Thoughts

Andrew Miller

February 9, 2025

The ROI on Your Perfect Domain

If there is one stake I can put in the ground in my 27th year investing in and advising on the most valuable category and brand defining .com domain names, is that they are arguably the strongest performing asset class. The ROI ranges from having a rock solid floor to a massive ceiling. For the companies that acquire their domain, the returns are measured in 8-10 figures. We will see that on full display today when Rocket*com (our transaction) is unveiled with a Super Bowl ad. The risk of not having your exact match domain is also measured in 8-10 figures! The start of 2025 for us at Hilco Digital Assets continues to back up my belief that we are entering a period of accelerating investment and M&A. This week was a big one for us, with over $10m in domain transactions. https://lnkd.in/e6V-QDgh

Timing is Key

There are many important aspects of successfully advising on big time domain transactions. It is essential to understand that just because one side may be ready, the other may not. Like in so many aspects of business and life, timing matters a ton. I regularly use the term “letting the deal marinate”. By putting an opportunity in front of a potential buyer/seller, and helping them understand it, they are situated to come back around when they are ready. The big question is, did they miss the boat or not? Sometimes it happens. This week, I had to inform the CEO of a company branded one of our domains that we closed a deal with a different entity. That is a tough call to get for those that understand the importance of owning their exact match .com domain, and is often a harsh wake up call when it’s least expected for those that do not understand. Waiting for the perfect time also has risks. When seeds are planted, sometimes they sprout right away, sometimes they take some time to grow, and sometimes they die. The problem is so many are too impatient and don’t take the time to plant the seeds. They’re just hoping for a quick win. Like anything, successfully doing the highest value domain deals is often a grind. Most who read this each Sunday know I am a serious Draftkings player. The term for those who are pros in DFS is grinders, because to make money at it, you have to grind all day every day to have the advantage over others.

Last Week at Hilco Digital

This week, along with the great successes, we had to turn down a $7.5M all cash offer on a domain we represent. While we represent the seller in this case, I saw it as a very good offer. The domain is a powerful category and brandable domain, and while there were price concessions, not enough to get the deal done, at least yet. The most valuable domains are 1 of 1 assets, the only .com for that term, and more valuable as digital real estate than actual real estate, because it is a brand and a destination, simultaneously.

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