Broker of the Year Award Winners & Nominees From Sedo Provide an Inside Look at the Business of Buying and Selling Domains

After a long recession the domain aftermarket began bouncing back in a big way in 2013. With PPC revenues still down from their historic highs, domain sales have become increasingly important to large portfolio owners. 

That emphasis on sales has also put domain brokers on center stage more than ever before. Sedo is fortunate to have some of the best ones in the business, including Negar Hajikhani who won T.R.A.F.F.I.C.'s 2013 Broker of the Year Award, Dave Evanson, who won the same honor in 2012 and was nominated again in 2013, and Brian Michitti, who was nominated for the 2013 award. Two former Sedo brokers were also among the 2013 Broker of the Year nominees. 

With the increasing reliance on successful domain brokers, I connected with Negar, Dave and Brian to get their insight into what you might call "the art" of domain brokerage. 

Image from Bigstock

DNJournal.com: As successful brokers you have all reached a level that many others aspire to. What personal and business traits do you think have contributed to your success in the field?

Brian: I would point towards a mixture of luck, resourcefulness, and persistence--bordering on stubbornness. But I certainly have to say luck has been a big contributor to where I am now. Actually, I first came to Germany to play American Football after turning down a job offer from Morgan Stanley. A lot of people in my close circles probably thought I was crazy, but I had a plan the entire time and I was stubborn enough to ignore the naysayers, do what I thought was right, and come out happier in the end.  After a whirlwind of events I parlayed football in Germany to another job in Belgium that took me to projects in Africa, Russia, and the Caribbean. I got lucky to meet some of the right people and that brought me full circle to Sedo. I encountered numerous challenges along the way and I have been able to incorporate experience from all walks of life into who I am now and my work as a domain broker.

DNJournal.com: In addition to have a lot of top brokers now, Sedo was the place where many brokers now working elsewhere got their start.  What has made the company such a productive training ground for domain brokers?

Negar:  I have had the luxury to be a part of a company that has been an active participant in the evolution of the domain industry. Sedo was established more than 13 years ago and I have been with the company now for almost five years. There’s a great sense of teamwork at Sedo; we all work great together and learn a lot from each other. As the largest brokerage in the industry, Sedo is a natural starting point for prospective domain purchasers, so as employees, we are fortunate to benefit from being a first industry touch-point for many clients. Being involved in big deals is a great experience for some of our younger brokers to learn from our veterans and see how deals materialize. In addition to having an excellent team of brokers that shares thoughts, ideas and experiences, Sedo's expertise extends to all areas of domain monetization. Our brokers collaborate with colleagues in all aspects of the business, which gives us increased understanding of the industry and of our client’s needs. 

DNJournal.com:  Brokers in other fields are usually dealing with assets that have widely known and accepted value points (as in traditional real estate where there are many comp sales in the immediate neighborhood that establish values). With domain, value is often in the eye of the eye of the beholder and buyers and sellers seldom see eye to eye. Does that make domains a much harder asset to broker than other assets?

Negar:  It is not necessarily harder, but I agree there are unique challenges for domain brokers.  You definitely do need an excellent understanding of the industry in order to successfully sell domain names. One of the advantages we have at Sedo is that we are the largest domain marketplace and process more than 40,000 sales a year. This means that although domain sales don't have the recognition that traditional real estate does, we are able to draw upon a large amount of historical data to help facilitate a sale. The fact that Sedo is one of the longest established players in the market means that we are able to demonstrate objective valuations to buyers and sellers, and a level of trust already exists with our clients.  

Dave: Domain valuation continues to be one of the toughest aspects of domain brokerage.  Not only is it somewhat subjective but it is also often driven by the motivations and expectations of the buyer and/or seller.  The valuation exercise varies greatly when working with people who have sophistication around domains vs. those that are inexperienced or even kind of clueless. Further, while I focus on end user sales there are typically retail and wholesale (i.e., domain investor) valuations for domains. Fairly often one side in a deal is thinking retail pricing and the other side wholesale. Sometimes buyers and sellers are so far apart it takes time and work to get them on the same page or planet. This makes completing deals more challenging because you can’t easily point to comps since many deals (especially higher priced deals) are kept confidential and the published data points can be several years apart.  

DNJournal.com: You’ve been involved in many important transactions, do you have a favorite among those and if so why?

Negar:  After almost five years with Sedo and lots of interesting deals it is tough to choose a single one over all the others. What I have found most interesting over the years is working along the entire spectrum of clients – from young start-up companies all the way to large international corporations. It is fascinating to help start-up companies find the perfect domain name that communicates their brand new ideas to the world and helps them grow. Large corporations, on the other hand, already have their own domain name, but are often looking to add more variety to their product line and web presentation. Guiding them through this intricate process can be a very interesting and rewarding experience. My favorite challenge is usually negotiating deals between different countries in a different language. For example, the sales of 606.com and yiwanfuweng.com (the Chinese version of billionaire.com), I had to negotiate from start to finish in Mandarin. That was not always easy, but thanks to my international business background and my work experience in China it all worked out in the end.  It also turned out to be important to be aware of the symbolism of numbers, words, and characters in different cultures, especially when appraising the value of a foreign domain name. Since “8” is a lucky number in China, and “28” means “double luck”, the owner of the domain 28.com is likely a very lucky person. Knowing all of these hidden meanings and cultural differences makes these kind of negotiations both hard and interesting at the same time.

DNJournal.com:  In recent months we have seen a nice surge in higher end sales. What is your take on the state of the domain market today and where it may be headed – particularly with respect to how the impending arrival of hundreds of new gTLDs may affect the aftermarket?

Negar: The domain market is very healthy and sales are consistent. The arrival of new gTLDs is going to help the aftermarket and bring in new buyers. In general the economy has improved and consumer confidence is increasing. I am also very excited about our new gTLD services as it generates many new opportunities for our industry. I do expect the market to become tougher after that and there are some clouds on the horizon due to the onward march of technology: Increased use of smartphones and tablets using apps to directly connect businesses to consumers and also search engine adoption of Natural Language Processing (NLP) is advancing to the point where they understand the full meaning of phrases and can more effectively match their customers to websites or apps. Less confusion in the search space could also reduce the demand for domains as smaller operators are pushed out internet commerce in particular. But these are just some bumps in the road that we’ll have to navigate. 

Sedo's Negar Hajikhani (4th from left) accepting the 2013 
T.R.A.F.F.I.C. Broker of the Year Award (the first female to win the award).

Dave: There are many positive indicators for the domain market today. I think it will continue to trend upward with very large sums of money flowing into the industry from pockets of wealth around the globe.  I see .com, in particular, and some other current extensions remaining strong but I also expect to see some new extensions emerge over the next several years.  I know Sedo has been actively gearing up to provide a broad array of services in and around the new gTLDs space, which will certainly mark a new chapter in our industry and create new opportunities.

Since it’s probably a bit too complicated to predict the world-economy’s domino effects on the domain market, I will assume it as a constant.  If that stays true I believe we are going to see a continued robust secondary market fueled by a lot of new players and awareness brought to the industry from the press surrounding the gTLDs.  In the long-term I believe there will be a few new extensions that will thrive and extensions like .net and .info will struggle.  Brandable ccTLDs, like .tv, .me, and .it will benefit from the new gTLDs. But for the next 5+ years, .com will continue to be the king.