Medicare.com Was Acquired For $4.8M by eHealth Insurance (EHTH)
Looks like we got it wrong with our preview yesterday. We projected at least a $10M sale and thought the focus would be on the business behind Medicare.com, not so much on the URL. According to the earnings call report, it was $4.5M in cash and $300K in debt for a $4.8M total. eHealth is calling it a domain acquisition but there’s a site in place, it’s got ranking, traffic and revenue… It just looks like the revenue was dramatically less than what we expected.
eHealth (EHTH) Acquires Medicare.com For $4.8 Million
Again kudos to eHealth for making this acquisition. Even if it really is just a $4.8M domain acquisition this is going to have an incredible lifetime value and will help them further dominate the space. It is entirely possible that eHealth will be able to recoup their entire investment within less than one year according to some industry insiders. That still hasn’t stopped the the stock from getting beat up today, down nearly 12.25% to $36.74 a share, surprising considering that BofA reiterated their BUY rating on the stock with a target of $53.00.
I’d attribute (EHTH) drop in price to their earnings data and forecast, and it certainly isn’t reflective of the domain acquisition. Those are moat often simply ignored by analysts in the first place.
In the earnings call there were two different analysts who asked questions that would leave someone within the healthcare industry or a person who has in-depth knowledge of it, scratching their head. The questions asked seem to imply that maybe not all analysts covering the stock entirely know as much as they should about the healthcare industry. So today there’s probably some gut-check reactionary selling and that is driving the stock down.
Medicare.com Is Now One Of The Ten Most Expensive Domains Sold Of All Time (Public Transaction)
Because we like to be the voice of reason when we feel it is prudent, the domain community at large should not expect that this means it’s going to be boom time for healthcare related domains. Like we stated yesterday, for any online broker who is licensed, acquiring and then putting a URL into play isn’t a walk in the park. Most of the true premiums in medicare are owned by end users and while there are a scattering of EMD’s out there that are parked, everything that’s super premium is gone. Interestingly, Medicare.us is controlled by CMS, who operate Medicare.gov.
Healthcare is an insanely complicated industry and if the complexities of making the online part of the business work weren’t complicated enough, CMS and the government are there to make things even more difficult with regulations. Although their intentions are certainly to protect consumers, especially seniors.
This is the largest domain sale since Sex.com and Slots.com sold for $13 million and $5.5 million respectively. The sale also places Medicare.com into 8th position on the all time list of highest “public” domain sales right behind Clothes.com at $4.9 million.
Does this mean .Com is back? Could end users care less about the new GTLD domains? Let us know your thoughts in the comments section.