Spare Parts

[snoopy]

Snoopy, Carsales buy domains for a different reason than the rest of us. Defensive purchases.

Spending a lousy few million to make it that much harder for a new competitor to get a foothold in the market is a smart move for a $1.8bn online company.

I can understand the logic but I don't think it is really going to produce an ROI, or keep anybody out. I guess the thing is people are wasting their money bidding on names like spareparts.com.au against a bidder with a lot of money just buying for the heck of it.

Nobody is going to make money off the domain except the drop house.

 

[snoopy]

Billy, CarParts.com.au is many times more valuable than SpareParts.com.au... easily 6x, I would say.

Even if it were 6X move valuable it still makes for a weaker sale than carparts.com.au years ago.

 

[DavidL]

I can understand the logic but I don't think it is really going to produce an ROI, or keep anybody out.

As I said it will make it much harder. They aren't dummies, snoopy. Spending 1/1000th of your market cap per year to frustrate new challengers is very sensible. Esp if you are buying assets at market value so it really doesn't cost you anything on your balance sheet.

I guess the thing is people are wasting their money bidding on names like spareparts.com.au against a bidder with a lot of money just buying for the heck of it.

Well they aren't wasting any money if they don't win it. And as I said, it's naive to think Carsales are just buying domains 'for the heck of it'

Nobody is going to make money off the domain except the drop house.

Again, it wasn't bought to make money from. It was defensive.

Even if it were 6X move valuable it still makes for a weaker sale than carparts.com.au years ago.

I said easily 6x - ie carparts easily justified it's sales price. In fact Carparts.com.au exacts are 10x that of spare parts and as you've said it's much more targeted too so maybe it's worth 15, 20x?.

So, now I look more closely, I'd say it's a much stronger sale than carparts.com.au. Esp when you remember carparts.com.au was a huge sale in it's day. A record I think?

 

[snoopy]

In fact Carparts.com.au exacts are 10x that of spare parts and as you've said it's much more targeted too so maybe it's worth 15, 20x?.

[car parts] 4,400

[spare parts] 1,600

 

[DavidL]

[car parts] 4,400

[spare parts] 1,600

Hmmm, wonder what I was looking at. Sure I saw figures of 3K for spare and 30K for car. Maybe had another country selected (should have checked I did think 30K was high!)

Anyway thanks for the correction.

Still reckon it's worth more than 6x though (but probably not 20x!)

What do you think snoopy - in terms of relative value?

 

[snoopy]

Hmmm, wonder what I was looking at. Sure I saw figures of 3K for spare and 30K for car. Maybe had another country selected (should have checked I did think 30K was high!)

Anyway thanks for the correction.

Still reckon it's worth more than 6x though (but probably not 20x!)

What do you think snoopy - in terms of relative value?

Well the search popularity is 2.75X greater. Car parts is significantly better targeted (but still on the weak side in my view). If "spare parts" is a 2/10 "car parts" is a 4/10 in my view in terms of targeting. So I'd say it is twice as good in terms of targeting.

In terms of domain prices I don't think values just go up in proportion with search metrics, especially when the name is more than just something with search metrics (ie brand type appeal).

I would say something like 2.75 x 1.5 = 4.1 fold difference.

 

[DavidL]

Fair enough. I'm surprised you only think it's twice as targeted based on your post before. 'spare parts' did indeed seem to be all over the place.

 

[enjoi]

I can remember GAKT showing 18k local exacts at the time of carparts.com.au sale. Back then domains were easily valuated as $1 to the exact hence the sale price of 18k.

A little while after the sale Google updated their keyword tool and the results dropped.

 

[snoopy]

I can remember GAKT showing 18k local exacts at the time of carparts.com.au sale. Back then domains were easily valuated as $1 to the exact hence the sale price of 18k.

Sounds a strange way of valuing names. I assume people no longer look at it this way because loads of names drop with high search counts & don't get much.

 

[enjoi]

Ya very strange but I think it was more a rule of thumb haha "has search volume - must be worth something"

 

[enjoi]

Just did a quick search and my memory was correct - Carparts.com.au at the time was receiving 18,100 local exacts.

http://www.dntrade.com.au/carparts-...w-t1157.html?t=1157&highlight=carparts.com.au