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Pure Domain Sale vs. Sale Of A Business/Website

Marketing performance specialist, QuinStreet has recently purchased Insure.com for a whopping $16 million.  This sale has sparked a debate over at Elliot’s Blog on whether or not it was purely a domain sale or if QuinStreet acquired more than just the domain, which would explain the $16 million price tag.


From the outset it looks like a pure domain sale.  However, the Chicago Tribune reported differently.  Clearly there are facts missing from somewhere.  QuinStreet made the purchase from the insurance company that will now be re-branded Life QuotesLife Quotes maintains that they will continue operating business.  So, why the debate?  I think a quote from Adam’s comment on Elliot’s blog post sums it up well:

“…Pure domain name sales are going to be more and more hard to figure out as domains mature and more of the premium domains are put to use. If buyers can grab up other assets in the deal and/or when sellers can get stock options and other intangibles, we’ll see less of these sales appearing on the highest sales “charts”…”

My only question is, why would an insurance company sell off Insure.com to a marketing firm?  Life Quotes acknowledged that they will lose substantial amount of leads by selling the premium domain.  I think it was a terrible decision unless they were looking to ‘cash in’ per se.  By changing their business name to Life Quotes, they will confuse thousands of clients with the LifeQuote.com insurance website, a completely different business on nearly the same (and better) domain.  Another note, QuinStreet is the same group that recently purchased the Internet.com network for $18 million.

About the author

Mike

8 Comments

  • Definetly a business sale,

    You dont pay $16m for a domain thats not a business,
    with that much targetted traffic, links/seo etc etc… it’s not a domain.

    It’s a business without a home.

    All those saying this domain sold for $16m need to go and find the definition of what a “domain” is.

    100% business sale no matter what you say.the rest is all BS.

    Anything for a bit of press these .commers 🙂

  • Also, you dont pay $18mil for a better domain/network (that was a business) then go and pay $16 mil for just a domain.

    Madness calling it purely a domain sale.

  • New.us – According to the press release, “The Company will retain all of its remaining balance sheet assets, national brokerage contracts with 25 leading life insurance companies, 50 fully licensed insurance agents, call center operations, customer and prospect lists, and nearly all of its current inbound affiliate and traffic partnerships.”

    THIS is the actual business.

    They are selling the business name and branding, which is Insure.com. This may not be a “pure” domain sale, but it certainly isn’t the sale of the business. The company is keeping virtually everything but the domain name.

  • In my opinion it is also wrong to call it “domain sale”. And what about all those leads, backlinks, brand awareness, customers used to the address etc.? These are things that give additional value to insure.com domain name. If it was pure domain it had been sold much cheaper in my opinions – maybe for a few million dollars.

  • “New.us – According to the press release, “The Company will retain all of its remaining balance sheet assets, national brokerage contracts with 25 leading life insurance companies, 50 fully licensed insurance agents, call center operations, customer and prospect lists, and nearly all of its current inbound affiliate and traffic partnerships.”

    THIS is the actual business.

    They are selling the business name and branding, which is Insure.com. This may not be a “pure” domain sale, but it certainly isn’t the sale of the business. The company is keeping virtually everything but the domain name.”

    Elliot,

    When it comes to insurance leads the business name, website, and the branding are the business. The agents, contracts, inbound affiliates and traffic partnerships can all be built up in a matter of days when you own Insure.com and the branding.

    If someone previously branded the company, built links, and marketed it, and you are purchasing the branding as well as the domain then you are buying a business, not a domain.

    I don’t get the impression that you are saying it was strictly a domain sale, but I think that it is much more of a business sale then anything.

    Again, this is an example of the need for domainers to stop being collectors and start being business men and women. There is more to a successful business then a domain as shown by Pets.com, Mint.com and now Insure.com. The business behind the domain will always have the most value, it is just that a good domain helps build that business quicker.

    Some people trash domains, saying all you need is a business, some trash the business plan and think all you need is a cat. killer domain, the truth, as is commonly the case, is found in the middle.

    Troy
    FreeDomainNewletter.com

    Mike, the letter is going out soon=) Sorry for the delay.

  • Like you said, the name is that businesses brand, all they have now is contacts, no traffic = no business for the new company.

    the buyers of insure.com have there business tied up in the domain name.

    It’s like you selling your house, but keeping the furniture, youre selling the meat, keeping the sweets. The furnitures no good to you if you aint got a house to put it in.

    How many of there current clients are going to stray back to insure.com out of habit ?, 90% ?.

    It’s a business sale guranteed.
    The only reason this happened is because they wish to keep as many clients as they can. And make the most out of a “bad” situation (selling there main domain is the “bad” part) In a way.

  • This constant argument we’re seeing more often as domains are selling for big dollars is a waste of time.

    Who the hell cares whether it’s a domain sale or a domain and business sale or a business sale with a domain.

    For goodness sake’s folks, some lucky chap just put $16 Million in the bank and that’s all that matters. I’m sure he really doesn’t give a hoot how it’s labeled.

  • I think this deal is further evidence of something that I think should be starting to become obvious to domainers:

    1. Most corporate buyers will have a difficult time justifying a 7 or 8 figure purchase for an undeveloped domain name. However, if it is an “operating business”, it may have a high multiple, but it has a larger base of assets than just a raw domain name.

    2. Development of a domain name increases its visibility to potential buyers of the domain name. Development of a category defining domain name has even more potential because the RECALL rate from having ever seen that domain on the web is 5X higher than an obscure name in the same category.

    The challenge is how to develop a large number of names without consuming massive amounts of capital to get the BUSINESSES to the point that they are cashflowing. And to THAT requires a platform approach as it increases the probability that ONE of your developed names attracts a retail buyer.

    While there is no single formula for development, it is increasingly clear that retail buyers of domains appreciate a “running start” in the form of traffic, SEO footprint, branding and trademark protection in the vertical in which the domain is most suited.

    Anyway, a great outcome.

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