Hecta Media Acquires Large Domain Portfolio
Domain Industry News March 13th, 2008
Congratulations to Clark Landry and his team at Hecta Media on their recent portfolio acquisition. According to a news release on Forbes this morning, publicly traded Hecta Media (AIM Exchange) purchased a portfolio consisting of approximately 60,000 domain names for $1,450,000. They also retain the option to purchase two additional portfolios for $1,900,000. According to the release, the company expects revenues of $750,000 annually, which is important because the renewal fees will be over $400,000 per year (assuming they are all .com names). Based on my back of the napkin calculations, this is just over a 4 year revenue multiple.
I had the chance to meet with Clark Landry, CEO of Hecta Media, several months ago in New York, and he is a dynamic person, with an entrepreneurial spirit. When we were initially speaking, I had thought most large portfolios for sale with good names were significantly more expensive than what Hecta was able to pay for it. My advice to Clark would be to get pare down the portfolio of non-producing, poor names to save on the renewal fees. Sometimes you have but a bucket of rocks to find some gems.
March 13th, 2008 at 6:15 pm
Interesting numbers in this “domain industry day and age” to say the least … only $12/yr/domain income … and $24/domain sales price.
March 13th, 2008 at 7:13 pm
agree Steve…wouldn’t be my first strategy
March 13th, 2008 at 7:31 pm
The more interesting part of the release to me with acquisition of a dotORG for almost half million dollars. That has to set a record: http://www.tutorialblog.org/
March 13th, 2008 at 7:35 pm
From my calculations, including their expected revenue and renewal costs, they paid a bit over 4 years’ revenue multiple, which isn’t bad - assuming the names aren’t sensitive.
March 13th, 2008 at 7:47 pm
also because they are London-based they can probably turn a heathy profit based on the currency exchange alone
March 13th, 2008 at 8:10 pm
I’m always baffled as to why companies such as Hecta (and Marchex) acquire these portfolios consisting of thousands of rowboats instead of a dozen battleships.
March 13th, 2008 at 9:54 pm
David, please expound on your insight.
Michael, your insight also.
Maybe Hecta can jusify the 1.45M purchase
to it’s owners when it Owns 60,000 rowboats,
of which there’s bound to be a few that really float well.
If they paid 1.45M for a battleship ” Manicure.com “
the owners (how many there are I do not know) might
fire the ships cannons based on just ONE mega yacht(name).
What think ye also Elliot?
Teach me hear guys…Ed - Michigan
***UPDATED BY ELLIOT***
I emailed Clark to find out what some of the names are, but haven’t heard back. Without knowing this, I can’t say for sure. I know they’ve been looking to acquire a portfolio of names that receives traffic/revenue for a while, so I am sure they did their homework.
However, like I told a friend last night who was contemplating buying 8 decent/good names for 6 figures, I would rather see him buy 1 great name for that price than several decent/good names. Having one great name is much more manageable than a bunch of good names.
March 14th, 2008 at 12:11 am
I think sifting through names to get to the bottom, is very important. I am planning to comb trough my names to cut out at least half next year. Eliot is as usual on the money, i probably wouldn’t have picked up some Battles ships (in my opinion) if it wasn’t for hundreds of raw boats.
March 14th, 2008 at 4:47 am
Hi Ed:
One great developed name can outgross 50,000 parked names. Since 1995, my brother and I have experienced this time and time again. For example, the front page of our PalmSprings.com generates almost $1,000,000 a year in advertising revenue. We also see similar revenue from our Daycare.com. These are huge Geodomain and Mega-Generic domain names and would be expensive to purchase on the open market, but Hecta and Marchex could afford them. I don’t see why they don’t target mega names like these that have such super revenue potential instead of buying portfolios consisting of thousands of smaller parked names.
March 14th, 2008 at 6:00 am
Hectamedia purchases developed names with revenue and not parked revenue making names.
March 14th, 2008 at 11:25 am
Charley:
If Hecta only purchases developed names, I’m curious to see what kind of developed names with content they acquired for an average of $24 a pop.
March 14th, 2008 at 12:19 pm
someone please give Hecta my email :)I’ll buy the drinks
March 14th, 2008 at 8:10 pm
David, thank you for the insight.
Elliot, thank you for the response.
Steve, thank you.
Tim, thank you.
Owen, good to hear from you again.
Charley, thank you.
You ALL teach me.
I thot I loved REAL ESTATE.
But this business gets in your blood !!
Heck, if not careful this business IS your blood.
Ed - Michigan
March 15th, 2008 at 4:10 am
David,
I am finding the info via email. He is busy with the transaction and will let me know soon.
March 17th, 2008 at 8:55 pm
Looking forward to it.
March 20th, 2008 at 4:33 am
Best guess is there’s a big lot of typos involved, thus the reason for not publishing.
David, I think the “all your eggs in one basket” is one reason people buy “bunches of rowboats rather than a battleship”.