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⚔️ Will Websites Overtake Domains?
I asked the domaining crowd on Twitter for any graphs on domain name ROI and got sent a report by escrow.com which compared sales of domains without content (domaining) with domains with content (websites). Due to the Flippa partnership with escrow, website transaction volume is quickly gaining on the world of domaining (as shown in the graph above). I wonder if we will surpass them this year.
I’d love to know what total size of asset classes we are dealing with here, i.e. how much money is in domains / how much wealth is locked up in content sites. And it would be great to see research demonstrating whether investing in websites can improve risk-adjusted returns of portfolios, such as there has been on gold as a strategic asset class by gold.org (a $53K domain name according to Estibot in case you were wondering).
This post by Morgan Linton talks about the value of 4-letter .coms. There are 456,976 combinations of 4L domains, where if you place a $150 average valuation (liquidation value) you get to a theoretical market cap of under $70MM. If this were a crypto asset, it would be placed at 86th on Coin Market Cap, competing with a load of trashy alt-coins with little to no use-case. Whereas every website actually needs a domain, and every domain needs a website to generate revenue.
I’m going to be looking into this further, but if anyone has any views on this, leave a comment on the web version of this post.
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⛔ Mediavine Sellers In A Bind
There’s been a lot of discussions in the facebook groups from investors looking to pick up sites that are monetized through Mediavine who are finding out they no longer qualify. Mediavine recently changed its policy (reported in last week’s newsletter) where sites now need to have a minimum of 50K sessions (up from 25K) to be able to apply, and that if you buy a site that is currently on Mediavine you have to re-apply. If the site you have bought is below 50K sessions, then it won’t get approved and can no longer be monetized by Mediavine. This may affect the pricing of content site listings that use Mediavine, and can be used as leverage by investors to reduce the price.
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⚔️ Big Sites Vs Small Sites
Dom Wells wrote a guest post for Flippa about whether smaller sites have more room to grow.
Dom’s personal preference is for larger sites, as they have a greater track record and more cashflow to play with; however, he recognizes that smaller sites can often have more low hanging fruit and easy wins. Talking about growing one of his client’s smaller sites, Dom states:
By changing up a couple of monetization methods, were able to increase its profit by 75% almost instantly. You can’t do that with a larger site, because many of those quick-wins have been done already.
He then asks this great question:
Do you think it’s easier to add 100% to a $50k website, or 10% to a $500k website?
I think its easier to do the latter, but your downside risk is 10x greater which is more important to me, and why I personally choose to build out on non-revenue generating starter sites and aged domains.
🗒️ More Flipping Newsletters
Paying subscriber and top website flipper Mushfiq Sarker has joined the Substack club and is posting case studies of generating upside from his acquisitions. He currently has case studies for an outdoor site and a dating site where he posts monthly metric updates, along with changes made. If you’re interested in website flipping case studies then you should sign up to his newsletter and follow along.
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