Nye Lands Big Investment, Talks With Domain-Name Legend

Frank Schilling, one of the world’s most successful domain investors, has a must-read Q&A with Tim Nye, founder of Geosign, on his blog. Geosign is a new media company that just announced it has raised $160 million in private equity from American Capital. Guelph, Ontario-based Geosign has been selectively buying generic domains from smaller investors to enhance its list of content sites, which include DietNation.com and ThinkFashion.com.

In the Q&A, Nye opines on the frequent disconnect between domain investors and private-equity investors:

The challenge for the typical domainer is that the investors want to invest in companies and not portfolios. A large PE firm is not going to give 100M to a guy who works in his basement in his underwear no matter how clean their portfolio is. I also don’t think they really get the underlying brand value. It’s definitely getting better, but it’s still not a mature investing community. Multiples are understood, but the typos and adult, and trademark issues are scaring people a little.


1 Response to “Nye Lands Big Investment, Talks With Domain-Name Legend”

  1. 1 Doug March 20, 2007 at 12:23 pm

    It is truly amazing to sees these companies investing huge amounts of money into businesses built like houses of cards.

    While domainers like to say that their revenue is derived from type in traffic or direct navigation geosign proves otherwise. It is well known in the industry that geosign is involved in a massive ad abritrage campaign that is unparalleled in the industry.

    Geosign is so aggressive in the purchase of google ad words that often the sponsored results generated at google contain more than one link to a geosign sponsored domain.

    I suppose that as long as the search engines make money off of this activity that it will continue to be made available to companies like Geosign but just because they are making money on click arbitrage does not equate to their having a portfilio worth 160 million in investment capital.

    Good luck to the investor, they are going to need it because if the market changes the money is gone! There is no redeeming value in the geosign domain name collection itself.

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