Mike Mann posted on his Facebook wall today that he is planning on buying another 100,000 domain names a year;
“I am buying 100,000 .com domains per year one at a time for less than they are worth.”
“Same as at BuyDomains.com but now DomainMarket.com, about 300K and counting so far.”
“Pay the Mann.”
100K new domains a year is a lofty goal.
At 300,000 domain names Mann’s DomainMarket.com is already carrying an annual renewal fee of at least $2.4 Million at the prices which will go into effect on January 15th, 2012 (wholesale Verisign price of $7.85 + ICANN fee of $.18).
For every 100,000 more domains Mike buys, it will add will add another 800K in annual carrying costs.
Of course under Verisign’s contract with ICANN, it can continue to increase prices 7% in every 4 out of every 6 years, meaning additional price increases will be forthcoming on an endless basis.
Crazy numbers! Mike does not own just a portfolio, he owns a whole empire.
I was looking at one of the recent domains I dropped due to lack of EXACT match search frequency on GKAT, portableterminals.com, only to find out Mike Mann picked it up. Not sure if he did it via GD auctions or the registry.
Maybe I have to readjust the criteria I let names drop but 100K/yr is 270/day. That’s a lot of junk mixed in.
Doesn’t Verisign’s price increase end in 2012? Michael, maybe a piece on if it (the part of the contract that allows Verisign to increase .com prices) will be renewed or not, would be interesting to your readers.
Paul
Verisign’s contract expires in 2012 but it has a presumptive renewal clause in it just as the .net contract which expired this year but was renewed.
So unless Verisign screws up, meaning in the operation of the registry, the contract will be renewed for another 6 years with Verisign having the ability to increase prices 7% in any 4 of the next 6 years.
See the story I cited in my post to show you what the cost will be over the next two contracts
Buying 100,000 per year ‘one at a time’ for less than they’re worth – can’t be done. I’m amazed by that statement considering who it’s from.
What if you have your own registrar can you get a lower price than the wholesale Verisign price of $7.85 + ICANN fee of $.18?
Its true, in the begining of the year whois showed that he had about 160k domains, now around 300k ,that’s 140,000 this year.He has to sell domains at $200,000 a month.
I follow him and huge domains and this guys are unbelievable.
Huge Domains had 220,000 domains in the beginning ,now he has 380,000,that 160k domains this year.
If their domains where as good as Marchex i would understand,but the dilemma is how can they survive with such mediocre domains and on top of that buy more?
If I take into account number of domains MM has his sale rate is not so impressive ..
I would like to see his rate if he had 300 domains, average domainer budget, no privileges on the internet which he is using all the time and not giving chance to other people (buying before others -.co`s , first .co sedo auction where most submitted domains belonged to him and so on and so…)
Yes, I agree with you. They own premium domains but, out of 300,000+ domains, more than 95% are reg fee names.
I don’t believe it – where’s the proof?
Patel@
Come to America and i would like to see your excuse then…
Mike did start just like you and me from 300 domains
Whatever!!!
He can buy all he wants but all the sites to be developed are pure pigeon “BUllS”
Dean
Actually no that is the wholesale price that the registrars have to pay Verisign and ICANN.
So if they are charging you $9 they are paying or will be paying after Jan 15th $8.02 per domain and they make .92 in which they have to pay their bills, employees, CC processing fees etc.
Verisign does from time to time offer registrars a discount program for new registrations but that requires them hitting increased registration levels and other factors, but I’m not aware of one for 2012.
I still don’t see how he monetizes them? Parking is useless.. ‘developing’ the sites is a costly proposition – what with smart pricing kicking into effect from adsense if you are too successful, etc. this is a difficult model to manage – especially since most of the domains have no traffic and/or history. You can’t just autoblog these – it doesn’t work.
I’ve tried autoblogging with PR2-4 domains – all same domain/previous-site related. they might get indexed, but traffic and quality is poor.
I think that it’s fantastic that MM is making this unprecedented commitment – and taking on this level of risk. He should definitely be commended for having such guts, and for being a major factor in supporting prices.
But I’d love to see a (%) breakdown of they categories of names that he’s buying, e.g., keyword, future trend, etc. It’d be no surprise to learn that he does – on a much larger scale – what plenty of us do as well, i.e., corner the market on particular niches.
If anybody can pull it off, Mike Mann can.
@All
Be sure to remember, Mike Mann does not necessarily have to renew domains just from domain sales alone. He is, I think , correct me if I’m wrong, still gets a little bit of somthing from his relationship to BuyDomains AND keep in mind he has other ventures we know of and some we do not know of, bringing in additional income.
He has a business structure in place, with multiple income streams, to support that massive domain buying stream. Continuous success? Most likely. All we can do is watch and see what happens lol.
Mike Mann, this post is for you:
penetrability.com
movieextreme.com
disorderliness.com
esterify.com
advertisingcontacts.com
collegevocational.com
All just dropped today and available for registration.
I have studied this side of the business very carefully we all know what Andrew Reyberry does, he gets pounded with UDRP’s, but these guys basically have to keep selling their prime domains, to be able to afford paying renewals.
Sure Mike Mann has enough good domains, but its only a matter of time with 7% price increases etc… you are basically selling the cream of the crop to support the bottom tier, PPC used to help, but it now truly sucks, basically you are playing casino odds, to many players all trying to catch the same drops, hoping some end user will come pay thousands for a reg fee name, sure it does happen, but when you have a $3M a year carrying costs, lots of $100-200k deals have to be done to make up for it.
Mike Mann did have an edge on the .co registry that is for sure, and he made some nice cash off it.
Not quite sure why domains cost $8 to register, just seems like a silly amount considering there is not much work that goes into it anymore, 7% is 2.5 times inflation, mob mentality…
Let’s not forget that Mike Mann operates many other companies like Seo.com and Phone.com
handregged? 🙂
MHB,
thanks for answering my question. I presume that the wholesale price you are quoting is for the .com extension and fluctuates depending on the extension? As you pointed out, the .com profit margin is very slim once you take into account administrative costs, etc,. Still, if you multiply the slim profit margin X the millions of domains someone like Godaddy has it’s probably a tidy little sum.
Dean
Yes this is for .com
Of course many registrars make a lot of money on added services like hosting, privacy etc etc which is why many registrars take you through a shopping cart of extra’s
For a business generating ample revenue, $2.4 million for renewals is expendable. Mike Mann is not buying domains at reg fee, he’s buying domains that have a good ROI spread potential. That’s the difference between smart domain investing and jumping into the waters like a lemming.
I wonder if he is buying all English domains or if he is moving into the International IDN.com market???
@MHB
“Shopping cart of extra’s”
I’m waiting for them to add: “Would you like fries with that?” or “Perhaps a little Grey Poupon?”
@Steve
Not sure if he’s buying IDNs, but certainly he’s buying domains in other languages, not just English keywords.
@Joe,
I have just noticed a bit more competition for the idn.com drops and was wondering if some of the more traditional investors were venturing outside of English.com
Cheers and all the best in 2012 to all!!
Acro@
Mike IS buying domains at reg fee,many times he beat me to it at the drops.
Steve@
He is buying foreign domains as well,but some of his Romanian domains are crap,i know that because i’m Romanaian.
@Rich,
Making mistakes in the idn.com market is understandable. Not speaking a language and trying to pickup good names can be a bit hairy. Most are so cheap that even a 50/50% split of good and bad names should produce a windfall once idn.idn for .com goes live later this year or next. imho
It’s a shame that warehousing of domains is allowed.
Nord, not like these names would be available for you to register them based on your whims, these people made an investment to purchase and invest in this sector so it could build out.
Same goes for waterfront property, many times a single developer comes in and purchases multiple properties and sits on them for years, why is this allowed?
Why are you allowed to purchase more than a single share in a company, are you not hoarding?
This is the evolution of business, people who invest their money are either rewarded, or are not, investment is what allows prosperity, if we all sat around twiddling our thumbs waiting, and waiting, nothing would ever get done.
The same drops Mike Mann is grabbing you have equal chance to grab, you have to be willing to invest your money, like himself and others do, if you want to benefit, it is just strictly business, nothing personal.
Domains are a rather unusual kind of property and so may warrant unusual regulation.
No potential buyer should be too greatly inconvenienced if I buy up a bunch of waterfront homes and hoard them. He’ll find some other agreeable place to live.
But there is only one exact match .com, and alternatives may be much less satisfactory. Not only owing to the advantages of the exact match, but because not owning it may reflect badly on a business, or undermine confidence in a brand.
Sometimes, a domain will be worth far more to one particular buyer than any other, owing to the unique nature of the buyer’s business name or plans. The domain seller can capture this value. Under a better name allocation system, perhaps this would not be possible (eg. Allow unused domains to be forced to auction? Though I realise any such scheme may create its own difficulties).
It’s in a seller’s interest to turn down a good offer, if that offer is only a little better than fair value, in the hope of hitting the jackpot once in a while. This doesn’t seem a healthy state of affairs. Some months ago I made what will probably turn out to be the highest offer a certain domain will ever receive. Seller turned it down, probably knowing full well it was good, in the hope of getting more. Now the domain is likely to remain permanently on the shelf.
Great, another 100,000 parked domains.
If true, good luck.
I see it this way….every domain I own was unloved and unwanted. I invested, and like any other business hoped to buy low, sell high. Slowly, they have gained value.
Now by showcasing these names to end users and offering them details of how their businesses will benefit and potentially profit highly from a worthy domain name, we all win!
SO MANY are clueless in regard to domains.
I also feel that domain resellers help to bring order to the marketplace by offering some structure and flow to an otherwise wild west shit throw.
The astute will prevail, as expected, as should be………………..Craig
one might guess he is a desperate seller.
300+ names @$8/yr most of which draw no traffic.
and most do NOT sell.
300,000+ names is a lot of domains
Hmm.
100000domainsayear.com is still available.
Guess he missed one.
Ok, aside from my poor attempt at a joke, obviously he is monetizing his traffic successfully. If you look at the page his domains redirect to, you get to the search engine for his domain inventory. So clearly he knows his numbers, and the traffic generated by the redirects results in profitable sales results from his ever increasing domain inventory.
100,000 new domains at average purchase price of $100 (mike buys a lot on snap,namejet and tdnam auctions) = $10m cost
Let’s guess he does a 2% on his annual sales rate (Since he’s not parking the domains and they are typically linked right to a for sale page. I’m guessing his sale rate is higher) with an average price point of a mere $1000. That would put him at $2m first yr gross profit with a bill of $800k due on those renewals. Am I too conservative or missing anything Mike ? We all know you tend to sell for a lot more than $1k.
does anyone know the model Mike is following?
@ Nord ….. Quote: “Under a better name allocation system, perhaps this would not be possible (eg. Allow unused domains to be forced to auction?”
Are you a socialist? Share and share alike?
So you are looking for an equitable solution through forced regulation on what domain property owners can or can not do with their domains?
How anti-capitalist can you be, Nord? Why not also fine domain owners for non-use also for tax revenue? Or even better, just take domains at will.
That’s really the secret agenda of socialists like you.
I have never been any good at chasing – cost me lot and lots – apparantly he is good at it
A large proportion of domains that could be useful but are currently parked will never be sold, which may suggest that the market is not working well.
That sometimes one bidder may pay far more than anyone else creates big distortions. Rather than sell five domains at market value, it’s easier to wait for the one that sells at five times market value and leave the other four parked.
I’m not opposed to the free market, but occasionally it could use a helping hand.
Nord, you are using your househod not effectively, let your fascist govt take it away from you and use it more effectively
Fine, they can take my house as long as they pay me enough to buy a replacement of similar quality, plus a small sum for the inconvenience.
This is a fun and interesting experiment to watch with someone else’s money.
mike formula
he buys loads of domain names
im not sure if they are all generic terms
he makes nothing on parking
but hopes someone will pay a huge price for a domain, which offsets the price paid for the other useless domains and makes a profit (providing the sold domain is sold at a ridiculous price
is this correct?
why focus on the renewal price? why did everyone on this board do this?
mann sold his first portfolio for 80 million. thats the key and every one missed this point. so mann has 80 million plus a track record second to schwartz..thats the point.now on to the second point mann has a portofolio up and operating…with a cash flow..schwartz has grossed over 13 million from one domain porno.com…its easy to expand when you have a ton of cash and cash flow.thats biz management.
and these commets show the inexperience of every domainer on this board.
“Second to Schwartz”? No thanks, read the record and see http://www.mikemann.com