QuinStreet announces purchase price of $35.6 million for Insurance.com in earnings call

A couple of weeks ago, Andrew Allemann reported that QuinStreet was the buyer of Insurance.com, although the price was not revealed at the time of the news release.  In today’s Second Quarter earnings call with analysts and investors, the company reported that it paid $35,600,000 for Insurance.com. Although this includes the content, I believe the domain name was the primary asset that was acquired, and the content is good for search engine rankings.

A replay of today’s conference call will be available at 8pm EST until August 16, 2010. You can access the recording by calling (800) 406-7325 in the US and Canada, or by calling 1-303-590-3030 elsewhere in the world.  Use passcode 4328774 to access the call. In October of 2009, QuinStreet paid $16 million for Insure.com.

When I worked in one of the direct marketing groups at AIG, our group had millions of dollars to invest, and I recommended that we look into Insurance.com.  My thought was we could offer the insurance products we had access to (accident and health insurance products) while “selling” the other leads to other divisions for products we didn’t have (such as auto insurance).

Ultimately, an investment was made in other infrastructure and the Insurance.com acquisition was never really explored. My group was small-ish for AIG (9 figures in annual revenue), and it hadn’t really used the Internet for sales when I was there, so it would have been a considerable risk.

Insure.com, a publicly traded company whose shares trade on the NASDAQ stock exchange, sold its corporate name and related domain name for $16,000,000, and the company will be renamed Life Quotes. The company paid $1,600,000 for Insure.com in 2001.

The domain name was purchased by Quin Street, who as you may recall, paid $18,000,000 for Internet.com and related assets back in August. According to AboutUs.org, QuinStreet is an online performance marketing company helps businesses target their would-be customer audiences by using its proprietary technologies and media reach to generate sales leads.

I believe that this is the highest recorded price for a domain sale, beating Sex.com, which sold for a reported $12 million in 2006.

It’s going to be very interesting to see how the company now previously known as Insure.com will manage with the name change and loss of links. They may have a unique product (I do not know), but it will be difficult for them to re-climb in the search engine rankings after the name change. Not only do they lose their type-in traffic and inbound links, but they also lose the credibility that comes with saying, “hi, I’m from Insure.com.”

$16 million sure is a nice sum of money, and it’s a great ROI no doubt, but one has to wonder what they long term impact for the company will be.  The company believes a name change “is expected to reduce revenues 10 percent to 15 percent for the next two to six quarters,” however, I think it will take a whole lot of marketing dollars to purchase the traffic that will be lost when Quin Street takes over the domain name.

Fortunately for us people on the sideline, we will be able to see how this plays out for the Life Quotes, since they are a publicly traded company and will have to report its revenues.

***Update***
Some people are questioning whether it’s accurate to say it’s the highest recorded domain sale. I believe so because Life Quote is retaining so much of its actual business. From the press release: “The Company will retain all of its remaining balance sheet assets, national brokerage contracts with 25 leading life insurance companies, 50 fully licensed insurance agents, call center operations, customer and prospect lists, and nearly all of its current inbound affiliate and traffic partnerships.”

Also, was the sale of Toys.com not simply a domain sale? It had a website previously, and it also had lots of inbound links as well. IMO, since the publicly traded company is basically keeping all of its assets, it’s a domain sale with good will.