While doing some ETF research, I accidentally stumbled upon the domain ETF.com. The ugly site is just a collection of auto-post RSS feeds and out of date search engine-friendly articles – it’s unedited and obviously not maintained by anyone who cares about it for more than some passive AdSense income. So for the heck of it I dropped a line to the contact person, asking if the domain name is for sale (we hear this exchange traded fund thing is getting big).
I was surprised to receive in return a slick .pdf sales brochure from Broadmoor Associates, which performs digital brokerage services including selling premium domain names (NaturalGas.com is also on the block there). After a pitch on the growth of the ETF market and existing traffic to this domain name – fully 41% of it comes from people directly typing it into their browser’s URL bar – we get the asking price:
ETF.com is offered at US$9.5 million.
The domain name’s pricing is positioned between the sales price of FB.com, acquired by Facebook in 2011 for approximately US$8.5 million and Fund.com, acquired by Fund.com, Inc. in 2008 for approximately US$10 million.
Now, premium domain names, like super high end homes, are notoriously hard to value, but I find the pricing logic here to be interesting – both in terms of the comparisons and the domain letter lengths.
Fund.com seems like a reasonable market comparable to ETF.com. It was bought by a company that seems primarily to be doing lead gen for mutual funds, which is clearly one possible business model for the new ETF.com owner. But what is FB.com doing here? It’s another short URL that recently sold for a whole lot, but that clearly had more to do with Facebook’s deep pockets than any particular market force that we can use as a comparable for valuing a short URL in another field entirely. There was no significant traffic or external market for FB.com – Zuckerberg and crew just had to have it for some reason (messaging? link shortening?). Why should it serve as a bookend around the proposed ETF.com price?
Also, all things being equal, shorter domain names are generally more valuable, but in this case we have FB.com going for less than the asking price for ETF.com, and Fund.com going for more than the other two. Does Broadmoor think Fund.com is more valuable because of the size of the mutual fund market (still much larger than the ETF business)? Or because the phrase is a more common word, while ETF is just a particular type of financial product?
In any case, if you have a spare $9.5 mil hanging around, this could be your chance to become the go-to site for exchange traded funds. Maybe iShares will finance it.
* UPDATE: Felix Salmon has some additional thoughts.
