Thoughts

Andrew Miller

February 4, 2024

The Unstoppable Power of Ultra-Premium .com Domains in a Sluggish Market

Following up on yesterday’s post. Amid a sluggish investment climate, the most valuable .com domain names as an asset class have never been stronger; as standalone investments; must have, strategically game changing assets for the companies that acquire them, positively impacting all facets of a business and exponentially adding to enterprise value in a way no other investment can. In the past 10 days, we at Hilco Digital Assets are overseeing $25.6 million dollars in exact match and category defining domain name transactions and $38.1m since December 15th. I have recently and often written about the down cycle we are in economically and in venture capital investing, but through that, the most ultra premium .com domains have continued to outperform. What has been the biggest challenge for as long as I have been an expert on domain names, is helping the company that we all know needs to acquire its exact match or category defining .com domain, to understand how significant an impact it will have on their business. There are 3 types of companies; those whose management unequivocally gets this, leading to finding a ZOPA (zone of possible agreement) on a win-win price; those who get it but do not know how to deploy the asset once they have it; and those who are making a dangerous strategic mis-step, by believing they can get away without it, by using a secondary TLD or a longer domain for their brand, email, advertising, and address to the world. As we continue to share case studies from Founders/CEO’s who are now more than ever stating that their domain acquisition was the most important investment and hockey stick moment for their businesses, more and more deals are getting done. The past couple of months for us as stated above is evidence of that, and we are in advancing negotiations on several more deals that will happen soon.

A Valuable Lesson: Ensuring Smooth Domain Transactions

Important lesson learned this week. In one of our transactions, there was a hiccup that I had not seen before but will learn from. The acquired domain was locked at Cloudflare, not from the current seller ,but the seller who sold to them years before, an enterprise account of Cloudflare. Yet, having Cloudflare access was a condition of closing and a must-have for the buyer of the domain. We got lucky because the attorney at this company was so responsive and got their IT department to unlock it. I will be adding a provision to all future P&S agreements that includes unlocking access to any accounts that may be necessary for the buyer to conduct business.

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