Thursday, 17 September 2009 16:18
This afternoon at 3 PM EST, Xoxide.com closed on Sedo at $76,000 to as of yet unknown bidder. For most, this number would represent a large sum for a brandable domain, but Xoxide is much more.
Xoxide's former owner asserts that the domain receives 200k uniques monthly, and grosses 2.4 million per year. Since proof is not provided in the form of IRS statements or financials of any kind, domainers who would like to bid on this domain are forced to use the tools available to them to create an evaluation.
As posted on Namepros yesterday, our methods for buying traffic without getting a firsthand look at the statistics force us to use the estimates provided by common traffic providers. The most prominent of these are Alexa, Compete and Quantcast. Alexa provides Global statistics on traffic and keywords. Quantcast and Compete provide US traffic and keywords as well as demographic analysis.
First, looking at Alexa's stats, we see that Xoxide has been averaging a 40k rank, with primary search terms of "computer cases", "computer case" and a myriad of other tech items. When searching on Google we see that we have #1 rank for several of these terms with heavy ad competition (over 200 advertisers for computer cases). Users typically view about 5 pages, which is about average for a tech products targeted site, and bounce is about 40% which is a bit high, but this might be accounted for by users clicking "add to cart" which redirects to order.store.yahoo.net/xoxide. Alexa also shows us that the majority of the traffic to the site is US Visitors, about 80%. We can now use this formula to calculate the net result of traffic with the other providers.
Compete's data for Xoxide shows about 45k monthly visitors, Quantcast about 25k monthly. Taking the average of these two we could say that Xoxide gets about 35k monthly US visitors, and with Alexa displaying US traffic at 80% of total, this would put traffic around 40k total worldwide.
So now we have determined within some reasonable measure, what the total traffic to the site is on an average monthly basis over the past 3 months. This is probably the most complete methodology we can use without seeing the raw data. While each one of these sites we have used could potentially be incorrect, by putting all three together and averaging them out we can say we are at least close to the final number.
Since our search terms all match, we can try to guess what this traffic is worth. Adwords bids for computer cases are near the $2 mark, and payout would probably be about $0.40 per click if done properly with Adsense, Chitika, Clickbank etc. Click Through Rate (CTR), should be at least 10% since we are directly relevant to our content, and with 40k users that's about 10,000 clicks at .40 cents, or net $4,000 per month as a lowball sum.
Provided Xoxide was at least a break-even business model, those clicks are worth their full bids, so I would at least triple the lowball guaranteed ad revenue we just laid out. This would put earnings at between $10k and $15k per month, or $125k per year and up. I believe that to a direct resell computer case manufacturer this would be worth at least 5 year's earnings, due to the solid ranking at the top of the list. Anyone who purchased this will hopefully start making phone calls to some smart corporations and get this in someone's pockets for a cool 750k or more.
