Within the last year Quinstreet has spent over $100 Million Dollars in insurance domains (sites), with this purchase added to the acquisition of Insurance.com and Insure.com.
Yet despite having acquired the premiere Internet properties in the insurance space, Wall Street seems unimpressed.
Quinstreet which went public at $15 a share in February of this year is currently trading at $15.80 (hitting a low today of $15.53) less than 6% higher during a time when the overall market has moved substantially higher.
Back on February 8, 2010 when Quinstreet started trading the Dow Jones at 9,908. The Dow Jones currently sits at 11,401 which is a 15% increase.
Today the share of Quinstreet are down slightly on the news, so while all us in the domain community are thrilled at seeing this acquisition, the Street seems less thrilled.
So what are we missing?
@MHB
We’re not missing anything. Wall Street is. But seriously, to this day the dotCom bubble and burst of 2001 still warps a lot of the public’s perception of our industry. I still hear it from non-industry people all the time.
They don’t realize companies will pay 20.00 a click for auto insurance. Noboddy does. Though your quality must be decent. You will get around 10-12.00 on your side if all is quality traffic. Not sure why publishers settle for 5.00 a quote. Getting shafted.
Carinsurance.com has been selling policies for years. Just not in all the states.
I doubt this includes the book of business.
This makes insurance domain names about as hot as they come.
I think the majority of this stocks performance is directly correlated to the potential issues faced by its biggest customer Apollo Group and the ongoing investigations by the Department of Education around the for-profit education sector. The University of Phoenix (Apollo Group) generates more than 80% of its revenue form the Title 4 federal student aid program. The outcome of this investigation could have a material impact on both Apollo Group and Quinstreet’s future performance, but it seems this investigation could drag on for years without any resolve.
And I believe these pending for-profit-education issues have accelerated Quinstreet’s diversification strategy into other channels and this is why they have been so aggressive on the acquisition front.
How much did they buy Insurance.com for?
I would figure that and CarInsurance.com would be the two most valuable domains/websites in the world.
“They don’t realize companies will pay 20.00 a click for auto insurance. ”
That should be reflected by the earning so that point is not valid. Plus, it’s not $20 a click, it’s $20 a click minus expenses
Typically when a company acquires another the acquirer’s stock dips on the news. But I think the market wants to see the results from these acquisitions. Give it a year — if they’ve executed then the stock price will be up. If they haven’t, then it will be down.
since it’s sold with a site it’s not a domain sale record
Regarding Insurance.com $36.5 million
http://www.thedomains.com/2010/08/09/a-new-domain-name-record-insurance-com-36-5-million-dollars/
We can say “people are dumb” all we want, but I’d venture to say that the investors have far more information than we do as to what the stock should be valued at. Great domains will certainly help the business going forward, but it’s not a silver bullet that warrants a 20% jump in stock price.
200 000 visitors per month x 3% conversion = 6 000 policy sales per month
6 000 x $ 100 revenue per sale = $ 600 000 revenue per month
I would guess they when’t for 7 year revenue. While 50 M. isn’t exactly a steel, it is going to save them millions in not having to run on-line ads to the extent others have to.
excuse me , not revenue it’s profit
6 000 x $ 100 profit per sale = $ 600 000 profit per month
Duane,
Good thoughts, but I know that a new customer is worth much more than $100 to an insurance agency.
I’d say one new customer can generate thousands in revenue for the company.
6000 policy sales per month would be an incredibly valueable business, yes. 🙂
very interesting, they are certainly executing on their plan and going head to head with bankrate in the insurance and personal finance space, super smart team there…so the real question to pose is what vertical will be hot after insurance…any guesses what it may be once the economy recovers ? real estate, personal finance, travel
This company sells clicks to insurance companies. They are not into selling polices.
An insurance company such as geico, progressive or whoever will pay around 20 bucks to this company to get a click depending on the state. Now if your a publisher and have good traffic you can send it to them and make around 8 to 15 per click depending on quality.
So if they get 200k visitors and 20% click a company link. You have 40k visitors x 20.00 per click because they own the click . The publishers such as yourselves get a lower amount. 8 to 15. If you have crappy traffic you get 1 or 2 bucks.
To sum it up
40k visitors X 20 a click is 800k revenue a month. Or about 10 million a year.
They are paying about 5 x revenue i would guess.
Donny
Domain Owners are going to have to start “paying to be prominent”.
http://blog.icann.org/2010/10/icann-performance-you-can-measure/comment-page-1/#comment-24284
Payments will go to major DNS Platform Providers.
Wall St. likely understands the concept of “Market Reach”.
What domains will be available to Super Bowl viewers who enter Insurance ?
Jim
Ok I will bite
Explain what ICANN is doing here and how it going to effect domain holders?
Y’all, with Wall Street anything that cannot generate in to the hundreds of millions will not get any attention.$10M in revenue is a fart in the wind. If/when they scale it (Diapers.com) the street will perk up.
“Regarding Insurance.com $36.5 million”
so, what is now the real DOMAIN (not site) price record?
insure.com for $16M or…
insurance.com for $36.5M or…
carinsurance.com for $49.7M ???
so, what is now the REAL domain (not site) price record???
@MHB
Are you aware of the proposed 1,000 new TLDs at $185,000 per TLD (domain) ?
The $185,000 is just for the “vetting process” to the ICANN insiders and lawyers.
Root Server Operators are NOT under contract to ICANN.
One might view them as providing “Hosting” for TLDs.
Once some group has paid their $185,000 and has their infrastructure in place they have to be “advertised”. Their TLD has to be made known, with sub-domains of course.
In the olden days, a few lines of ASCII text in a file would advertise the TLDs. At one point Jon Postel suggested people give him (USC/ISI) $1,000 to make the entry. Chris Ambler with .WEB did that. Postel eventually returned the check.
Now, years later, the $1,000 is $185,000 but many things have changed.
A simple entry in a file, will not make a TLD widely visible.
Existing TLDs are now seeing that and apparently paying (donating) millions to make sure they stay in the Privately Operated Root Servers many use. Those
Root Servers do not have 100% Market Share.
Jim
Yes I am quit familiar with the new gTLD process and the $185,000 fee.
I still think there will be 500 or so applications just in the first round and$100 Million assuming no contested applications which of course there will be.
Still have no idea what this has to do with the post, but I think you will see mulitple applications for .insurance and a final amount paid for the extension several times the $185K application fee
@MHB
OK, fast forward, someone pays $185,000 + Auction $$$$$$$$ for .INSURANCE
Now, .INSURANCE will have to Pay to be advertised by all of the numerous DNS Platforms (including ICANN Root Server Operators…who are apparently NOW taking “donations”)
Going back pre-New-TLDs, .COM and .CO and other prominent SUB-domains are also going to have to start paying as DNS Platforms mature. ICANN is not part of that contracting arrangement.
As an example: Let’s say there is some guy named Frank in the Cayman Islands with 1,000 domains. Do you think [DNS Platforms] are going to resolve those for FREE ?
[DNS Platforms] – Cable TV Like Set-Top-Box DNS
.insurance will be added to the root once approved.
“.insurance will be added to the root once approved.”
===
and will be made available to consumers when the [Distribution Channel] is paid.
It is shocking how little domainers know about the DNS and changes coming.
i dont know about quinstreet…but did you guys buy mchx at $4 in september…its almost at $7 today…almost double your money within 2 months…not bad!
Has anyone even bothered to look at their 10-k?
I’m literally seconds away from sleep and just gave it a five-minute flyby, but they seem to have debt issues as it stands and are mining the hell out of their revolving facility.
Buying a category killing domain name might be thrilling to domainers, but a huge yawn to the Street, which only cares about the operating rudiments of the business itself.
Seriously. Go read their 10-k. It’s interesting.
http://investor.quinstreet.com/secfiling.cfm?filingID=950123-10-85682
So much 4 seo arguments about exact match domains, says what it does on the tin + the com brand. Linguistics are older than the net. The domain + quality content, perfect.
Aron, absolutely worth much more than $100
My example is worse case scenario pure sales net profit. Now where is the real money?
When you have the data about your customers like car type, model, age and all the other goodies? This get’s business really rolling.
Car Typ – Van = After sales for family deals, parks, family restaurant coupons, College saving plans etc.
Car Model – Sportscar = After sales for tuning parts, high priced Watches and all other luxury accessories.
Car Age – New, Old, Very Old = After sale wheel deals, tune ups, new car finance deals.
Geo – North, South – After sale winter tires, snow chains, antifreeze etc.
This business and the quality of data you get out of it makes a world of marketing opportunities.
PS: Congrats on Tablets.
That is a whole bunch of zeros. The prices on My Geo Insurance names are going up.
After 24 years of working on Wall Street & 5 years in Domains/URLs…
Wall Street and its investors still view Intellectual Properties as Vaporware…in their eyes domains are still too intangible to have a due diligence value or intrinsic value assessed on them
Look at Marchex’s Value back in 2008 it had a high of $13.22…with the market recovered Marchex is trading at $6.74…after going to a low of $4.52
still many years before mainstreet gets it, even though some big firms do
this is a shining example how most companies arent interested in vacant lots, however good the domain, they want a built out property/business to acquire
there are still some years to mine at the face shoulder to shoulder with domainers, without every john doe and joe bloggs snapping at our heels. look at it that way!
Two things to note:
1) As of yesterday it was trading at it’s 52 week high.
2) With multi-million dollar website acquisitions, I think investors want to see more than just a quality domain name purchased, they want to see rev with high profit margins based on strong SEO.