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10/16/2006
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Domain Name Site Sets Up Auction

The new seven-day auction platform will augment a traditional model where domain names are posted on the site for sale and prices are negotiated.

Sedo.com LLC plans to introduce this week an auction service for domain name sales, a company executive said Monday.

Jeremiah Johnston, COO and general counsel for the online marketplace for buyers and sellers for domain names and Web sites, said the new seven-day auction platform will augment a traditional model, where domain names are posted on the site for sale and price negotiated.

The eBay-like model aims to satisfy requests by businesses, as well as professional investors who purchase high-ticket domain names each year.

"Domain names will be put up for sale using the traditional model," Johnston said. "Someone who has a domain name receiving multiple offers from multiple parties can push the sale to our new auction model."

Sedo boasts six million domains for sale on the site, and more than 500,000 users worldwide, who collectively spent more than $25 million to purchase domains through the marketplace in the past year.

CollectiveX.com founder and CEO Clarence Wooten Jr. has bought and sold names. "I think auctions for domain names offer a viable business model, especially when you're trying to reach a large market" he said. "Today, literally any name you can think of has been registered. So if you're looking for a particular name, someone likely already owns it."

Similarly, Blogger Anthony Citrano owns a small portfolio of domain names. Two years ago, he tried auctioning one on eBay, and would likely not go that route again, but rather look for a site that could assist in the sale.

"What makes the auction site for domain names attractive is when the company co-markets the domain name with you because it provides increased visibility," Citrano said.

Citrano, who has bought about 100 domain names, and sold 25, in the past 10 years, said an auction would pull in buyers that otherwise might not encounter the sale, which is likely to drive up the asking price.

"If you're going to buy domain names, one-syllable names typically do the best to bring in the most money," he said.

Some of the domain names Sedo expects will use the auction feature when the service goes live later this week includes Portals.com, Maid.com, Nerd.com, and Janitors.com. Johnston said some of the top sellers this year have been Bike.com for $500,000; Blue.com, $500,000; WiFi.com, $225,000; and Nasty.com for $200,000.

"The value of these domains can be re-earned quickly," Johnston said. "If you were a WiFi router manufacturer and wanted to buy all the traffic that goes through the keyword WiFi in Overture on the Yahoo network, the amount of targeted traffic going through the domain would pay for itself within two years."

Johnston said popular domain names also include those related to online services, such as travel, video games, and music.

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