Tim Schumacher, Co-Founder and CEO of Sedo.com
By Derek Iwasiuk
September 30, 2008
Sedo, an acronym for Search Engine for Domain Offers, is the leading online marketplace for buying and selling domain names and websites. Headquartered in Cambridge, Mass., Sedo has assembled the world's largest database of domain names for sale, with more than 14 million listings. The success of Sedo's model has attracted a global membership base of more than 790,000 domain professionals. Sedo is majority-owned by AdLINK Group, which is part of the German United Internet AG (ISIN DE0005089031/ WKN 508903). Sedo offers regional versions of its site for the UK (Sedo.co.uk), France (Sedo.fr), Germany (Sedo.de), and Spain (Sedo.com).
DomainInformer: Would you tell us a few words about yourself and your professional background? How long have you been working in the domain industry?
Tim Schumacher: I completed my diploma in business administration from the University of Cologne, Germany and then went on to continue my studies with a major in finance at Stockholm School of Economics in Sweden and CEMS-Master of the Community of European Management Schools. It was my Master’s Thesis titled “Price Formation in the Domain Name Secondary Market” that piqued my interest in the secondary domain market and inspired me to get started in the secondary domain marketplace.
I’ve been working in the secondary domain market since Sedo was founded in 2001. Since our founding, we’ve become the world’s largest secondary domain marketplace and award winning domain parking provider. In addition to these accomplishments, I co-authored Domain-Namen im Internet, Germany’s definitive guide to domain names.
DomainInformer: For six years, Sedo has been performing very successfully. How did you manage to achieve such a significant progress and position Sedo as a leading marketplace for buying and selling domain names?
Tim Schumacher: The majority of our growth can be attributed to our success in helping domain sellers achieve their goals in finding the right buyer for their domains, and in helping thousands of companies find the domain they need for their online business. We also made a strategic decision to expand internationally at an early stage, which helped us to establish the global footprint that we have today. We have Sedo customers all around the globe who are served with personalized service with local language support for more than twenty one different languages.
After achieving success with our secondary domain marketplace, we decided to leverage our knowledge of domains in creating our own domain parking program in July 2002. We later launched a domain parking program tailored for professional domain parkers, SedoPro, back in September 2005. In June 2007, we acquired industry pioneer, GreatDomains.com, and rebranded this site as the premier location for the finest domain names available on the secondary domain market and specializing in Premium Auction events.
DomainInformer: Tell us more about the portfolio of domain services that you offer. How does Sedo’s suite of services help its customers generate revenue and add value to their domain portfolios?
Tim Schumacher: We offer a wide range of secondary domain market services including our domain marketplace, where buyers and sellers can connect to trade domains and Websites, several types of domain auctions, domain brokerage, domain escrow and transfer services, and domain parking. The assortment of services that we offer to the Sedo community allows our members to find the perfect mix for their unique domain investment strategy. In addition, we are able to leverage our expertise in the industry across all of our service offerings, thereby offering customers the best performing domain tools.
DomainInformer: We’ve heard a lot of controversial opinions about domain parking. It seems that the demand for a profitable alternative to traditional domain parking is on the rise. How does Sedo respond to this trend?
Tim Schumacher: Depending on the domain and business model, it might be more profitable to develop the domain. Otherwise I really don’t see any alternative to domain parking. According to a recent Sedo report, advertising revenue generated from domain name parking, or matching pay-per-click advertisements with relevant domain names, increased substantially on a per site basis. In 2007, Sedo paid out more than $50 million to its community of domain owners using the company’s award winning parking program to monetize their unused domains.
The idea behind domain parking is to instantly create a profitable Website, in minutes. There are other reasons why domain owners may chose to park their domains. Some may be interested in learning about the domain’s traffic or traffic value without hosting the site on their own, and others may be interested in promoting the domain’s sale. We do, however, see opportunities in integrating different types of advertising models and expanding the ad networks and we are always researching and testing new options to ensure our parking program continues to deliver the highest payouts.
DomainInformer: What makes Sedo different from the other companies in the industry and takes the company ahead of the competition?
Tim Schumacher: With the world's largest database of more than 14 million listings in more than 21 languages and a global membership base of more than 790,000 domain professionals, Sedo’s global domain name marketplace is both comprehensive and unique. Sedo stands alone as the global domain provider offering the widest range of tools and services, such as domain brokerage, domain monetization, domain appraisals and domain transfers, which enable our customers to plan and execute a unique and successful domain strategy. We offer global monetization with geo-targeting to ensure the best possible revenue.
Moreover, Sedo’s leading secondary domain name marketplace has long served as an index for industry performance, and the company topped the $70 million mark in domain sales brokered in 2007.
DomainInformer: What does Sedo do to retain its existing customer base and how would you recommend the company to potential clients?
Tim Schumacher: We maintain our customer base by continuing to offer top quality domain tools and services. We are constantly innovating our tools by working with customers to ensure that we meet customer needs.
For instance, in light of customer feedback and testing Sedo performed with existing users, the company recently revamped how domain details pages look to personalize transactions.
The changes add information about the seller of the domain, including how much activity the seller has participated in as a seller on Sedo. This is helpful for domain buyers tired of placing offers and not receiving a response.
So, we would recommend potential clients to give us a try, as our tools and results speak for themselves. Creating an account, listing domains and parking are all completely free. Moreover, we only charge a 10% fee if you find the right buyer and decide to sell your domain.
DomainInformer: What are your plans and ambitions for Sedo? How do you see it evolving over the next five years?
Tim Schumacher: The popular .com and .net TLDs, while increasing by 24 percent in registrations in 2007, grew by an estimated 53 percent in purchases on the secondary domain market. Given that this significant uptake in demand for premium domains will likely continue to fuel market growth, Sedo expects to triple the number of its domain name listings and languages in which they are listed, as well as the size of its community of domain professionals.
Furthermore, we are confident that Sedo’s secondary domain market will become a mainstream market in the next five years, being the first place business and Internet users will search for the perfect domain for their business or Website.
DomainInformer: How would you comment the ICANN decision to relax the rules on top-level domains? What will be the general impact on the domain industry?
Tim Schumacher: This has still to be seen. There are two scenarios possible: either it will have no impact at all (since consumers will ignore it, and .com and the various important ccTLDs like .de, .co.uk, .cn… will continue to rule direct navigation). The other possibility is that ICANN’s decision to relax domain name rules will have a tremendous impact on the overall growth of the industry, as it will expand the amount of high quality domains available for purchase.
DomainInformer: What are the basic changes that the secondary domain market has gone through over the years?
Tim Schumacher: There have been a number of changes to the secondary domain market over the years. Most of which are market changes in valuations. We’ve also seen the rise of new TLDs, with a vast number of ccTLDs and even newly sponsored TLDs in more recent years. All these changes have lead to a more robust secondary domain market.
DomainInformer: How do you see the future development of domain name industry and what will be the Sedo’s role and contribution in it?
Tim Schumacher: Domains are the real estate of the internet and are definitely here to stay. The most generic descriptive domains will continue to grow in value and demand, especially as the number of domains available increases. In the future, the Sedo marketplace will continue to connect domain buyers and sellers from all over the world to assist them in achieving their goals. We will also continue to be a valuable source for Internet advertising, leading Internet visitors to the products and services they are looking for
on the Web.
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