Business.com for $400 Million? Craziness? Not so fast
The initial take on news that business.com is on the block for between $300 and $400 million, reported in today's Wall Street Journal, makes for a great headline. And the quick reaction is, Wow, I thought domain prices were crazy in the '90s. But hold on. Yes, the name is powerful. But my guess is business.com -- just as a name -- would fetch, dunno, $7 to $10 million.
That's because it's a powerful, generic name -- but not just one that people will type directly into their browsers, but one that could so easily be built into a business.
Nota minha (Julio): Business.com é um excelente exemplo de um nome poderoso, genérico - não apenas porque as pessoas podem procurá-lo intuitivamente - mas porque é um nome que pode ser transformado facilmente em um GRANDE NEGÓCIO.
Isso amplia o conceito de bons nomes serem intuitivos, de busca espontânea. Bons nomes são também os nomes que REPRESENTEM BEM um negócio, e que possam ter um alto nível de associação e lembrança.
The name does the marketing -- just like sex.com markets, well, you get the idea -- but Jake Winebaum and Sky Dayton have in fact built business.com into a business -- a well run, lean and mean Internet business that capitalizes on paid search advertising (something barely in existence when they bought the name in 1999).
The Journal says Business.com had 2007 “earnings before interest, taxes, depreciation and amortization of about $15 million,” which means the price tag is super rich. But that valuation isn't for the name. It's for the directory, the search capabilities, the lucrative business market. Om Malik, my former colleague, has a smart take on the business on his blog, as does ValleyWag, which explains how the valuation says more about the economics of the search economy, thanks to Google (GOOG) than about domain names themselves. On the other hand, as top domainer Frank Schilling points out on his blog, what business.com has done is really easy to duplicate -- so, he argues, the price is steep.
Meantime, if a deal goes down, Marc Ostrofsky, the guy who sold the name in 1999 and ended up with an undisclosed amount of stock in business.com, is one happy man. He won't say how much he'll get but it'll be a heck of a lot more than had he stuck with $7.5 million in cash. "I just learned about this this morning the Journal," Ostrofsky told me. "Needless to say, I'm going to make a lot of money if this happens. I'm having one great day." (An entertaining aside: My employer, Business2.0, had a chance to buy the name back in 1999, but wouldn't pay what Ostrofsky wanted.)