Vodka.com worth $3m USD.

[UFO.ORG]

Ok, Vodka.com sold for $3m USD.

Not surprisingly it sold to a Russian company.

Too high, too low... what?

[UFO.ORG]

Ok,

Given there were approx 24k of searches on the Yahoo network and they comprise I believe around 20% market share then there's going to be approx 100k searches per month.

Given there were around 120 searches for the .com variety then I would hazard a guess at 125-250 uniques per day. If these uniques are valued at say 20c USD to acquire then we are talking 250*0.2*365 to acquire PA. Say $20k USD. Using say a PE multiple of 20 then this equates to a market cap of say $400k. However, more uniques could be achieved for less outlay so I'd chop that in half. Say $200k.

Ok, were short some $2.8m on this equation. How do we bridge the gap?

As most domainers would probably realize, the value is in the brand enhancement.

Marketing costs in this type of industry can consume (I believe) up to 20% of turnover.

So if you're turning over $100m then you could be spending $10-20m on advertising. So over 10 years you could spend $100-200m.

If you're trying to access the US market and produce different brands and tap into diff market segments then brand development is not a cheap exercise.

A top URL that has excellent recollection works well and ENHANCES the payback (ROI) on the different media channels. A 5 letter .com can quickly be remembered. It can link the consumer from the media to the site in a seamless fashion. (If the .com stated in the media with your brand (or new brand ranges) can improve your marketing effectiveness by 10% then its worth $1-2m Pa... multiply that by 10 etc then you can see its worth a lot of money to an appropriately sized company).

The .com could also speed up the market acceptance and brand identity of new product which is also worth a lot of money.

So, the .com in conjunction with an appropriately sized company looking for "Western acceptance" and engaging in rapid brand development/new product roll out.... could easily make the $3m price payback within a short period of time.

Also, in ego terms... it’s a big finger to the established competitors. That could be worth a few million in its own right.. Don’t believe me? Look at all the UK football clubs being bought out... It’s the sport of Oligarchs.