Ever Heard of Flipping a Domain Registrar?

Most of my readers have heard of flipping domain names, websites, apps, and other digital products. Have you ever heard of flipping a domain registrar or dropcatcher? How about several? 🙂

This recently happened with Drop.com.au, one of the main dropcatchers/domain name registrars/ for the .AU (Australian) market. Here is how it went down.

Ned O'Meara

Ned O'Meara runs Domainer.com.au where he shares tips, advice, and thoughts mainly about the Australian name-space and domain investing.  While most of his information is geared toward the .AU domain market his advice is useful for any wanting to become a more knowledgeable domain trader. “All That Glitters is Not Necessarily Gold” is great article and I recommend you read.

While Ned might not be well known outside of the United States, he is one of the top .AU investors.  He used to run DNTrade, a discussion forum for .AU domains.  He's also helped facilitate some large domain sales according to this OzDomainer interview.

End of the Road

Ned announced that this was the “End of the Road” for him as a domain investor a couple months ago. He had several big life events in the past year and stated;

Another opportunity has been presented to me, and I intend pursuing this with vigour. More on this at a later time.

So, after discussions with “she who must be obeyed” (my wife Frances), I have decided to stop being a domainer / domain investor. Even though I have enjoyed the cut and thrust over many years, it’s now time to call it quits. I have absolutely no regrets in doing so – life is very short.

He also said in the post he was selling a lot of his .COM.AU domains and handing over Domain Syndicates and eTrading, his domain businesses, to his son Luke.  I assumed he was doing this to either retire or open up a flower shop.  Or do whatever Australians do in retirement.

Editor's Note – I don't know much about Australia. I would be happy if someone paid for a trip there to learn more about the country. I've never been but what I do know is apparently “The Bachelor's” turn women gay.  Also many people think my Singing Dogs are Australian Shepherds. That means I should visit Australia, right? 🙂

Ned O'Meara made it clear he was selling most of his domain portfolio.  More importantly he was selling premium .COM.AU domains at absolute bargain basement prices.  A partial list of domains he sold from his domain portfolio included;

  • aviationtraining.com.au
  • bandits.com.au
  • bfr.com.au
  • bgw.com.au
  • bike.net.au
  • canberraflowers.com.au
  • creator.com.au
  • crowdfunder.com.au
  • dogwalkers.com.au
  • drivinginstructors.com.au
  • executivedesks.com.au
  • facialrecognition.com.au
  • gmc.com.au
  • healthclubs.com.au
  • mountisarealestate.com.au
  • pdb.com.au
  • snooper.com.au
  • strings.com.au
  • weddingreceptions.com.au
  • luck.com.au (my favorite)

My assumption at the time was Ned was just tired of the domain industry.  He wanted out and was willing to sell cheap after so many years of success.  Much to the chagrin of whoever bought these .AU domains.

I learned later this wasn't the reason and the story didn't end there.

Ned buys Drop.com.au

In a post titled “Exciting Times Ahead” Ned announced he actually bought the domain registrar/drop catcher Drop.com.au and two other Australian domain registrars with it, Fabulous.com.au and Yexa.com.au.

All three were sold as unit by Dark Blue Sea, which owns the domain parking platform and domain registrar Fabulous.com.  (Fabulous.com.au and Fabulous.com are separate registrars and entities.)

Some big news that I can at last officially share. As from later today, I start a new business life – and it’s one that I’m extremely excited about. I haven’t been able to discuss it up until now, because I only received regulatory approval three days ago.

I’m going to the “dark side” – through a new company, I’ve purchased the three Aussie registrars owned by Dark Blue Sea (in a share sale agreement). These are: Drop.com.au; Fabulous.com.au and Yexa.com.au. There are also several other domains. Fabulous.com is not included in the sale.

The reasons for selling off his domains became more clear as auDA (.au Domain Administration Ltd) , the registry for .AU domains, has certain rules on who can own a .AU domain registrar.

In Australia, you can’t be both a registrar and a domain investor (auDA policy). So I had to go through a big process of proper legal separation – particularly given that companies I formed and grew were large portfolio holders of domain names.

Can we send ICANN this memo? Because clearly they never got it. 🙂

The purchase was an incredibly smart move by Ned.  Especially since auDA will be introducing direct .AU registrations sometime in the next few years.  Currently they allow – Example.com.au, Example.net.au, Example.org.au, etc.

Soon you can register and own Example.AU without having any to type any extra “dots” or words.

Several other domain extensions have done this which includes .MX (Mexico), .UK (United Kingdom), and .NZ (New Zealand.).  Typically when a domain registry allows direct registrations this serves the financial interest of the registry operator (wholesaler) and registrars (stores).

With over 3 million .AU domain registrations, the majority being .COM.AU, it's a excellent time to get into the .AU domain registrar business. Theoretically you could double your yearly revenue as a registrar if you get all your customers to buy the direct .AU domains. They likely wouldn't happen but you get the picture there is money to be made there.

What about the little guy? Are these moves to direct registrations good for individual domain owners and small businesses?… Well that is debatable.

In the past Ned had been critical of auDA proposals to allow direct .AU domain registrations. From an average domain owners standpoint, who doesn't care about auDA or registry operators policies, it is very confusing.  Ned wrote about the issues in two articles on Domainer.com.au titled “Follow The Money” and “Still Following The Money.”

As a registrar Ned would have financially benefited from direct .AU registrations. He stated in the Exciting Times Ahead post;

I don’t resile from any of the previous opinions I have expressed on this blog. Particularly in relation to direct registrations; and my belief that the registry contract should go out to tender later this year (as was previously agreed to by the auDA Board).

Obviously, as a registrar, I’m going to potentially benefit if and when direct registrations are introduced. But I am still of the belief that they are not necessary given the current size of our .au marketplace. I also still hope (and do trust) that auDA will properly consult with as many registrants as possible before they decide whether to actually implement direct registrations – and in what manner they intend to do so.

auDA also smartly has clauses which prevent .AU domain owners from talking sh*t about them.

Given that I will be a registrar later today, I am limited under my registrar agreement as to what I can say and do. So please don’t expect me to go on a crusade – I need to concentrate on running my new business.

So he wasn't going to backtrack on anything he stated on Domainer, which I respect.  All seemed well and good and that Drop.com.au was going to get improvements from a veteran Aussie domain investor. Then…

Ned sells Drop.com.au???

About 20 days after Ned announced he bought Drop.com.au, he surprisingly announced he was selling the domain registrar/dropcatching business.

This may come as a shock to some, but I have decided to accept an offer to buy me out of the three registrars I recently acquired from Dark Blue Sea.

He continued in the Domain post;

Ultimately there were two factors that made my decision. Personal reasons (health and well-being); and the quality of the purchaser.

Drop has been my registrar of choice for around 8 years, and I like and respect the people that work there (Cam and Katherine). I made the purchase from DBS because I believed there was an incredible opportunity to restore Drop to its former glory. And in doing so, I would be able to offer past, present and future clients a great platform for domain investing (registrar services; drop-catching and aftermarket).

The new purchaser has the same intent – and given their extensive resources, they will probably be able to achieve this far sooner than me!

There was also a DNTrade thread “Changes Happening at Drop” announcing the sale.  Ned said after the sale was complete;

I am no longer a registrar. Thanks to everyone that supported me during my brief stint on the “dark side”. I intend writing an article about the experience sometime soon. It will make for interesting reading.

Wishing Trellian and Above all the very best with their revamp of Drop. Still my favourite registrar! :)

The buyer for Drop.com.au was the Trellian group which has offices around the world but is headquartered in Melbourne, Australia. Makes sense as Drop.com.au and the associated registrars are just for the Australian market.

Trellian owns Above.com, a domain parking platform and domain registrar, and they also run several content based websites for the Australian and international market.  In addition Trellian builds search marketing and SEO (search engine optimization) software.

It is notable that Dark Blue Sea, which owns Fabulous.com, is one of the Above.com's main competitors.  Fabulous.com is also a domain parking system and domain registrar geared toward large portfolio holders.

This was a great move by Trellian, who might have been interested in purchasing Drop.com.au in the past.  I can only assume they didn't want to give money to a competitor buying a business from them.  Perhaps Trellian got a better deal buying from Ned then buying directly Dark Blue Sea?

Whatever the circumstances gives Trellian a stronger foothold in the .AU domain market, adding to the company's portfolio.

Above announced the completed sale on Twitter.

above twitter

So did Trellian;

trellian twitter

A Domain Registrar Flip

First “flip” of domain registrar, or several, I have ever seen.  If you consider this a flip. Do you?

Ned owned Drop.com.au and the associated registrars for 47 days.

Seems like an extremely short period of time. Hopefully he can finally enjoy retirement and do whatever Aussies do down under.  I assume he'll still check the .COM.AU drops and be on the lookout for good deals.

Ned's story of buying and running Drop.com.au briefly made me wonder, would you rather be a service provider ie a web hosting company or domain registrar, drop catcher, etc.? Get people to pay you for domain renewals and you for web hosting, email, etc.

Or is it a better idea to renew a few high quality domains and hope a entrepreneur or business will buy that domain? This way you don't worry about customer support and technical issues which can lead to unhappy customers. You just focus on inventory and sales.

What's is easier and what is potentially more profitable in the long run? I know I would rather run a domain registrar and web hosting company. Build a business with recurring revenue I can more easily sell.

But what about you? What are your thoughts, opinions, and experiences say to you?

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I am an auto journalist, blogger, writer, artist, and most of all dog lover. I like playing music with both my dogs, Cody and Sierra. I also love sharing quality content with the world.

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Adam Yamada-Hanff

I am an auto journalist, blogger, writer, artist, and most of all dog lover. I like playing music with both my dogs, Cody and Sierra. I also love sharing quality content with the world.

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