June 4, 1997 2:05 PM PDT
Domain name fetches record price
A Texas-based company has just purchased the domain name "business.com" for $150,000, a figure that appears to dwarf the selling price of any previous Internet address. The deal was announced today by idNames.com, the company that brokered the sale.
With companies rushing to buy up pieces of virtual real estate, the market for Internet domain names has become as wildly unpredictable as the art market in the 1980s. Domain names based on ordinary, easy-to-remember words, such as "tv.com" and "internet.com," fetch astronomical sums considering their original owners paid nothing or next to nothing to register them.
For example: Last year, the publishers of this site, CNET: The Computer Network, paid $15,000 for "tv.com." Before buying that address, however, CNET tentatively offered Mike O'Connor, cofounder of Internet access company Gofast.net, $50,000 for a similar domain name, "television.com."
O'Connor rejected the offer, thinking he could get more for the address. But new buyers never materialized. "I'm the dumbest guy on the planet for turning down that deal," he said. "That's why friends pour beer over my head and call me a nitwit."
What compels someone to buy a domain name for the cost of a decent one-bedroom condominium in San Francisco?
Pinkard "Pinky" Brand, vice president of idNames.com, declined to say who the buyer of "business.com" was, though he did say that the seller, Business Systems International, retains the rights to the domain name for the next four months.
Other sites say that a good Internet address can be key to drawing traffic to a Web site. CNET has been a strong advocate of simple, descriptive domains, snatching up names like "news.com" and "radio.com" for high prices.
"Domain names that are simple and easy to spell are much easier to market," said Shelby Bonnie, chief operating officer and chief financial officer of CNET.
So-called second-level domain names--the "news" in "news.com"--are doled out by Network Solutions for all addresses with the desirable ".com" commercial ending. Those who were smart or lucky enough to register domains with ordinary words in them are free to sell them on the open market, though they can run into legal trouble if they try to sell a domain based on a registered trademark--"mcdonalds.com," for example.
According to idName.com's Brand, there is no hard-and-fast rule for determining how much a domain name is worth. Furthermore, he said, a nice name doesn't necessarily guarantee a site's popularity.