Canadian media company buys Auctomatic for $5 million

If you've been around the Internet long enough, you're bound to see a business model or two come back around. The business of domain-name roll-ups--once hot in the dot-com boom--are the latest to re-emerge.

Communicate.com, a Canadian company that owns about 800 domain names including Perfume.com and Cricket.com, is expected to relaunch itself on Wednesday as Live Current Media, with plans to become a network of media and e-commerce sites. To buoy its relaunch, the company bought tech upstart Auctomatic for $5 million--paid with $2 million in cash and the rest in stock, according to company CEO Geoff Hampson. Auctomatic, a start-up fostered by Y Combinator, was also backed by former Google employees Chris Sacca and Paul Buchheit.

Domain name roll-ups are as old as the commercialization of the Internet. In the early days, companies would snap up tons of single-word domain names, aggregate their traffic (often including natural direct traffic to the URL) and try to create a massive property for advertising or e-commerce. (The founders of CNET, publisher of News.com, even bought a few of its own names, including TV.com and Kids.com.) But in the dot-com bust, many of those businesses fell by the wayside as the ad market shrank. Today, players like Demand Media are replicating the model by aggregating a raft of destination sites.

In 1994, the original founder of Communicate.com registered as many as 800 domain names, including Call.com, Brazil.com, and Vietnam. A public company in Canada on the over-the-counter market, Communicate didn't thrive financially from selling products or advertising on sites like Perfume.com, according to Hampson. So last year, he took over control of the company by investing about $1 million of his own money, with another $5 million from institutional investors.

Hampson believes that Live Current's business is different from the old model because Internet audiences and the technology for community Web sites are more mature. For example, Live Current plans to build a thriving community of cricket fans for the site Cricket.com with a fantasy-sports Facebook application.

"The environment has changed...There are a billion people who are passionate cricket fans, (and that's) an opportunity to create a site. The trick here is to create a different experience. The (service) will live where they live," he said.

Auctomatic, which was founded seven months ago by a couple of students from Oxford University, ties into the company because it builds applications for eBay power-sellers, e.g., tools that let sellers change pricing for all their products at once. Live Current aims to use those applications--and the technical talent behind Auctomatic--to build out its destination sites. It plans to launch its Cricket.com site in May to coincide with the start of the new Indian premiere league for the sport; and it aims to introduce a new Perfume.com e-commerce site by the end of the year.

Sacca, who may act as an adviser to the company, said that Live Current has an opportunity to create premium destinations that will eventually include Boxing.com and Call.com. "It's really about the individual properties," Sacca said.