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03|09|2008 11:19 pm EDT

Godaddy and Dark Blue Sea Strengthen Relationships

by Adam Strong in Categories: Domain Aftermarket

Dark Blue Sea, parent company of Fabulous.com have entered into a five year agreement with Godaddy to sell domain names from the Dark Blue Sea portfolio through Godaddy’s sales channels. The agreement also puts Godaddy in a position to become a major shareholder in DBS.

As part of the agreement, Godaddy will be delivering improvements on “the way secondary market domains are sold through their network”.  In return DBS is allowing up to 6.5 million shares to be exercised at $ .65 per share.  1.6 million of the options can be exercised immediately and the remainder over the course of the contract given that certain sales targets are met.  Godaddy would be expected to have completed 45,000 domain sales to be able to exercise all options.

DBS expects the agreement to significantly increase the rate of after-market domain sales from their portfolio.  Details on the options and specifics of the agreement can be found in the filings on the Austrlian Stock Exchange and can be seen on finance.yahoo.com.au (search for dbs.ax).

For more insight, Whizzbang scooped the story and gives his take. The company’s official share holder release is availble through the pdf at this link.

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6 Comments

Steve M

March 10, 2008 @ 3:27 pm EDT

What are you guys’ thoughts on this development?

Adam Strong

March 10, 2008 @ 5:47 pm EDT

who guys ? If you mean me,
I think this will be good for all involved.
Importantly, I think the deal shows the power that the registrar sales channel has to sell after-market domains. Selling within whois is probably the most powerful.

Fabulous wouldn’t have made a deal of this size without confidence that godaddy could deliver. They’ve been selling and testing with godaddy prior to this so I’m betting this was a well thought and sound strategy to take with mounds of “Dan Warner Data” to back it up.

For Godaddy’s size they are pretty quick to add new features and products (and thus revenue). I think other registrars need to wake up to this reality and fine tune their businesses and start selling after-market domains in the most appropriate channels. However, I would’t count on that happening anytime soon with some of them, meanwhile millions are being left on the table.

Steve M

March 11, 2008 @ 5:01 pm EDT

Thanks for the insight, guys (er, I mean Adam). ;-)

Frank Michlick

March 11, 2008 @ 8:13 pm EDT

In case I am one of the guys ;-) I’ll respond here as well.

I think that adding a public recognized channel like GoDaddy can significantly help the domain owners by attaching a recognizable brand to premium domains.

According to some data I heard from Fabulous, this can already make a difference when a user enters a domain name directly (many users check this way to see if a name is available, even if it’s far from accurate) and sees a GoDaddy banner next to premium sales price. The brand recognition factor works much better than when a site calls “FabulousDomains” pops up in the browser where you can now purchase the domain.

Sending the buyer elsewhere probably costs Fabulous a little more than selling the domain itself, however if that’s what it takes to make the sale happen, then it’s worth while.

/FM

Adam Strong

March 11, 2008 @ 9:46 pm EDT

The power of a brand is what you are talking about Frank. Seems to me that those SuperBowl ads pay off in more ways than one. When will Fabulous start running there own ? :)

Steve M

March 12, 2008 @ 2:53 pm EDT

Thanks, Frank.

Given GD’s high name recognition, your brand value point makes a lot of sense (though I prefer working w/the Fab folks myself).

And the Adam/Frank “combo” was why I said “guys.” ;-)

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