Prakhar Bindal, the 26-year-old CEO of Axsiom, can only get richer. After all, the value of domain names can only increase. The Mumbai-based entrepreneur’s first big break was buying the domain name Hangouts.net for $2 and selling it for $1,200, making a cool 600 times return. An IIM-C graduate, Prakhar started only three years ago and now has an asset base of over $10 million.

Like real estate prices, domain names keep increasing in value and a deal like 100.com (which sold for just under a million dollars) might soon come his way.

Prakhar has sold over 3,500 domain names, of which 850-plus are owned directly by Axsiom. “We have sold names from as low as just a few hundred dollars for simple domains to as high as six-figures for ultra-premium names. Our sweet spot is the $2,500-$5,000 level,” he says.

To sharpen his entrepreneurial skills, he recently spent a day with Kumar Mangalam Birla. “I was intrigued to know the story of how a 28-year-old successfully spearheaded a company in times of turbulence and led it to become a $40-billion conglomerate,” he adds, before sharing his success story with t2.

What got you interested in domain name trading?

My first job was in a hedge fund where I was working as a financial analyst. I was exploring the different avenues for alternative investments –– sectors that are relatively unknown in India but promise good returns. The search led to domain names, and I was intrigued by the idea of web names being bought and sold, like real estate, on the Internet.

This field gave birth to several online entrepreneurs, most famously Rick Schwartz, often called the Domain King, who sold Men.com for $1.3 million in late 2003, a huge profit from the $15,000 he paid for it in 1997. Gary Kremen sold Sex.com for over $12 million to Escom, an adult entertainment company. Mike Mann, one of the largest domain owners, bought over 10,000 domains in a single day.

The corporates promptly followed suit. Some of the best generic domain names were acquired by Fortune 500. Bank of America bought loans.com and CNN bought money.com, while Barnes & Noble acquired books.com and Nestle got meals.com. Venture-capital firms, too, decided to join the race. Highland Capital Partners plunked down more than $20 million on YesDirect, a holding company with 600,000 domain names.

PRAKHAR’S TRADE STORY

Bought: iWire.com, MangoShake.com, InvisibleArt.com, TheInternetOfThings.com, FunRummy.com
Sold: Flio.com, TestClub.com, OnlineRegistration.com, Lawyer123.com, MarketResearch.info

 

Is it true that you helped Walt Disney acquire premium names?

Yes, Walt Disney (USA) engaged us to procure a premium domain name in the childcare segment. We were able to secure it for them at a significantly discounted price. The name helped them to uniquely position themselves to expecting mothers.

Since then, our network has sold names to several Fortune 500 companies. In fact, we are currently in talks with India’s leading matrimony portals to negotiate the sale of the largest ever matrimony domains portfolio in the world. Hoping for some good news to come out of it!

Why do big or established companies buy domain names when they can go with another name?

They can’t actually. For example, if a new job portal is coming up, and they want to compete with Naukri.com, they have to have a very strong keyword like Job.com or Jobs.in, and so on. Otherwise they will get lost among hundreds of other job sites.

A good domain distinguishes your company and also conveys authority. Shaadi.com, another example, is India’s number one marriage portal. This is a killer domain name. PolicyBazaar.com is again another nice venture built on a great name.

TOP-SELLING DOMAIN NAMES

lInsurance.com: $35.6 million in 2010
lVacationRentals.com: $35 million in 2007
lSex.com: $14 million in 2010
lFb.com: $8.5 million (by Facebook) in 2010
lBeer.com: $7 million in 2004
liCloud.com: $6 million (by Apple) in 2011
lMedicare.com: $4.8 million in 2014
lWhisky.com: $3.1 million in 2013
Source: Compilation from websites

SNAP CHAT

Favourite e-tail sites: Amazon, Flipkart, eBay, BookMyShow, ClearTrip
Recent gadget buys: One Plus One mobile phone, Macbook Air, Kindle
Five must-read business fiction books: Liar’s Poker by Michael Lewis, The One Minute Manager by Kenneth Blanchard, Barbarians at the Gate by Bryan Burrough and John Helyar, The Devil’s Candy by Julie Salamon, Indecent Exposure by David McClintick

Do domain names automatically increase in value over time?

The value doesn’t really increase with time now, unless that keyword somehow becomes more popular. It used to be that way in the past though. Yes, an increasing amount of traffic will increase the value. Anything around 1,000-2,000 hits a day is good.

What should one look for in domain names? And how does one come up with a domain name’s sale price?

One must invest in generic names containing terms which people search. For example, CheapLaptops.com, BestDeals.com and so on. Also, they must check that the domain has good search volume. This means that many people search for keywords in a name. Further, a good pagerank or age also makes a name attractive.

For pricing, usually, there is no fixed metric. The value is as much as the buyer is willing to pay. But in general one can analyse the sales of domains with similar keywords and corroborate it with a tool like Estibot.com to set up an initial price from which the negotiations proceed.

In August you organised World Domain Day 2014 in Mumbai. What was the response?

It was fabulous! Over 300 people attended it. We are going ahead with the second edition in early 2015, taking the event to New Delhi. We are also considering making the event international, and taking it to China and the Middle East, to explore new markets.

You are an alumnus of IIM Calcutta. What difference has IIM-C made to your professional life?

In a professional sense, being from IIM-C has helped in two ways –– one, people take me seriously when they hear IIM entrepreneur! (Laughs) Second, IIM-C has given me access to a large distinguished alumni network, which would always be there for me.

On the individual front, IIM-C was a great experience. I greatly improved my analytical skills and learnt how to think about business strategy. Through hundreds of case studies, I could develop a more balanced perspective on business, knowing what works and what doesn’t.

What kind of career-focus did BITS Pilani bring for you?

BITS Pilani is the reason I am an entrepreneur. Had I not been there, I would probably have been a corporate marketer or consultant, the typical post-MBA career. BITS has a very unique culture that encourages students to take initiatives and excel in whatever sphere they want.

One of the instances I can give is the case of ACM (Association for Computing Machinery), world’s largest computer society. We decided to open their student chapter in our campus, while just in our second year of study. I got instant support from the computer science faculty and the chapter was born.

What are your fondest memories of Calcutta?

Durga Puja without doubt. It just turns Calcutta into another world. And also Christmas Eve on Park Street. I never knew Christmas was celebrated in such a big way here.

Where do you see yourself in the next five years?

Well, in five years I see myself being an integral part of the ecosystem that will bring India online. Ideally, I would be running one of the top three domain names and web infrastructure companies in India.

Mathures Paul
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