s reputation as a domain industry leader and visionary DomainMarket.com anticipates a large domain sale pipeline to be quickly developed. RUNON
The DomainMarket.com domain acquisition team will vet the domain sale pipeline through its automated valuation application and will acquire undervalued domains that are readily accessible. The DomainMarket.com owned domain inventory will be reviewed and monetized for maximum revenue generation. This monetization will provide a significant source of cash flow for operations and additional domain acquisition as well as maximize the value of the inventory for resale.
Mike Mann’s success purchasing, developing, and selling premium domain names is well documentedLINKS. Over the past year Mann, with noautomation or sales team, has
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purchased premium domain names at an average price of $1,858 and sold them at an average price of $21,286. The bought versus sold spread equates to an ROI of over
1,000%.
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Domain Development Services Revenue Model:
Few domain owners possess the knowledge, skills or resources necessary to exploit best business practices and leading-edge technologies to develop their premium domains into full-blown media properties and businesses, thus extracting maximum value.
DomainMarket.com has developed a process whereby the DomainMarket.com domain development team utilizes a suite of development services to best enable a domain for monetization. These development services range from full business plan development and best practices, inclusive of financial modeling, website development with integrated
SEO and SEM, branding, and marketing, to web site development with the sole purpose of best monetizing and driving organic and marketing-generated traffic. If done properly, a fully developed website will typically extract the highest value out of a domain property. That said, the depth of development of a domain and its corresponding website is generally based on the nature of the specific domain name and the category to which it relates. Examples of sites successfully built by Mann and his team include……
Select developed and “ebusiness monetized” domain names will be kept in
DomainMarket.com’s portfolio to generate cash flow, while others will be developed, monetized, and then packaged for resale. All of the DomainMarket.com portfolio domain names selected for development will support natural type-in traffic, high search engine ranking and will be category-specific. For example, RockConcerts.com is a current DomainMarket.com asset that embodies each of these characteristics. An easy to use, well-designed website with meaningful information and services for visitors will generate PPC and CPA revenue and can be easily monetized via revenue share and affiliate relationships.AWK and not a real site Additionally, by incorporating social media network functionality and attributes greater user loyalty and the opportunity for more targeted advertising can be attained; both of which will result in increased revenue.

Domain Monetization Services Revenue Model:

With a major decline in the CPC monetization opportunity as a result of Google’s relevancy algorithm and technology adjustments, and the fact that CPC domain parking is not, on its own, a viable monetization method for highly brandable, low-traffic domains, domain owners are unsure of their future. The current domain monetization parking platforms seem just as confused and are grasping at straws to find a solution. In addition, as the number of registered, undeveloped domain properties continues to grow, the demand from domain owners for monetization services will only increase.
Save below for parking offering
CPC and CPA Advertising Revenue Model:
Until the past year or so when Google refined its technology and service to provide advertisers with the ability to exclude advertisements from showing up on domain parking sites and adjusted their spam algorithm to block parked pages without relevancy,
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CPC and CPA had been the easiest means of domain name monetization. While this adjustment by Google sent shockwaves throughout the industry, Mike Mann was not surprised and had been expecting this scenario. Mike’s focus and DomainMarket.com’s solution rest squarely on the premise that premium domain owners can and should develop their domain properties into true websites with purpose and value. Not only does this result in greater organic traffic and revenue generation via other monetization tactics
(i.e., affiliate relationships) but it translates directly into higher indexing by search providers like Google and Yahoo!, which in turn results in higher CPC rates and more revenue.

Domain Brokerage Revenue Model:
DomainMarket.com will provide a suite of domain brokerage services to domain buyers and sellers. The primary buyer type DomainMarket.com will serve is the retail buyer.
These are buyers who want a domain to develop into a website with a unique look and feel and original content. These buyers are not typically holding the domain as an investment and are willing to pay any price that is below their own perceived value of the domain. Usually, these buyers are prepared to purchase premium domains without any external valuation or advice as they are fulfilling a business or personal need. Again, these buyers are looking for domains that are immediately available, fit for purpose, and represent real value to their applied use ( Fabulous Research Aftermarket Domain Buying
Behavior).
Buyers will have access to a unique “domain matching” service whereby the
DomainMarket.com domain development team will evaluate the buyer’s business plan to strategically help the buyer identify and acquire the most effective domain property. In addition, once the domain has been identified DomainMarket.com, through two strategic partnerships (i.e., Domain Capital and Escrow.com- shouldn’t reference if unsigned), can help the buyer finance the purchase of the domain and manage the transfer of the funds and domain ownership via an escrow process. Of equal value and importance,
DomainMarket.com will assist sellers through a menu of services including domain appraisals, listing for sale on DomainMarket.com and the DomainMarket.com newsletter, marketing the domain sale through a network of premium domain-centric partner channels, and listing the domain in the DomainMarket.com monthly live digital auction.
For those domain owners looking for a means of residually monetizing their domain property in the most low-maintenance yet effective manner, DomainMarket.com provides a domain leasing service. Included in this service is the marketing of the available domain, lease documentation, and ongoing transaction management. In addition, if leasing is of no interest, DomainMarket.com can assist premium domain owners interested in utilizing the equity in the domain with domain asset borrowing. Unlike traditional real estate finance sources, domain name finance is an emerging business; the underwriting guidelines are subjective and evolving.
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Historically, marketing has been divided into four areas. These areas are product, price, placement (distribution), and promotion. For DomainMarket.com, aftermarket premium domain names are the product and they are stocked. Price will be established by the domain owners and by the DomainMarket.com sales team for our portfolio. Promotion will be the key responsibility of the sales team and lead generators (partners, brokers, etc.).
Growth is fueled by distribution. Without increased distribution and aggressive marketing the
DomainMarket.com marketplace and domain sales will be limited. In the current domain marketplace most domain sales are generated through reactive domain portals. In order to increase premium domain sales and valuations distribution will be aggressively promoted by
DomainMarket.com. Utilization of Mike Mann’s network, strategic partnerships and aggressive commission structure will support this effort, leveraging popular methodologies outlined in his book Make Millions and Make Change (www.globalpress.com/mikemann/).
Proactive lead generation is the lifeblood of premium domain sales. Without lead generation partners DomainMarket.com would be left relying on the same reactive model that is currently employed by domain sales portals. DomainMarket.com will manage its lead generation channels by maintaining clear communications and exchange of data. The primary responsibilities of this process are to:
• Provide an open distribution system for communicating domain availability and status;
• Control the valuation and listing algorithm for domains that are distributed; and,
• Filter domain searches to correspond to any specific criteria set for any specific distribution partners as well as those set by any domain owners.
To support its internal sales team and lead generation (distribution) partners DomainMarket.com will immediately launch and maintain a high volume of proactive marketing. A combination of channel relationships (i.e., small business portals like Yahoo! Small business, US Chamber of
Commerce), co-branding opportunities with top tier domain industry service providers and
DomainMarket.com monetization partners, conference sponsorships, emailing and newsletter distribution, and viral efforts via the DomainMarket.com network of premium domain sales brokers and Mike Mann’s vast list of premium domain owners and buyers, will all be utilized.
These efforts should lead to greater premium domain sales frequency, greater premium domain demand, and increased domain valuation.
The DomainMarket.com sales team will solely focus on the conversion of sales leads into premium domain sales. It is easy to confuse the generation of leads with the actual conversion of those leads but they are very different activities. The sales team members will be responsible for displaying premium domain properties for sale and handling reactive premium domain sales activities. Once a sales lead is generated the sales team will:
• Qualify the potential buyer;
• Generate interest in buying domains;
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• Negotiate transactions;
• Collect purchase money; and,
• Manage the transfer of the domains to the buyer.
The DomainMarket.com commission plan will be tiered based on sales price. The company anticipates the need to maintain some flexibility but plans to implement a commission structure similar to the following:
Minimum Price
Maximum Price
-
-
Total Commission -
Sales Commission -
$10,000
None
20%
10% ($10,000 - $29,999)
8% ($30,000 and up)
Lead Gen. Comm. - 10% ($10,000 - $29,999)
12% ($30,000 and up)
This would be the minimum commission for domains sold in the above ranges. If a domain owner is motivated to sell they will have the ability to increase the commission rate from within the domain sales administrative portal but in no event will a domain owner be able to reduce the commission levels below the above tiers.
Most importantly, it is extremely important to provide a rich enough incentive to the lead generates. Lead generators are the major contributors to the value chain and need to have a valid incentive to stay hungry.
If DomainMarket.com can implement and maintain a significant marketing footprint and distribution network then the rate of premium domain and service sales will trend upward at a significant pace. With even a marginal increase in the rate of sales it will dramatically increase the DomainMarket.com total portfolio valuation as well as the valuations of customer premium domains.
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 Founder & Management – need to fill it in more
Mike Mann - Founder
Mike Mann is Chairman and Founder of WashingtonVC, a private equity group whose portfolio of companies share resources, talent and technologies to deliver innovative digital products and services. (http://washingtonvc.com/)
In 1994 Mike founded Internet Interstate, a provider of Internet services aimed at assisting companies in utilizing the Internet and Internet technologies to grow and improve their businesses. In 1997 Mike sold Internet Interstate to Verio. After a brief break, in 1998 Mike founded BuyDomains.com, the world’s largest secondary market for domain names. Over the next seven years Mike and his team positioned
BuyDomains.com as the leader in the secondary domain marketplace and in 2005 sold a majority interest in the company to Highland Capital and Summit Partners.
(http://buydomains.com/)
Mike is the Founder and Chairman of Grassroots.org (501(c)(3)), a global network providing free services to nonprofits and promoting social action, and manages Make
Change! Trust, a charitable fund that supports select 501(c)(3) organizations.
(http://grassroots.org/) (http://makechangetrust.org/)
Lawrence Kalinowski – CTO
Lawrence Kalinowski is a seasoned technologist and domain industry expert. Mr.
Kalinowski brings a wealth of knowledge and industry experience to the DomainMarket.com team.
Lawrence joined DomainMarket.com in January 2008 with more than fifteen years of relevant experience specializing in domain name asset management and information technology.
Lawrence has worked with a number of successful startups and large corporations throughout his
15 year career. Prior to joining the DomainMarket.com team, Lawrence served as a Senior
Programmer at BuyDomains.com, the world’s largest secondary market for domain names, where he was responsible for leading a team of ten programmers.
Notably, Lawrence previously served as a Principal Consultant for Impact Innovations Group, where he managed large scale, strategic and operational initiatives to support The National
Archives Records Administration.
Lawrence is an expert UNIX administrator, software architect and quality assurance manager.
Lawrence holds a Bachelors of Science degree from the University of Connecticut.
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 Board of Advisors
Chip Yamasaki - Advisor
Eric Cantor – Advisor
Alex Ikenson – Advisor
Michelle Miller?
Eric Rice?
Matt Kalinowski?
Ron Jackson?
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 Roles & Responsibilities – fewer people, combined roles
Sales . DomainMarket.com will generate a majority of its revenue through a domain acquisition and sales team. This team will consist of two account executives that will sell
DomainMarket.com premium domain properties in response to online pricing requests and direct offers. In addition, the company will make domain sales through auction and via select premium domain brokers. We will continue to invest in our domain name valuation and acquisition technology and processes, with the end goal of automating these functions to the greatest extent.
Monetization Partnership Management.
Within the DomainMarket.com monetization partnership management team there will be two members. These individuals will be responsible for developing and managing third party software, service and affiliate monetization relationships.
Keyword Management. There will be one individual solely responsible for keyword advertising strategy and purchasing. Keyword advertising will be purchased to enhance the generation of Internet traffic for domain monetization as well as the general domain marketplace.
Domain Monetization . A domain monetization team, consisting of two individuals, will maximize the monetization of the DomainMarket.com domain portfolio. Management of this process will be mostly automated via a reporting and analytics engine and will to ensure the most effective monetization.
Technology. The DomainMarket.com technology team will consist of a CTO, a Product
Development Manager, three developers, a designer, and a quality assurance and usability manager. We will rely on third party providers for the co-location of our data servers and storage devices.
Customer Support. DomainMarket.com places significant focus on customer support.
With a focus on high-value premium domain names, DomainMarket.com will place equal focus on providing attentive and responsive customer support. The DomainMarket.com customer support team will be responsible for responding to online and telephone-based customer inquiries. All trouble tickets and support inquiries will be tracked using a support relationship management tool. Customer support team members as well as customers will have a support interface from which all issues can be tracked and managed.
Finance.
The DomainMarket.com finance team will facilitate all company accounting,
AR and AP, domain acquisitions, and partner revenue share assessments and distributions. The finance team will include a CFO and controller. As transaction volume increases a junior level finance manager may be added to the team.
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
Staffing Plan
Position
President & CEO
VP Sales & Marketing
VP Technology
VP of Finance
Controller
Director of Monetization
Monetization Manager
Keyword Manager
Partnership Manager
Sales Associate
Product Manager
Web Designer
Web Developer
Customer Service Manager
Customer Service Representative
TOTAL HEADCOUNT
Annual Salary Yr. End # of Staff Annual Salary Yr. End # of Staff Annual Salary Yr. End # of Staff
$250,000 1.00
$257,500 1.00
$265,225 1.00
$150,000
$150,000
1.00
1.00
$154,500
$154,500
1.00
1.00
$159,135
$159,135
1.00
1.00
$130,000
$80,000
$130,000
$65,000
1.00
0.00
1.00
1.00
$133,900
$82,400
$133,900
$66,950
1.00
1.00
1.00
2.00
$137,917
$84,872
$137,917
$68,959
1.00
1.00
1.00
2.00
$65,000
$75,000
$50,000
$75,000
$75,000
$80,000
$50,000
$30,000
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
$66,950
$77,250
$51,500
$77,250
$77,250
$82,400
$51,500
$30,900
2.00
2.00
3.00
2.00
1.00
2.00
1.00
3.00
$68,959
$79,568
$53,045
$79,568
$79,568
$84,872
$53,045
$31,827
1.00
2.00
1.00
5.00
2.00
2.00
4.00
2.00
14 24 27
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Cost of Sales
Payroll & Benefits
Staff
Payroll Tax
Workmen's Comp.
Benefits & Bonuses
Total Payroll
Domain Purchases
Domain Acquisition Costs
Total Domain Purchase
Marketing
Marketing
Total Marketing
TOTAL Cost of Sales
Operating Expenses
Fixed Rent (CAM & RE Taxes)
Rent (CAM & RE Taxes)
General Utilities
Telephone & Internet
Total Rent & Utilities
Insurance
Liability
Other
Total Insurance
Other Expenses
Travel & Entertainment
Professional Fees
Computers, Servers, Equipment
Bank & Credit Card Processing
Hosting & Network Fees
Personal Property Tax
Licenses & Permits
Miscellaneous
Total Other Expenses
TOTAL EXPENSES
TOTAL SALES
EBITDA
CASH FLOW (Accrued)
Year 1
FIVE YEAR P&L
Year 2 Year 3 Year 4 Year 5
$ 1,201,667
$ 216,300
$ 36,050
$ 60,083
$ 1,514,100
$ 1,959,575
$ 352,724
$ 58,787
$ 97,979
$ 2,469,065
$ 2,190,759
$ 394,337
$ 67,955
$ 109,538
$ 2,762,587
$ 2,322,575
$ 418,064
$ 69,677
$ 116,129
$ 2,926,445
$ 2,438,704
$ 438,967
$ 73,161
$ 121,935
$ 3,072,767
$ 3,600,000
$ 3,600,000
$ 3,300,000
$ 3,300,000
$ 3,000,000
$ 3,000,000
$ 3,000,000
$ 3,000,000
$ 3,000,000
$ 3,000,000
$ 240,000
$ 240,000
$ 240,000
$ 240,000
$ 240,000
$ 240,000
$ 240,000
$ 240,000
$ 240,000
$ 240,000
$ 5,354,100 $ 6,009,065 $ 6,002,587 $ 6,166,445 $ 6,312,767
$ 36,000
$ 3,600
$ 9,000
$ 48,600
$ 41,400
$ 4,140
$ 12,000
$ 57,540
$ 43,470
$ 4,347
$ 13,200
$ 61,017
$ 44,774
$ 4,477
$ 14,520
$ 63,772
$ 46,117
$ 4,612
$ 15,972
$ 66,701
$ 10,000
$ 8,000
$ 18,000
$ 10,500
$ 8,400
$ 18,900
$ 11,025
$ 8,820
$ 19,845
$ 11,576
$ 9,261
$ 20,837
$ 12,155
$ 9,724
$ 21,879
$ 36,000
$ 18,000
$ 36,000
$ 3,000
$ 20,400
$ 1,800
$ 3,600
$ 12,000
$ 130,800
$ 42,000
$ 14,400
$ 39,600
$ 3,150
$ 21,420
$ 1,980
$ 3,960
$ 13,200
$ 139,710
$ 48,000
$ 16,800
$ 43,560
$ 3,308
$ 22,491
$ 2,178
$ 4,356
$ 14,520
$ 155,213
$ 54,000
$ 18,480
$ 47,916
$ 3,473
$ 23,616
$ 2,396
$ 4,792
$ 15,972
$ 170,644
$ 60,000
$ 19,404
$ 52,708
$ 3,647
$ 24,796
$ 2,635
$ 5,271
$ 17,569
$ 186,030
$ 5,551,500 $ 6,225,215 $ 6,238,662 $ 6,421,697 $ 6,587,377
$ 2,865,000 $ 7,456,500 $ 13,279,500 $ 20,139,000 $ 28,035,000
$ (2,686,500) $ 1,231,286 $ 7,040,838 $ 13,717,303 $ 21,447,623
$ (2,686,500) $ (1,455,215) $ 5,585,624 $ 19,302,926 $ 40,750,549
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Five Year Sales Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Sales
DM.com Domain Sales
Domain Monetization
Advertising - CPC, CPA, CPM
Domain Development
Domain Brokering
Total Sales
$ 1,440,000
$ 720,000
$ 600,000
$ 60,000
$ 45,000
$ 2,460,000
$ 2,520,000
$ 2,160,000
$ 132,000
$ 184,500
$ 3,780,000
$ 4,800,000
$ 4,200,000
$ 216,000
$ 283,500
$ 5,160,000
$ 7,560,000
$ 6,720,000
$ 312,000
$ 387,000
$ 6,600,000
$ 10,800,000
$ 9,720,000
$ 420,000
$ 495,000
$ 2,865,000 $ 7,456,500 $ 13,279,500 $ 20,139,000 $ 28,035,000
Sales Assumptions
1/ Avg. # of Monthly DM.com Domain Sales
2/ Avg. Domain Sale
3/ Avg. monthly monetization per domain (w/o ad sales; DM.com and DM.com customer cut)
4/ Avg. monthly ad revenue per domain (DM.com & DM.com cut from customers)
5/ Avg. # of monthly domain development customers
6/ Avg. monthly domain development sale
7/ Avg. # of domain sales brokered per month
8/ Avg. domain brokerage fee paid to DM.com (assumes a commission of 15%)
9/ Number of Domains being monetized per month (including ad monetization)
10/ Domain brokering will not be offered until month 7 of Year 1
Yr. 1
12
$ 10,000
$ 60
$ 50
5
$ 1,000
5
$ 1,500
1,000
Yr. 2 Yr. 3
20
$ 10,250
$ 70
$ 60
10
$ 1,100
10
$ 1,538
3,000
30
$ 10,500
$ 80
$ 70
15
$ 1,200
15
$ 1,575
5,000
Yr. 4 Yr. 5
40
$ 10,750
$ 90
$ 80
20
$ 1,300
20
$ 1,613
7,000
50
$ 11,000
$ 100
$ 90
25
$ 1,400
25
$ 1,650
9,000
The following financials can be provided upon request:

Five (5) year, monthly expense forecast;

Five (5) year, monthly sales forecast;

Five (5) year, monthly cash flow forecast; and,

Three (3) year, monthly hiring plan.
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DomainMarket.com, LLC is a Maryland limited liability company. All membership units of the company are owned by Mike Mann.
DomainMarket.com seeks to raise $___________. The full investment of $__________ will acquire _____ Percent (__%) ownership interest in DomainMarket.com and its premium domain name portfolio.
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.Org
7%
Types of Domain Names Registered in US
.Info
2%
5%
.Biz
.Com
75%
.Net
11%
Source: Webhosting Info, 2007
VeriSign estimates that 89 percent of .com and .net domain names resolve to a website, meaning that an end-user visiting that domain name would find a website. These websites can be further described as those having a multiple page website or a one-page website, which would include under-construction and parked pages.
One-Page Web Sites
Multiple Page Web Sites
No Web Sites
23%
65%
11%
The above statistics are based on 80,274,081 domain names analyzed by Verisign in 2008.
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When comparing spam sites to good sites the Google “secret” document states:
To appreciate the difference, ask yourself this question: would any user want to go to www.bookfinder4u.com rather than directly to Barnes & Noble? To http://us.storedirectory.org/dvd/movie/B00005JM5E.html rather than to Amazon? The answer to the former question is Yes, because at Barnes & Noble, the user would not be able to see any direct price comparison between the B&N’s price and competitors’ prices for any given item; the answer to the latter question is No or Indifferent between the two.
They also bolded the following statement:
To determine whether participation in affiliate programs is central or incidental to the site’s existence, ask yourself this question: Would this site remain a coherent whole if the pages leading to the affiliate were taken away?
Automation VS Unique & Useful:
As a summary, most search spam sites are heavily automated and provide little useful, unique, or compelling to the end user.
Why the Spam Guidelines Document is Useful:
Google's reviewers may not be used to directly affect search results, but at the very least they are used to help train the relevancy algorithms. By seeing how Google trains them you get to see what Google wants. If you know what they are looking for it is far easier to give it to them.
Just like pay per click, SEO is a game of margins. Search engines aim to decrease the margins on both fronts so they can extract maximum profits. Automation can bring great returns until it is caught. Algorithms, editors, search reviewers, and other webmasters who may link to you all look for reasons why people should WANT to visit your site instead of thousands of competing sites. Due to a lack of sophistication, in the past many people were making large sums of money from low quality bulk affiliate or AdSense websites or parked pages. Owning a few of those types of sites was a good call for creating passive revenue streams, but things have changed.
 If it's a machine-generated, no added value affiliates, it's Spam. If it provides some unique values, for example, customer feedback, local information, it should be rated on the merit scale even if it has some affiliates. Similarly, if the game site allows you to download a game, without being intrusive (i.e. install a spyware without notice), it should be rated on the merit scale, instead of Spam.
Search Classification Types:
The Google review guide classifies searches as being
 Navigational (example: a search for United Airlines)
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


Informational (example: how do I…)
Transactional (example: buy 18K White Gold Omega Watch)
Any mixture of the above categories.
Resource Quality Rating:
Google then asks raters to classify sites listed in random queries using the following categories:
 Vital
Most queries, especially generic type queries do not have a Vital result.


Vital result example: search for Ask Jeeves returns www.ask.com.
 Useful
These should have some of the following characteristics (although it likely will not exhibit all of them): comprehensive, quality, answers the search query with precision, timely, authoritative.
This is the highest rating attainable for most pages on most search queries.
Useful result example: search for USA Patriot Act returning the ACLU page covering the USA Patriot Act.

For some plural queries, such as Newspaper s in Scotland, the best results may be lists of related sites. Reviewers must also check some links on the page to ensure the page is functional.
Relevant
One step down from Useful. Relevant results may satisfy only one important facet of a query, whereas Useful results are expected to be more broad and thorough.
Results that would have been Vital if a more common interpretation did not overshadow it are considered relevant.
 Not Relevant
Not Relevant results are related to the topic but do not help users.
If a person searching for Real Estate finds a San Diego Real Estate website that would probably not be relevant since most people searching for that do not live in or want to move specifically to San Diego.
As the San Diego example is too narrow geographically other sites could also be too narrow in other non-location based ways, such as being outdated or too specific to a subset idea of the query.
 Off Topic
Is not a useful page. Irrelevant.
Usually occurs when text matching algorithms do not account for some terms that can have multiple meanings.
 Offensive
Pages or sites that often do not hold merit on any query.
Example Offensive sites: spyware, unrequested porn, AdSense scraper and other keyword net type sites, etc.
Erroneous
Didn't Load
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

Foreign Language
Unrated
Vital to Offensive are in order of quality (the higher the better). Erroneous through Unrated are cast as non-votes. When in doubt between rating values raters are expected to rate at the lower of the two rating values.
Why this is Important:
By learning how and what they Google wants evaluators to look for it makes it easier to understand how to deliver what the search engines want.
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AN OVERVIEW OF THE DOMAIN INDUSTRY AFTERMARKET
The purpose of this document is to produce a Secondary Domain Name Market industry overview to guide strategic decisions for DomainMarket.com as we roll out Phase 1 of the business. It is through the lens of our competitors business that we will leverage our unique value proposition.
When looking at the secondary domain market (SDM) it is important to understand the key components that contribute to the market and functioning of the market.
The Secondary Domain Name market is primarily comprised of the following components:
Registrars
Go Daddy, Enom, Tucows (pronounced “Two Cows”) and Network Solutions are the top four registrars in terms of volume of names registered through them globally.
Marketplaces
This includes markets for currently owned domain names and soon to be expired domain names.
Key players include Sedo, NameMedia, Go Daddy, NameJet, SnapNames, and Afternic.
Parking Platforms
Parking platforms provide monetization of domain name assets. Heavily reliant on ad networks such as Google, Yahoo, and MSN domain monetization companies include TrafficZ, Domain
Sponsor, Skenzo, and ParkLogic.
Similar to many other large industries, in the secondary domain name market there are several large players owning a majority of the market share and then a number of other complimentary companies that fulfill various “one-off” industry demands. In addition, the industry is presently undergoing a period of consolidation, and recognition from the financial markets as to the longterm opportunity within the industry.
From a big picture perspective it is important to note what has changed over the past ten years.
In the late 1990’s, prior to the true formation of the secondary domain name market, Network
Solutions was only one place to register .com and .net (the most common TLDs) domains.
Domain names cost US $70.00 to register and the registration was valid for one year.
At this time there were no robust interfaces or online tools to find domain, buy and manage domain names, such as those found at www.sedo.com and www.buydomains.com today.
Typically, individuals relied on Internet professionals to find and register available domain names. Many of the domain names that are considered “premium” today were not registered; the domain name speculation industry was immature, and littered with low hanging opportunity.
While a handful of people recognized the opportunity, the barriers to the entry that existed for
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the general population and most businesses to start an “ebusiness” prevented much activity. This atmosphere drove down the demand for and value of domain names.
The costs and expertise necessary to create an ecommerce business inclusive of credit card processing and now basic tools like shopping cart functionality were astronomical and little if no
“out of the box” ecommerce software existed. Content management systems to facilitate the efficient publishing by non-technical resources of corporate web site content were extremely limited. Search and website database functionality was in only in its infancy, and Madison
Avenue had not accepted the Internet as a legitimate advertising venue.
In the late 1990’s, there was no notable secondary domain name market. The market was almost exclusively a primary market in which participants would register domain names of interest for themselves or on behalf of interested parties. In most cases an Internet Service Provider or a web development firm would register a domain name on behalf of clients. Pre-emptive domain name acquisition was rare. Certain industries, however, did tend to be more pre-emptive about registrations than others, including airlines, computer operating system developers, and national retail chains.
All of the factors noted above contributed to dampen the growth of the secondary domain name market. In contrast, today’s secondary domain name marketplace has matured and is entrenched in the fabric of international business process. Corporations, business owners, and consumers now understand the linkages between an appropriate domain name, their business purpose and their corporate profile. Business and individuals alike are pro-active about acquiring suitable domain names for both marketing and investment purposes.
Domain names are not only used to identify companies online but are employed to bolster promotional campaigns and branding. Due to the internationalization of the Internet and consumers reliance on search as a primary means to locate their desired information, goods and services, the domain name has become a critical element in reaching of the business objectives.
The domain name has in fact become the location in which many businesses communicate and even conducts their business. Further, it is commonly accepted that consumers will search for and purchase goods and services online. With 75% of the US population online, according to
Deloitte, consumer reliance on search engines such as Google, Yahoo!, and MSN, as a primary means to locate what they are looking for increases the demand for premium domain names that rank high in natural search results.
The large scale and continued deployment of broadband Internet services globally, and the widespread adoption by consumers of the Internet for shopping, travel, research, and communications have all contributed to the exponential growth of the secondary marketplace for domain names.
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The following text provides a high level overview of the secondary domain name marketplace and key industry players. DomainMarket.com seeks to differentiate itself from the competition by taking advantage of our vast industry expertise, good will and contacts, proprietary methods for acquiring and valuing domains, and superior customer service. We intend to elevate the playing field and focus solely on the premium portion of the domain market.
KEY PLAYERS IN THE SECONDARY DOMAIN NAME MARKETPLACE
Sedo, LLC:
SEDO is an acronym for “Search Engine for Domain Offers”.
SEDO was founded in 2001 and has headquarters in Cologne, Germany, London, UK, and
Boston, Massachusetts. Sedo employs over 150 people and is majority owned by AdLINK
Group, which is part of the German United AG.
Sedo provides one of the largest secondary markets for domain names. In addition to buying and selling domain names, Sedo offers an array of services that are complimentary to their domain name brokerage business. Sedo’s primary business line is the sale of domain names through both live and Internet auctions. The provision of secondary services, including domain name parking, appraisals, escrow, and watch list services, compliments the core domain sales business and keeps customers from unnecessarily straying to competitors.
Sedo claims to have 690,000 members, 11.5 million domains names for sale, and 3.2 million domain names on their parking platform.
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Sedo membership is free and allows members to list domains for sale, park domains, and to participate in live and online auctions to purchase and sell premium and non-premium domain names.
Sedo.com is offered in English, German, Spanish and French currency and language versions.
This internationalization is a convenience to non-US and non-English speaking visitors as well as fosters development of Sedo’s international customer base.
Across all of the gTLDs and ccTLDs, .com has the highest base followed by .de (Germany), .net and .cn (China). The fifth spot is shard by .uk (United Kingdom) and .org with approximately the same size base of domain name registrations.
2
Sedo’s recognition of and focus on the scope of international opportunities is supported by these metrics.
While Sedo’s site has over 10 million domain names for sale the caliber of these names is perceived to be low compared to DomainMarket.com.
In July 2006 Sedo acquired GreatDomains.com to provide an auction venue for premium domain names. This acquisition was an attempt by Sedo to create a “premium domain” business line and was a separate service from their primary, non-premium domain name auction. Examples of
1 Sedo.com > About Us. https://sedo.com/about/index.php3?tracked=&partnerid=&language=us
2 Verisign “The Domain Name Industry Brief”, March 2008
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domains listed on GreatDomains.com include Rentaloptions.com, with a reserve of US $15,000, and Instantphoto.com, with a reserve of US $150,000. Recently sold domains via the
GreatDomains.com interface include Auto.es for $110,000 Euro and Beijing.de for $35,000
Euro.
During 2007 Sedo’s total domain name sales revenue was reportedly $72,132,458. This represents a 60% increase from 2006. Notable secondary market domain name sales included
Chinese.com for US $1,100,000, Li.com for US $500,000 and Gibraltar.com for US $360,000.
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The Go Daddy Group, Inc.:
The Go Daddy Group, Inc. is located in Scottsdale, Arizona, and has over 1500 employees. In
2006 Go Daddy’s sales exceeded $101,000,000.
Go Daddy was founded in 1997 by Bob Parsons, who is well known both inside and outside of the domain industry. Go Daddy played a large part in bringing the domain industry to the main stream via its often “edgy” advertising campaigns. The company has experienced rapid growth in its short history and has raised its public profile in recent years with an advertising campaign that included controversial Super Bowl commercials. Go Daddy filed to go public in 2006, but later withdrew citing unfavorable market conditions.
4
Go Daddy is ranked by RegistrarStats.com as the largest domain name registrar internationally, followed by eNom, and Network Solutions. As of June 29, 2008 Go Daddy has 26,030,704 domain names under management. During the period from June 29, 2006 to June 29, 2008 Go
Daddy added an average of 574,000 domain names per month to its inventory of managed domain names. eNom currently has 8,811,236 registered domain names under management and
Network solutions has 6,685,240. A view of the top three registrars highlights Go Daddy’s market domination in this arena.
In addition to domain name registration services, Go Daddy has a suite of utilities that make it easy for users to create and register new domain names, purchase domain names on the secondary market, and to transfer large portfolios of domain names to the Go Daddy platform.
Go Daddy clients are offered domain management and renewal, registration, transfer, and monetization services. Clients also have access to domain auctions and enhancement offerings such as registration protection services as well as web site hosting, and blog and podcast hosting.
For servers, virtual dedicated, dedicated servers and dedicated IP services are available.
Once a client has purchased or registered a domain name and have selected a hosting plan,
Godaddy.com offers “do it yourself” website building tools, custom built website services, and site enhancement utilities. To bolster the security of data that flows via its customers websites
Go Daddy offers SSL Certificates.
3 Sedo, 2007 Secondary Domain Market Study.
4 2008, Hoover's, Inc.
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Available Go Daddy marketing services include email marketing, logo design and custom website design. Merchant accounts and shopping carts are also made available to facilitate the process for domain owners of starting an ecommerce business.
To compliment its other product and service offerings, clients of Go Daddy have access to email services including email accounts, fax thru email and express email marketing. Domain auctions are also available to Go Daddy clients via Godaddy.com. Participants may view domain auctions, bid on and buy existing domains and have domains appraised and sold at auction.
For the aspiring Internet entrepreneur, Go Daddy provides a reseller program that gives participants the ability to resell over 50 Go Daddy products. All resellers work under Go
Daddy’s Wild West Domains brand ( www.wildwestdomains.com
).
In mid 2007 Go Daddy announced that it was launching “Signature Auctions” to provide a market for domains valued at $10,000 and above via TDNAM ( www.tdnam.com
). This move was motivated by the desire to differentiate premium versus non-premium domain inventories.
Go Daddy is differentiated from many of the industry participants which include other registrars, domain resellers, and parking companies, by the sheer volume of domains under its management.
The company is also differentiated by the outspoken and self-promotional nature of its CEO Bob
Parsons who for 24 month ending 3/12/2008 hosted a weekly radio show to discuss issues surrounding recent Go Daddy media campaigns, popular culture, technology and the domain industry in general. Go Daddy’s media and branding campaigns, which include the Go Daddy
Girls, is unique for the domain and Internet industry. Its reliance on celebrity athlete endorsements is also unique for the industry. Currently, Indy racecar driver Danica Patrick is the primary celebrity spokesperson for Go Daddy.
Since its inception in 1997, Go Daddy has emerged as a leader in the domain registration space and has created a high volume secondary market for the purchase and sale of domain name assets.
NameMedia, Inc. make this first, clarify it was founded by Mann
NameMedia was created in February 2005 and is located in Waltham, Mass. NameMedia was created to purchase Rare Names and RareDomains.com, which launched in 1999.
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Since that time, the company has spent about $63 million acquiring eight similar companies including
SmartName, Visionary Networks, and Premium Domain Name Portfolio.
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Mann and his team currently own approximately 15% of NameMedia, making Mann its largest noninstitutional shareholder.While DomainMarket.com competes with NameMedia, Mann no longer has any
“noncompete” restrictions.
Rare Names and RareDomains.com are better known as BuyDomains.com. Mike Mann founded
BuyDomains.com, in 1999. BuyDomains.com rapidly grew to be the largest secondary market
5 NameMedia, Inc. Form S-1 Registration Statement Under The Securities Act of 1933.
6 2008, Hoover's, Inc.
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for domain names and continues to be the leader in this space.
Visitors to BuyDomains.com are presented with a number of tools and services related to the purchase and sale of domain names as well as web development tools to enable better monetization.
At the root of the BuyDomains.com site is find domain name search technology. Visitors to the website can conduct searches by keyword, category, and price. Users are also presented with advanced search tools that allow them to search by category/subject, extension (.com, .net, .org, etc.), price range, and word matching. Search results include domains with prices and nonpriced names that require a submission of interest.
Domain purchasers are also presented with domain financing services. For BuyDomains.com, domain name finance services are provided by Domain Capital and dual branded with
BuyDomains.com. Domain Capital is a leader in the domain finance space and is well known throughout the industry. They offer clients loans equal to 60% of the domains value. Typically, rates are at or around 15% and based on a five year payment term. In some cases borrowers can obtain a loan equal to 100% of the value of the domain name that is structured into two loans.
The first is loan is equal to 60% of the domain name value and the second loan is equal to 40% of the domain name value. The 40% second loan is typically a short-term balloon and may be converted by the lender into equity in the domain.
Visitors to BuyDomains.com are given the option to sell domains via the online marketplace.
BuyDomains.com will list domain names for owners as well as attempt to purchase portfolios of domain names from owners. Sellers are required to register for an AfternicDLS membership in order to sell their domains. Currently, there is a $19.95 annual membership fee for this membership. The standard Buy Domains.com commission is 20% and is remitted by
BuyDomains.com when the domain has been sold via their marketplace.
BuyDomains.com provides website building tools to enable clients to take their domains and turn them into operational websites for monetization. The website builder self-service platform simplifies the process for users. To compliment this service BuyDomains.com also provides a logo design service, email marketing service, web site hosting and domain name registration service. Additionally, to round off the services offering BuyDomains.com clients are provided with resources for website promotion including Search Engine Optimization (SEO), Search
Engine Marketing (SEM), and Web Analytics Reports.
The content management website development system, logo design and email marketing services are each provided by third party vendors. BuyDomains.com is effective at presenting these services to clients as well as bundling them in relevant packages.
In addition to the revenue derived from the sale of domain names and complimentary services detailed above, BuyDomains.com derives a significant amount of income from online advertising revenue. With over 2,250,000 domains under management, of which the company
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owns 750,000, BuyDomains.com derives advertising revenue via monetization of high-quality domain names.
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The critical mass created by controlling millions of domain names has been a corner stone for the success of the BuyDomains.com ad network. Yet, the founders of DomainMarket.com believe that market forces have changed such that the quality of the domain name collection outweighs the quantity of names. Domain quality is defined as relevance to an audience and an ability to attract visitors who convert. While the quantity of domain names currently under the control of
DomainMarket.com is tiny compared to BuyDomains.com the quality is superior.
BuyDomains.com attracts web site visitors with category defining domain properties, which include sales lead generators CellularPlans.com, and LowRate.com as well as
TennisClinics.com, Gardens.com, Photography.com, and other online "communities".
Collectively, NameMedia's sites receive more than 60 million visitors per month.
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NameMedia generated $61 million in revenue in 2006 and $58.3 million in revenue during the nine months ended September 30, 2007. The company generated $28.5 million in adjusted
EBITDA in 2006 and $24.1 million during the nine months ending September 30, 2007.
NameMedia’s media business accounted for approximately 49% of revenue in 2006 and 52% of revenue between 1/1/07 and 9/30/07. NameMedia’s domain name marketplace accounted for approximately 51% of revenue in 2006 and 48% of revenue between 1/1/07 and 9/30/07.
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On November 7, 2007, NameMedia filed a Form S-1 registration statement in an effort to take the company public on the NASDAQ Exchange. The proposed maximum aggregate offering price is $172,000,000. The company has yet to go public.
Snapnames.Com, Inc.
SnapNames is located in Portland, Oregon and was founded in 2000. SnapNames.com is a leading marketplace for the purchase of expired domain names. The company provides the interface and tools needed for a range of clients who seek to monitor, backorder and bid on expired domain names.
Access to a majority of the SnapNames.com resources requires a SnapNames user account.
SnapNames clients are invited to backorder currently registered domain names, to place bids on domains that will be “expiring soon” and to bid on names that are “in auction”. The
SnapNames.com system automatically notifies participants when key events occur that are related to the domains they are pursuing. Examples include auction start, auction end, and notifications when a participant has been outbid.
Auctions can be monitored by clients via an online interface. Data points including the current bid, maximum bid, high bidder, status, auction end date and domain name drop date can be
7 Namemedia, Inc. Form S-1 Registration Statement Under The Securities Act of 1933.
8 2008, Hoover's, Inc.
9 Namemedia, Inc. Form S-1 Registration Statement Under The Securities Act of 1933.
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tracked for each domain name. Auctions may last from 1 to 14 days. SnapNames assures clients they have taken steps to prevent shill bidding, sniping and other abuses.
SnapNames’ parent company is Oversee.net; a Los Angeles, California based company whose primary focus is domain services and monetization. In addition to being the parent company for
SnapNames, Oversee.net owns DomainSponsor, which they acquired during June 2007. The company’s annual revenue topped $200 million in 2007, which was up from $125 million in
2006.
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Oversee.net acquired Moniker in January of 2008 to produce and manage the
SnapNames live auction marketplace.
SnapNames provides a robust secondary marketplace for expired domain names. The company has over 1,000,000 expired and privately held domains for sale via http://www.snapnames.com
.
According to the SnapNames website, the company has over 20,000 fresh, expired domains flowing into its inventory daily.
SnapNames maintains an exclusive relationship with leading registrars, like Register.com, for whom it auctions off expired, non-registered domain names via the SnapNames market.
Register.com is the ninth largest domain registrar with 2,700,000 domains under management as of the end of June 2008.
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Under the terms of the agreement, domain names registered with
Register.com but released by their previous registrants are exclusively offered on the SnapNames auction platform.
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Overview
The following table details the relationship between leading registrars and leading aftermarket domain resellers. The table details each registrar, their rank in terms of how many registered domains they manage, and which aftermarket “drop catcher” they feed expired, non-renewed domains names for resell. In total, as of June 30, 2008 these registrars manage 50,626,075 domains.
RANK REGISTRAR # REGISTERED 13 DROP CATCHER
3
4
9
1
2
Go Daddy
ENOM / NSI
Network Solutions
Tucows
Register.com
26,045,126
8,812,809
6,684,503
6,389,691
2,693,946
TDNAM
NameJet
NameJet
Afternic
SnapNames
Average renewal rates for .com and .net are 75%. What this means is that 25% of all .com and
.net domain names that are registered expire without being renewed. At the end of Q1 2008 the
10 Domain Name Journal Article written by Ron Jackson. http://www.dnjournal.com/cover/2008/march.htm
. Ron Jackson is leading expert on the domain name industry.
11 Registrarstats.com - http://www.registrarstats.com/Public/RegistrarMarketShareMain.aspx
12 http://www.thewhir.com/marketwatch/060508_SnapNames_Register_com_Renew_Deal.cfm
13 Registrarstats.com - http://www.registrarstats.com/Public/RegistrarMarketShareMain.aspx
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adjusted base of registered .com and .net domain names was 84.4 million.
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If 25% of those domain names expire without being renewed a pool of 25,320,000 domain names is presented on the secondary market, thus creating significant opportunities for aftermarket resellers to capture inventory.
“Drop catchers” like SnapNames have gained a significant advantage as a result of the exclusive arrangements they have negotiated with registrars, thereby giving them “first crack” at expired domain names. SnapNames’ competitive advantage would be significantly diminished without such exclusive arrangements.
SnapNames is differentiated by their ability to act as a conduit for consumers who seek to position themselves to purchase expired, non-renewed domain names. Further, SnapNames presents an avenue for registrars to monetize a higher percentage of their expiring names. The minimum bid for backordered domains is $59.00. This fee is split between SnapNames and their registrar partner. While not all expired names are re-purchased, companies like SnapNames provides a reasonable opportunity for the registrars to immediately capitalize on expired names.
Other leading domain name aftermarkets include TDNAM, NameJet, and Afternic (A
BuyDomains.com property. Each of these companies maintains a close relationship with a leading registrar. Each provides a comparable set of online utilities to allow for the efficient purchase and registration of expired, non-renewed domain names. It is common for domain professionals/speculators to monitor and participate in all of the prevailing domain name aftermarkets since each provides exclusive opportunities to expand their portfolios.
DOMAIN NAME MONETIZATION
Domain name parking is is one of the primary sources of domain name montetization. Parking is the process by which individual and large domain name portfolio owners earn revenue from their domain properties without publishing content manually to each domain. When a visitor goes to a parked page, website content including links and advertisements is posted dynamically and is based on a number of variables, including category (i.e. finance).
Most parked pages are accessed via natural type-in traffic. This occurs when an Internet user types a domain name, such as “medicaldevices.com” into their browsers address bar. They are then taken to the parked page via direct navigation. In such scenarios a search engine is not used.
The leading parking companies include Domain Sponsor, TrafficZ, Skenzo and ParkLogic. Each of these entities provides domain name owners with monetization services, back-end customer administrative interfaces, portfolio management utilities and access to international advertising networks.
It is more common for parking companies to work with owners of large portfolios of domain names as opposed to those individuals who own one or a few domains. There is often a revenue
14 The Verisign Domain Report, Volume 5 - Issue 3 - June 2008
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share model in which the parking company maintains a disproportionate share of the revenue generated. Typically, Google, Yahoo!, and MSN advertising networks provide advertisement feeds that pay on a “per click” basis.
Parked domain names are monetized when users click through ads that appear on the parked webpage. The ads, links and the content provided may be dynamic and based on the criteria like time of day of the visit occurs, the geographic location from which the website visitor is accessing the Internet, and the domain name category. Most leading domain parking platforms automatically provide keyword, semantic and landing page optimization to increase visitor conversion rates and revenue.
As a rule, the more “generic” or “category specific” a domain name is the higher its relevance is to visitors. These factors increase conversion rate and revenue. DomainMarket.com maintains a significant portfolio of generic, category specific names with tremendous monetization potential.
In addition to actively growing its portfolio of premium names, WashingtonVC is currently building a proprietary parking platform to further monetize its premium domain assets and avoid unnecessary and inequitable revenue shares with parking companies.
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Price Request Interface – review proprietary components
When a price request has been submitted to the PRI it is assigned a unique ID, time stamped and tracked by the domain name. Key data points relating to each inbound price request are stored, including pertinent requestor contact information, the requestors IP address, purchase time frame and intended use.
For each price request the following domain statistics from the Domain Valuation tool are examined:

Registration Date and Cost

Registrar

Expiration Date (Whois)

Source

Earliest web archive date
In addition, traffic statistics including those referenced below are tracked:

Daily/15yr Revenue

Direct Hits (30 Days)

Total Hits (typed + referred)

Daily Traffic

Direct URL hits since start date
Historical data on each domain is collected in the Domain Valuation tool and examined through the PRI. In addition, a trademark check is performed on each name. Pertinent search engine data including Yellow Pages, Google and Yahoo! word counts are examined along with a
Google link count.
The number of occurrences of each domain across all top level domains, such as .net, and .org, and country code top level domains, such as .co.uk for United Kingdom and .de for Germany, are studied. When requests are submitted to the PRI, the system immediately surveys all TLD’s
(top level domains) to see determine if parallel registrations exist.
The DomainMarket.com PRI also includes a comparable engine, which allows the sales team to examine current and historical domain name sales data. The sales comparable reports provide key data including sales price, sales date and buy price. Sales data from sources such as
BuyDomains, Sedo, Go Daddy, Moniker and others are included as well as DomainMarket.com historical sales data. In addition, DomainMarket.com price quotes are stored to provide added guidance to the sales team when preparing price quotes.
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Domain Valuation Data Points
There is an art to properly valuing a domain name and only those with intuitive talent can be effective. Mike Mann is one of these individuals. Through a combination of subjective decisions and an examination of objective variables DomainMarket.com has replicated Mann’s model to enable valid domain valuations through a repeatable pricing model. Collection and examination of this data has been and will continue to be paramount to DomainMarket.com’s success in attaining its objectives.
DomainMarket.com’s domain valuations are based, in part, on an examination of domain-centric data points supplied by the PRI. The following describes a number of those data points and how they are factored into domain pricing by DomainMarket.com.

Identity of Price Requestor
Typical price requests records contain the requesting individual’s name, their company name, and their email address. In some cases potential buyers prefer anonymity and attempt to use anonymous email accounts during the negotiation process, however there are often other ways to expose the true sources of the requests. In those cases where the requestor is open with such information data such as the size of their company may be obtained and used to help determine the tolerance a prospective buyer may have for a specific price point.

Industry Size
An examination of the size of the industry to which a domain name relates (i.e. the domains category) is an important indicator of a domains value. Industry research is conducted and data points including the industries gross annual revenue are considered. Other data points of interest include the industries growth patterns, size of labor pool, average income for industry professionals, and gross annual global ad spend.

Prevalence Rating
Prevalence rating refers to the number of occurrences of the term (the domain) on the
Internet. This is examined via search engine statistics pertaining to domain names of interest.
When an Internet user conducts a search in a search engine they are provided with the number of occurrences that their search phrase appears in the search engines database.
Prevalence rating is an indicator of the volume of occurrences of a term on the Internet. As a general rule, a domain name with a higher search engine count, by comparison, is more valuable.

Derivations of Domain Name
The more derivations of a domain name that, the higher the value of the domain name. For example, SpeedyService.com is for sale. If we learn that SpeedyServiceInc.com and
SpeedyServiceLLC.com, and SpeedyService.net are registered, along with other relevant derivations, these occurrences are a clear indicator of the demand for the domain. In short, the more registered alternatives of any given name, the higher the value of the domain.

Sales Comparables
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A comparable domain is one whose rating is within a 5% range of the subject domain for each of the data points examined. Comparables are drawn from internal inventory and sales data as well as via readily available secondary domain market industry data.
When examining domain sales comparables the following data points, amongst others, are considered:

Traffic statistics

Revenue statistic

Historical data

Search engine zone statistics

Prevalence

Historical price quote(s)

Popularity of the Domain Search Term Amongst Advertisers
A metric for domain valuation is total annual Internet advertising spend for an industry and total annual industry advertising spend globally. Further examination of Pay Per Click (PPC) averages for the industry may be conducted. Domain names that relate to industries with relatively significant and growing annual advertising budgets and high PPC rates are more valuable.
Conclusion
The pricing of a commodity may be considered an intuitive task based on an understanding of the pulse of the market. Yet, there are objective data points that must be considered to provide a valid and sustainable pricing model.
The general immaturity of the domain market provides market disruptions that can be capitalized upon, yet also dictates a further reliance on astute data examination when valuing domain properties and negotiating with buyers and sellers.
DomanMarket.com’s proprietary systems have been developed to allow for the rapid and high volume review of the multitude of data points required to value, monetize, purchase and sell premium domain name assets.
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