Domain Name Business

First Business.com has been sold for $360 million and now ClubPenguin sold for $700 Million. The buyer is Disney Co.

From Canada.com

Club Penguin, a Kelowna-based children’s virtual world website with more than 12 million activated users, has been bought by Walt Disney Co. in a deal worth $700 million US.

According to terms of the deal, $350 million US will be paid in cash, but the website’s founders - Kelowna tech entrepreneurs Lane Merrifield, Lance Priebe and Dave Krysko - can make up to $350 million US more depending on the site’s earnings in 2008 and 2009.

The website, which retains its URL, clubpenguin.com, will now be called Disney’s Club Penguin and remain in Kelowna, where its 130 workers are based.

From NYtimes:

Disney said it would pay $350 million for Club Penguin, a virtual community… More than 700,000 users now pay $5.95 a month to customize penguin characters and then chat and play games with other “penguins.”

“Kids are starting to go to the Internet first, so it is important for us to operate in that space,” Robert A. Iger, Disney’s chief executive, said in an interview.

We covered this story as it went up for sale earlier this year. The Wall Street Journal is reporting that the sale just happened. The final purchaser is R.H. Donnelley who bought Business.com to increase their influence of the Internet in the yellow-pages and white-pages business, which publishes paper and online directories in 28 states under the AT&T, Dex and Embarq names, among others.The Dow Jones and the New York Times were both bidding on the company. The sale was expected to close between $300 to $400 million. So the price was right on target. Business.com currently brings in about $15 Million dollars a year in revenue. So the sale was 24 times earnings. This is a rather high price for a company but generally bigger companies sell for a higher multiple. 24X is very healthy. If a company is able to demonstrate $1 Million dollars in revenue that would make it worth about $24 Million according to these numbers. However, smaller companies sell for a smaller multiple. Generally between 8X to 15X. Now you can see why 24X looks so good for this company. One could argue it was the domain name that made it so valuable.

The parent company has revenues of $442 million and has a market capitalization of $9.67 Billion. R.H. Donnelley’s stock currently trades at nearly 22X their current revenue. This purchase is right in line with the value of their stock so it is a good purchase from my perspective.

Main Source: Domain Tools 

ADAM GOLDMAN AP Business Writer

NEW YORK — Inside a midtown hotel, Larry Fischer is on his cell phone with a financial backer as his partner Ari Goldberger does quick research on a laptop computer.

They are bidding furiously at this auction of Internet domain names, with hopes of snagging megayachts.com. The duo won’t be deterred. They want this name.

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By Bob Martin
CEO, Internet REIT

The early days of the domain industry have often been compared to the “Wild West” – a vast, virgin landscape populated by early domainers, typo-squatters, and forward-thinking advertisers. Many in the industry can remember looking with awe (and perhaps a little skepticism) at multi-million dollar domain sales, experiencing the excitement of implementing early monetization strategies and feeling pride at being on the vanguard of an accelerating market.
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By Antonio Marzo
Director of Spanish and Latin American Markets, Sedo.com
This past year, Sedo has seen the importance of the Spanish language in the domain world simply skyrocket. With 420 million Spanish-speakers worldwide, only a measly 80 million of these are online, making just 18% of Spanish-speakers on the web. In comparison to other language groups, Spanish is in third place following English and Chinese.

Currently, one in ten Internet users are Spanish-speaking, however this figure is increasing by leaps and bounds. The number of Spanish-speaking Internet users has grown 231.1% in the last six years (2000-2006). This growth rate surpasses that of English-speaking Internet users at 135.2% over the same time period. Naturally, this astounding increase also means massive growth of Spanish domain traffic. For example, trabajo.com (work.com) received 18,000 visits in October 2004, while the same domain received 27,000 visitors just last month.
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