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ESS Data Recovery, Inc. yesterday announced the purchase of the generic domain DataRecovery.com. ESS Data Recovery paid $1.7 million for the domain name, which makes this the highest reported domain sale of the year. The company will forward it to its existing, established website. It said it had bought the domain to set itself apart from the growing number of new data recovery companies and to attract more customers through the domain’s direct navigation traffic and generic nature:
“Our existing customers know that we’re a leader in the extremely competitive data recovery industry because we provide a better service than our competition. It’s fitting to have a domain name that reflects that,” said Ben Carmitchel, the company’s president. “Our existing clients and new clients alike will benefit from easily finding our website when checking on the status of their case, researching information about data recovery, or referring us to a friend.”
It is good to see more companies understand the value of a generic domain name, and the fact that they submit press releases to promote their domain purchases will further add to the growth of the high-end domain market. This is a testbook example of efficient use of a generic domain to support an existing business.
In the coming years, I foresee owners of generic names doing great by either developing their domains into something of value or by selling them to the companies who will pay a premium for them (like ESS for DataRecovery.com and Barnes & Noble for books.com). Big money will be made.
On the other hand, owners who buy/keep domains that do nothing but serve ads on parking pages up will be the loosers. Why? Two reasons: 1. the public will tire of those sites and stop clicking on the ads, and 2. advertisers will not want to pay for those clicks and eventually google and yahoo will discontinue serving up ads to bland parking pages.
Why do you think Rick Latona is selling off his stuff? Because he is smart enough to know his PPC income for useless sites is going to disappear and he can’t possibly develop all his sites. You will see owners doing the same thing.
If you are a domain owner of parked pages or if you are a parking company, you better start looking for a new way go make money.
RF
Robert, that’s a very good comment. I agree with you that it will become increasingly difficult to monetize domains by simply parking them. Especially owners of generic domain names should develop their domains and use the existing type-in traffic to jumpstart the developed sites and services. Domain parking has changed a lot last year and it will continue to do so. I even believe that we will see more dropping domains, because less parking revenue will also result in lower profits after a portfolio’s annual renewal fees have been paid.
Rick Latona is selling off many domain names, but he is a buyer, too. I would say he is, like many other domain portfolio owners, trying to further improve the quality of his portfolio rather than increase the sheer quantity of domains he owns.
After all, holders of quality domains *will* benefit from higher sales prices and more end user sales. But it remains to be seen how owners of large portfolios will do in terms of pay-per-click revenue. I believe they will have to let more low-quality domains drop and sell other domains along the way below market value, all along keeping the high-quality stuff until they receive an offer they consider high enough for selling.
I agree with you both, but i think the industry is going in this direction anyway. We are going to see more and better developing solutions for domainers.
I think that the biggest problem of parked pages is the luck of return customers. You can’t build an online business without them. It is a bad business model.
At the same time, Direct Navigation is growing very fast and good domains value will just increase.
I don’t know why Rick Latona is selling off some of his domains, but I don’t think he is selling them for cheap. I think he gets fair prices, so it makes sense that he is trying to improve the quality of his portfolio.
If parking $ falls as people are predicting, it will be a huge benefit to people who have the capabilities (technical, financial, vision) to create quality sites.
Just a follow up -since buying the domain and adopting it on all of our marketing materials, we are seeing an overall sales increase of approximately 41% above last year. Tracking the conversion rate (datarecovery.com visitors to sales) has been very difficult. I believe the “type-in” traffic kind of meshes in with our other clientelle. The ease-of-use by consumers and marketability of the domain were underestimated by us & this has provided definite and immediate results. Anyone else considering the purchase of a generic domain should be careful not to underestimate marketability. At this stage I believe $1.7M was a steal. I’d doubt I’d sell it for $3M knowing what I know now.