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It’s Saturday again!!!

Mint.com sold for $170 Million
The big news this week is the sale of Mint.com for $170 million. No, it was NOT the sale of a domain name. Neither was it the sale of a website. It was the sale of a business. Well, in this case, an ebusiness, as it operated solely online (I think).

I was jut really disappointed, to say the least to see a lot of domainers, including prominent bloggers trying to have the domain industry claim this Mint.com sale. This was not a domain sale. It was the sale of an ebusiness.

I even saw people trying to compare the sale to a typical domain sale, by mentioning that the sales price represents 17x the annual revenues of Mint.com ($10 million annual revenue).

Domains are normally priced based on parking revenues where the value is set at a X times monthly/yearly parking revenues.

But quite frankly, that is not how you sell a real business. Far from it.

It was only last week that I blogged about branding. If you do not understand the concept of branding, then you need to look no further than this Mint.com sale. Read the article at TechCrunch.com that is written by Aaron Patzer, the CEO and founder of Mint.com to learn how Mint.com was created and subsequently sold for $170 million in just TWO YEARS.

In my opinion the domain name Mint.com had nothing to do with the $170 million price tag. When I think of “mint”, 2 things come to mind: the place were money is manufactured (literally) and a type of sweet/candy (for example Polo Mint, the mint with the hole in it).

Mint only has 4 letters and passes the domain commercial test with flying colours. However the owner of the domain name would have been extremely lucky if he could sell the domain name by itself for $300,000 in today’s domain aftermarket. Just my opinion.

So how did they manage to get the $170 million price tag? BRANDING.

I have been preaching this gospel for too long now and I now hope people can finally appreciate why I’m so obsessed with branding.

Read the article and take a look at the Mint.com website. It has first class design, great user-experience and great connections to social networking media.

The site also has a very large user-base. I am sure the 36,000+ Facebook fans, 19,000+ Twitter followers and 1.5 million users (as per its Facebook page) played a great deal in the valuation process.

The website is obviously powered by robust technologies. However, in accountancy, you can only value Research and Development at cost (how much you actually spent for wages, experts etc.) and this cost is depreciated over time.

So, when you add up all of the Mint.com assets (at cost less any depreciation, plus any amortisation) I would assume that it would barely surpass $50 million. It is private company so I am just assuming. Don’t quote me. However in my opinion, even that figure is quite generous for the value of Mint.com’s assets at book value.

So that would mean that Intuit, the buyer could have possible spent an extra $120 million more than the book value to acquire Mint.com.

In accountancy, that $120 million is referred to as goodwill. In marketing, it is known as the value of the BRAND.

Now do you really see the true potential of branding?

Branding in this case is all about the potential. I would assume that the $10 million revenue per year played a very minute role in the negotiations. Why? The company is just 2 years old. So the owners could have easily said that they were busy building the brand, user-base and technologies, and weren’t too focused on the revenue side of things. Hence, the bulk of the negotiations would be centered on the potential of the BRAND.

I would give a more in-depth analysis, but I will keep the rest close to my chest. One thing is for sure; this is a brand that I will be studying as a true benchmark of what domain branding can achieve.

So while most domainers are throwing tantrums over declining PPC revenues and Google closing Adsense accounts without warning, they are in reality failing to see the mountains because they are too focused on the foothills. Hey, I am entitled to my opinion.

Big Announcements
I am hoping to make some major announcements next week. So stay tuned. Our newsletter subscribers will be the first to know. You can subscribe here.

Have a great weekend!!

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