Q&A with Tim Schumacher, CEO/Cofounder of Sedo

In the world of domaining there is one company taking professionalism to an all-new level. This company is truly on the cutting edge and has produced the world’s #1 domain name marketplace, with now more than over 3 million domain names in their database. This company is also beating all of the other parking providers by 10%, guaranteed, a feat no other can claim. Recently we were fortunate enough to get an insiders perspective on this company, that is helping take domaining to the next level, when we had the opportunity to interview their newest CEO, Tim Schumacher, who is also one of the original cofounders. The company, none other than domaining leader, Sedo, of course.

Q: db – How did Sedo first come to be? Why did you decide to enter the domaining industry?

A: TS – Sedo was founded in late 1999 in Cologne, Germany by Ulrich Priesner, Ulrich Essmann, Marius Würzner and myself (Tim Schumacher). The concept around Sedo was actually a thesis paper that I wrote at my last year at attending the university.

Q: db – What exactly does Sedo stand for? Is it an acronym of any type?

A: TS – Sedo stands for Search Engine for Domain Offers.


Q: db – Isn’t it true that Sedo actually had to buy their own dotcom domain name in the domain name aftermarket? How exactly did this come to be and what price did Sedo pay for Sedo.com. Was the additional traffic and credibility worth the price tag that you paid for the domain name? Can you please elaborate on this?

A: TS - Yes, Sedo.com was bought on the aftermarket for $80,000 from a guy whose last name is Sedo. The negotiation process was very similar to our clients that use our Domain Acquisition Service(with us as the buyer of course).

Having the .com was a necessity for the US market. .com is just so well branded that there was no other option but to go get it.


Q: db – Sedo is a multifaceted domaining company. How did you find the perfect blend of sales and parking?

A: TS – Parking and selling go hand in hand. We still receive a lot of our offers from our parking pages. To really find the highest price for your domains you need them parked. Don’t get me wrong, Sedo.com receives millions of visitors each month and we have hundreds of thousands of active members but you put your domains in the best possible position of selling by giving your buyers a quick and secure way of making an anonymous bid through a trusted third party.

Parking is important for selling but it’s important in its own right as well. Each is equally important, like right and left hand on an ambidextrous person. We developed SedoPro to cater to domain professionals that are mainly interested in monetizing


Q: db – Not only is Sedo the #1 domain name brokerage in the world but it’s also the #1 parking company now too. Is that true? How did you become so successful to make it to the top of both realms of the domaining world?

A: TS – Well, we’re definitely the number one domain market place and brokerage. We’ve invested a lot of time in parking over the last year in parking. The result of that initiative was SedoPro. It’s a whole new parking program built for professionals with high quality traffic.


Q: db – Sedo also offers professional domain name appraisals, how important are domain appraisals to Sedo’s business model?

A: TS - Very. It’s an extremely useful tool for both the buyer and the seller. It takes the emotion out of the negotiations and helps both parties focus on what makes the name valuable.


Q: db - Sedo’s appraisals are without a doubt the most respected in the industry. What exactly goes into a professional Sedo appraisal that may differ from other appraisals?

A: TS - There are so many variables in play that it takes a real domain market expert to calculate a reliable figure. We try to go beyond the standard metrics and look at everything that makes a name valuable, even the fuzzy areas of brand ability and name retention. The appraisal will cover many aspects of the domain including its brandability, keyword relevancy, phonological retention and any trademark issues as well as compare the domain to recently sold similar domains.


Q: db – How important do you believe a professional domain name appraisal is for those looking to sell their domain names or for those that maybe curious to as how much they would be worth?

A: TS – Very important, especially for those who are not familiar with the market, either for their name or the domain market on the whole.


Q: db - Once an individual has an idea of how much they would like to sell their domain name for, how exactly would they go about listing it for sale with Sedo? Are there any fees involved?

A: TS - Listing domains for sale with Sedo is completely free. There’s only a commission once you sell a domain through us. We’ve made it as easy as possible. All anyone has to do it go to Sedo.com, click on the register link and fill out a standard registration form. You’ll be able to add your domains at the same time.


Q: db – What options do you have for people that would just like to park their names with Sedo to earn potential revenue on any traffic their names maybe producing? Are there any minimum requirements one must have or any fees that one should be aware of?

A: TS – Sedo Parking has no minimum requirements. As soon as you’ve listed your domains you can forward over the traffic to our parking servers and your names will be parked. If you just want to park and aren’t interested in offers you have the ability to list your names not for sale.


Q: db – Recently there has been a lot of buzz about a new premium parking service that Sedo is now offering called SedoPro. What exactly is SedoPro and how exactly does one qualify to participate in the SedoPro parking program?

A: TS – SedoPro is the first parking system designed specifically for domain professionals. It’s separate from our original parking program and offers the most sophisticated stats tracking and optimization tools in the business. There are minimum requirements of 200 domains or $200 in revenue generated each month but we put a real emphasis on high quality traffic from generic names. Traffic quality is the key that gets one into SedoPro and offer a premium for that kind of traffic.


Q: db – At the official SedoPro website it states that you are guaranteed to increase your domain earnings by at least 10% more than with any other parking provider. Is this true? How exactly does this work?

A: TS – We do. We emphasize traffic quality when applying to SedoPro and we’re offering a premium for it.


Q: db - Fabulous is notorious for having the highest paying parking service for gambling traffic. Is SedoPro also offering this guarantee for this kind of traffic as well?

A: TS – Currently not, but Sedo’s Domain Parking is under constant development, so please check back soon.


Q: db – The SedoPro parking program sounds great but are there any stipulations within the TOS that one should be aware of? Rumors have been flying around that once you are entered into the program your names must remain within the program for a year before they can be removed? Can you clarify or expand upon this?

A: TS – No, this is not true. Entry into SedoPro allows one to use the parking service but you wouldn’t be bound to it.


Q: db – Now we know that the SedoPro program is available but are there another other programs that you offer for people with portfolios generating extreme amounts of traffic or is SedoPro the extent right now?

A: TS – We also have a registrar parking service but for individuals and companies SedoPro would be the most logical choice.


Q: db – Let’s get back to sales. Sedo sold over $25 million worth of domain names last year. This a substantial increase over the past couple years. What are your thoughts about this and do you see the number of dollars being spent on aftermarket domain names per year increasing in the years to come? If so, to what extent do you think this market is headed?

A: TS – In 2005 we put together over $25 Million worth of sales. More than $2 Million per month. It’s been our best year as a market to date and we expect sales to increase this year. It’s really becoming impossible to operate just about any business effectively without a strong web presence. At the same time it’s becoming harder and harder to find a quality brand name that isn’t already registered and in use. As a result businesses large and small as well as individuals looking for a place on the web are turning to the aftermarket in greater numbers.


Q: db – Last year Sedo sold Websites.com for $750,000, the highest reported sale at the time for 2005. Do you recall some of the other larger sales Sedo produced in 2005?

A: TS – There were some other blockbuster deals including Annuity.com for 600K and recycling.com for 300K.


Q: db - To what extent do Sedo’s domain name brokers go to, to sell a domain name? Do the brokers actively contact potential end users or do all of the buyers come to Sedo for the name? How exactly does Sedo handle this process?

A: TS – Yes, if a broker puts a domain name under an exclusive brokerage agreement the broker managing that domain sale will actively market the domain and contact prospective buyers to try and put a sale together.

We also offer the reverse service for buyers that need help acquiring a domain. For a nominal fee a buyer can have one of our professional brokers appraise the name they want and negotiate on their behalf.

Although exclusive brokerage agreements are important our domain brokerage service and our marketplace are responsible for the majority of our sales.


Q: db – What can one expect when listing their name at Sedo for sale in the featured section? This obviously greatly increases the amount of exposure their name gets but what kind of results have been achieved with people listing their names in this section? Have there been a lot of sales as a result of people listing their domain names there? If so, do you have any statistical information on its effectiveness that people should be aware of?

A: TS – We’ve compiled a lot of statistics for our showcased names and our research proves that showcased domains are FIVE times more likely to sell than domains that only appear in the standard search tables. It’s an extremely effective form of promotion that puts your name in front of millions of prospective buyers. Let me give you a few examples: freecellphone.com was in the showcase not 4 hours and received an offer for 50,000 Euros, eCasino.com was placed in the Showcase, and within 48 hours the owner had received 10 bids, including one that he negotiated to a $25,000 sale! Villa.info was showcased, promptly received 5 offers and sold for 1,250.


Q: db - For people interested in buying domain names from Sedo, there are brokers available to assist you in finding domain names of your interest, correct? Are there any minimum requirements for those looking to work directly with a broker to find the names that best suit them?

A: TS – Yes, as I mentioned above we have a domain acquisition service specifically designed for the buyer. There’s no requirements other than for the buyer to specify the name they’re interested in and a nominal fee. In return they will get the expertise of one of our professional brokers. The brokers will start out by appraising the domain to give themselves and the buyer an insight into its current market value. After that the broker normally have a discussion with the buyer about their budget and timeline for the acquisition. And then the broker will approach the owner of the domain and begin negotiations to secure it on behalf of their client.


Q: db – Let’s say somebody wanted to have Sedo’s brokers actively market their domain name to end users, is this an actual service that Sedo offers? Are there any minimum requirements or fees one must know about?

A: TS – There is an exclusive brokerage agreement that offers just such active marketing. Of course there are certain requirements. Names offered such an agreement are quality generic brands and or high traffic generating domain names.


Q: db – Isn’t it true that Sedo will contact owners of ultra premium domains on your behalf to try and put a deal in place. Sometimes people are more likely to be persuaded by industry leading companies like Sedo, that have a completely new level of credibility that may lead one to part with their premium names that may not be as active or aware of the current state of domain names and domain name values. Is this something that you agree with? What exactly is the service that you offer in regards to this? Is there is any fee or minimum requirement one should be aware of before attempting to take advantage of this great service?

A: TS – Consistent with the other question yes. For names offered an exclusive agreement one of Sedo’s brokers will manage the sale and actively market the name to prospective end users. There is no other fee than the standard 10% commission we take for all sales. The only requirement, as stated above, is that the name be of sufficient quality.


Q: db – Isn’t it a part of Sedo’s policy that all employees of Sedo are not allowed to actively participate in the buying of domain names? Can you please elaborate on this? It goes without saying that it is in the best interest of Sedo’s clients but can you further expand on the reasoning?

A: TS – Insider type trading is conflict of interest for Sedo. As a result all Sedo employees have been asked and have agreed not to invest in domains as a requirement to work at Sedo. If they have domain names prior to coming to Sedo, they can of course keep them ;-)


Q: db – For the most part Sedo is known to stay out of the negotiation process for the majority of their sales. You simply offer a fast and reputable looking solution for sellers complete with Escrow. Do you have any tips for domain name sellers to achieve the best results possible?

A: TS – Parking. I can’t understate the importance of parking


Q: db – You also offer a premium Escrow service in which you actually take control of both the money and the domain name before initiating the transfer. This is a safer alternative to traditional Escrow services that do not take complete control of the domain name for their clients. People still using the traditional Escrow services are still susceptible to be scammed. Can you please elaborate on this? What exactly are the fees involved for this service and are their any minimum requirements that one should be aware before attempting to use this service?

A: TS – Our escrow team is very experienced. They know how to safely execute a transfer between any two registrars out there and they are very vigilant of any possible scam so they will never release funds before they are certain that either we or the new owner has control of a domain. For domains that sell through our marketplace the normal 10% commission includes escrow. For those who’ve agreed to sell their domain outside our marketplace they can still use our escrow for a small 3% escrow fee.


Q: db – Sedo is one of the only companies offering IDN parking currently. How exactly is the system working out? Are you seeing high levels of traffic with the IDN’s? What do you think the future holds for the IDN’s and the IDN market?

A: TS – We support as many IDN domains as we can. IDNs are definitely in a growth period. As Internet use increases more and more people will naturally prefer to work in their own native language and we expect a lot of IDN names to eventually become quite popular and very important to our market.


Q: db – Sedo recently put on a domaining event in London. Was this Sedo’s first ever domaining event? How did the event turn out? Was anything major accomplished as a result of the event? Does Sedo have plans of putting on more domaining related events in the future? If so, do you know where and when the next event is going to be? How does one go about attending? Are their any fees or minimum requirements that one should be aware before attempting to go?

A: TS – It was a great opportunity to meet with many of our European clients, especially those who couldn’t make it over to the recent domain conference in Florida last October. Not only did we get a chance to present some of our new products and offer advice on everything from domain legal issues to portfolio management but we also got to hear some of our best clients most pressing concerns face to face. This kind of feedback is invaluable.


Q: db – There was a rumor floating around that Sedo was going to run a large campaign to try and gain more .US awareness in the US. Is this rumor true? If so, has this campaign started or when is it projected to start? Can you be more specific as to what the campaign will consist of?

A: TS – Well, we’ve written about it in our newsletter and we think that the current interest in .us names is a natural result of the market. .US is a remarkably underused tld considering its importance. As the competition for quality .coms goes up there’ll be even more interest in .us as an alternative and .us names are a good alternative at that. The recent sales of jews.us and voip.us for $25,000 as well as foods.us for 20,000 and industry.us for $17,000 reflect the value more and more people are seeing in that tld. If you look at the top reported sales for the newer tlds (.us, .biz and .info) you’ll see .us taking 5 of the top 10 spots, including the top 2. That’s no coincidence. We really expect the .us market to gain strength moving forward.

Domaining Blog has republished one of our newsletter articles about the .us market here: CLICK HERE


Q: db – What are your thoughts on ccTLD’s? Where do you see the future of the ccTLD market heading?

A: TS – As with the IDNs before we see a lot of growth within many ccTLDs markets. In some markets (e.g. many European and Asian markets, ccTLDs are already more important than .com) we expect that there’ll be more and more demand for local services and information offered through the Internet. ccTLDs play a big part in that because they define where information, products and services are coming from by their nature.


Q: db – What are your thoughts on the newer gTLD’s and sTLD’s? Where do you see these markets headed in the future?

A: TS – It’s really hard for a new gTLD or sTLD to become successful. Consumers are simply used to .com/.net/.org and the local ccTLDs. In our opinion, .info has done the best job out of all new TLDs and had the greatest success so far, but it’s still far away from being a universal TLD.


Q: db – What do you think of the current state of domaining as a whole and where do you see it heading in the future?

A: TS – We believe in the Secondary Market (Domain Trading). Ten years down the road, it will be much more important than the Primary Market (Domain Registrations)


Q: db – Do you have any tips to make one a better domainer?

A: TS – Read a lot of information, become an expert in a niche, invest in what you know and what you believe in. Of course, Sedo offers a lot of this type of advice in our New Section:

Domain Name News Reports

But reputable independent sources like the DNJ and Domaining Blog : ) should also be book marked.


Q: db – Do you have any advice for domainers to become better investors or speculators?

A: TS - Read a lot of information, study prices - e.g. on Sedo.com. And: think out of the box: e.g. invest abroad and do portfolio diversification like people do it in stocks. Trade ideas with peers. The forums are a great place to get information from a lot of people who started this industry.


Q: db – Does Sedo have anyone that they would like to thank for helping them get to where they are today?

A: TS – There are many people who helped Sedo along the way. However, if we have to name one person, Andreas Gauger, CEO of 1and1, the world’s largest web hosting company, is a terrific guy who runs a terrific web hosting company and believed in Sedo and our concept in a time when Internet was not a trendy place to invest.

We would like to thank Tim for taking the time to participate in this interview and we strongly suggest that everybody takes a deeper look at the services that Sedo has to offer as they truly are first-class.

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