This is a repost of an article that appeared on Story Stocks in 2007.

I subscribed to a newsletter from the Motley Fool not too long ago and received a copy of their Stocks 2007 publication. One of the companies highlighted, Marchex, purchased more than 100,000 domain names in 2006 for over $150 million. After this purchase, the company owned well over 200,000 unique URLs on the this world wide web.

Well, this got me to thinking, as there are only so many usable configurations of letters and numbers that might be suitable for such a thing. I wondered, how much can a portfolio of 200,000 domains be worth?

We’ll get to that in a moment. For the time being, Marchex has parked the vast majority of their sites and littered them with some pay-per-click ads. To be sure they’re not the most appealing destinations. But so what. They have 200,000 of them. Try lasvegasvacations.com or airbag.com to get an idea.

So, as is rather a lot like me, I wondered further: If Marchex paid $155 million for about 100,000 URLs and their current inventory numbers around 200,000 is it fair to reasonably infer that the entire portfolio could be currently valued at around $350 million? Seems reasonable. And the company holds $37 million in cash in its deposits. And the market cap of the entire enterprise? $325 Million.

So the land (so to speak) is worth $350 million and the $35 million in cash is good for, well, $35 million but the company as a whole is valued at $325 million? Plus there’s a 1% yield and revenue for 2006 clocked in at $127.8 million… Hmm… These numbers indicate there could be some room for upwards growth.

Consider my interest piqued in the Marchex story.

Disclosure: I do not own shares in any company mentioned.