Thoughts

Andrew Miller

April 23, 2023

The Secret Sauce of Domain Name Negotiation

Michael Cyger created a great program to help new investors learn about all aspects of domain names as assets. What DNA does not teach, and precious few understand, is the psyche of an end-user company, the decision-makers, and the art of successfully navigating that to buy or sell a domain name from/to/with them. It is somewhat of a secret sauce and is the key to a successful deal, whichever side you are on. This is the biggest X factor that Hilco Digital Assets and I bring to the table for you.

Understanding the Challenges and Nuances of Domain Investments

Domain names can be challenging. They tend to be less liquid than many investments or assets. Domain name owners always think their domain is going to attract higher offers than it likely will. As I have posted on other occasions, the key to a successful domain investment and transaction is a win-win, and that occurs when the seller and buyer can find a ZOPA (zone of possible agreement). There are circumstances where a domain will transact at a “wow price” relative to prior historical deals. I have been involved with several of these, both as an investor and advisor (recently, Home.com/Chat.com). But, just because you believe your domain is worth $X doesn’t mean you will sell it for that in your lifetime. Most domain owners do not want to pass the domain down to their heirs. There are very few other asset classes besides domains where you can make 5-100x or more ROI.

Domains are different beasts. It takes a “perfect storm” situation to sell a domain at what is the top end of the historical range. Domain names, like your home, do have a “range,” even if it is less established. For the ultra-premium domains we invest in and advise on, that tends to be in the $750k-$3.5m sweet spot. Yes, we have done multiple eight-figure deals, but I urge those we advise not to use outliers as the standard. Ironically, most of the mega deals we have done started out with a ZOPA. No one practices aiming higher than we do, but I also want to see investors and companies leverage exact match, category domains more often, which is great for everyone.

Exciting Collaboration at NamesCon: The Greatest Stories Never Told

I am speaking at NamesCon with Larry Fischer right before Jimmy Wales, Founder of Wikipedia. “The Greatest Stories Never Told,” will elaborate on our Chat.com and Home.com deals. I am very excited to say that joining us (likely by Zoom) is my dear friend David Lazowski who is a core part of the decision-making team at Fairway, that acquired Home.com. It will be amazing to hear from an end-user on one of the most strategic and iconic domain names of all time.

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