A lot of talk, blog posts and news articles have been done since the sale of Candy.com for $3 Million. I often wonder if these write ups are because of the quality of the domain name or because of the $3 Million dollar price tag paid for the domain.
Outside of the domain name industry, I would say it’s because of the Price Tag and not the quality of the domain!
I was reading a recent write up from eConsulancy.com which talked about the Candy.com sale and the writer wrote the likes and dislikes of the site launch, traffic and if a generic category defining domain name is worth millions.
Many of the things in the article were fair and it was interesting to read, but the writer compaired Candy.com’s traffic to CandyWarehouse.com’s traffic which I think is not a fair domain to pick to compare. IMO, no two domains / sites can be compared really for traffic because traffic Quality can be way different also.
So why would the writer compare Candy.com to CandyWarehouse.com? My guess would be because CandyWarehouse.com ranks #1 on Google for the search term candy.
Since the Candy.com site was only launched this month (July) there is no way it would have a chance to rank on page 1 of a search engine. With really two forms of traffic to any domain name (Direct Navigation or Search Engine) there is no doubt that search traffic plays a huge roll in a sites traffic.
For an example that I can give you hard numbers on, DotWeekly.com’s traffic is 79/12/8. 79% is from direct navigation, which can be from somebody typing in www.dotweekly.com into their address bar or visiting from a bookmark. A lot of search traffic becomes direct navigation after a first visit because of bookmarks. In fact, 74.9% of DotWeekly’s visitors bookmark the site.
12% comes from search engines with indexed pages from an article or page of DotWeekly.com . 8% of the traffic comes from links. Links can be from another site, Twitter, Forums etc.
Now one very important thing to keep in mind, DotWeekly also does not hold a #1 rank on Google for a very popular search term like domain or domain name either. So the percentages would be a bit different if it would.
CandyWarehouse.com Does currently with it’s #1 rank for the term candy but Candy.com is greatly gaining ground as it currently holds a Page 4 index for the term candy. At time of purchase, Candy.com did not rank likely in the top 100 pages in Google for the term candy due to the domain being "parked" most likely. What Candy.com did have was 15,000 unique visitors a month before the purchase, which very likely was nearly ALL direct navigation. Direct Navigation is also the most targeted traffic a site can get!
As pointed out in the eConsulancy.com article, Candy.com’s traffic has Doubled since it’s purchase according to Compete.com from 15K unique vistors per month to 30K and those were just the numbers for June when the Candy.com site wasn’t even launched yet.
So is / was Candy.com worth the $3 Million dollar purchase in my point of view? 100% YES!!!!
Traffic will continue to skyrocket. Not only because of Direct Navigation, but Candy.com will also keep ranking better and better in search engines due to it being a full site offering candy products! The current adwords (Google online advertising) for Candy.com will also help and likely is converting very nicely which is helped by the exact match candy term Candy.com. Will Candy.com pass CandyWarehouse.com and become the #1 rank on Google and likely other search engines like Yahoo and Bing? I would place a bet on it that it will!
CandyWarehouse.com also has been a full site offering candy products from about 1998 according to wayback. That’s about 11 years of a jump start to help it rank #1 on Google. So again, to compair traffic to the two domains is really not fair.
One thing not mentioned in the eConsulancy.com article, is the BRAND potential owning Candy.com! Nobody really heard of the Melville Candy Company before, but since they purchased Candy.com, a lot more have now and will continue to. Secondly, TRUST! Owning a category defining domain name adds something that is very hard to gain on the internet and that is trust. Also owning a category defining domain name allows you to "own the market" for the specific keyword. There is only one Candy.com! When you sell candy, it only makes sense to own Candy.com. This greatly allows your marketing messages to Stick, as it simply makes sense.
Jamie Parks
Excellent observations. Schwartz and Balestrieri are well positioned on this one and they know it.
The traffic is funneling in, the sales will be converted, incoming links will populate, the brand is already built. Candy.com ain’t going no where but up in value from here.
$10MIL+ sale in the future?? Pull up a chair, grab some candy and popcorn, and let’s see what happens!
Steve
Great post, direct nav rules. Even starting late in the game with the right generic keyword domain will propel a site up in the rankings. It’s only natural.:)
I wonder if they have an affiliate program?? Off to check.
Jamie Zoch
@Steve,
Thank you. Yes Candy.com offers an affiliate program but at posting it is not currently set up and is expected to take about a month. They will be using CJ.com.
Steve
@Jamie,
Maybe an army off affiliates will help propel them up the candy ladder. Thanks again, all the best.
Walt Wright
Jamie,
Your assessment of the long-term business value of Candy.com is right on. As legal counsel who designed,structured, documented and closed the deal, I can say the transaction is ground-breaking for the domain industry on a number of fronts. Seller and Buyer are men of clear vision and business savvy. This deal is structured to be win-win for both sides with execution, not chance, the variable.
Jamie Zoch
@Walt,
Thank you for stopping by. I wish I could of been a fly on the wall in the conversations in working out the deal! From what I heard Rick state, the legal work was very well done, so congrats on that Walt!
Bob
Why doesn’t anyone talk about the residual payments due to the domain seller when analyzing the merits of this deal? Read/disclose the full terms of the sale before pontificating on it. It’s well more than 3 million.
Jamie Zoch
@Bob,
I have wrote about the “other parts of the deal” http://www.dotweekly.com/2009/06/06/candy-com-sells-for-3-million-to-melville-candy/ and how important they are.