2010/05/04

Domain Name News: Oversee.net Shares For Sale

Posted: 03 May 2010 08:54 AM PDT

Looking to invest in the domain space, but can’t find any good domains for sale? How about buying stock in a company that owns over 600,000 domains, but also monetizes millions of domains and has auctioned millions of dollars in domains? How about buying shares of Oversee.net ?

Up until recently you couldn’t buy these privately held shares, unless of course you wanted to dump millions of dollars in to the company, and even that could prove difficult. Thanks to new sites like SharesPost.com you now can buy shares of many private companies like Facebook, Twitter, and now Oversee.net.

SharesPost currently has a few blocks of Oversee.net stock for sale with a per share price of $7.35. The smallest block of shares available is 4,200 and priced at $30,870. You’ll need to sign-up to see the current offerings. (SharesPost requested that we take down the screen-shots of the current offerings)

The sale of these shares are subject to a few conditions such as first rights of refusal, a co-sale agreement and subject to company share-holders agreement. We’ve been told that some of these shares are shares of long-time employees who are looking to take a little money off the table.

Interestingly, SharesPost includes an “implied valuation” of Oversee based on the estimated number of fully-diluted shares and the listed share price. This number is just an estimate but it’s an interesting number. It puts the valuation of Oversee.net at over $1.1 Billion.

SharesPost lists the description of the company as:

Oversee.net is a domain parking and lead generation company founded in 2001. The company owns one of the largest portfolios of domain names in the world. The company's unique optimized technology connects consumers and advertisers with highly relevant advertisements. Oversee also serves as a primary and secondary marketplace for domain names.

Oversee's revenues are reportedly more than $200 million per year. Headquartered in Los Angeles, the company has reportedly not taken any outside funding.

It looks like SharesPost has some outdated info as the description states Oversee has not taken outside funding, when most know and it has been publicly reported that they received $150 million from Oak Hill Capital Partners. It’s worth noting that Oak Hill, founded by oil-man billionaire Robert Bass, has invested in some of the world’s largest companies. Maybe “going along for the ride” and owning shares along with one of America’s wealthiest men might be something worth looking into.

Something domainers who are heavily entrenched in the domain business may want to think about when owning these shares is that share owners often have information rights. Insight into a $200 million domain company backed by big private equity could be valuable to any domainer in terms of providing valuable insight into how to run their own business.

Regardless, Oversee is a behemoth company with a portfolio of over 600,000 domains and runs, among other ventures, domain name registrar Moniker.com, domain auction house SnapNames.com, the DomainFest Global conference. They are probably best known for creating the PPC company DomainSponsor.com in 2001. If you are a believer in the domain space and think that there is long-term value in a domain portfolio or simply find value in a company reportedly generating over $200 million a year in revenue, this could be a great investment opportunity.

If you want to invest in a company in the domain space, there are other opportunities and there may be more on the horizon. Marchex and LiveCurrent are traded but they haven’t weathered the recent market climate well. There’s also Tucows, which was recently mentioned on another blog as a “value investment”. Photon Group which now owns Dark Blue Sea is publicly trade in Australia . Demand Media is also exploring a public offering and even registrar giant Godaddy.com explored the IPO possibility a few years ago. Maybe even more shares of other private domain name companies will start popping up on sites like this.

For disclosure purposes, I do not own shares in any of the mentioned companies, but I am giving serious consideration to investing more in to the companies that dominate the domain space.

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