Hot property — Web domain names
- Story Highlights
- Boom times in the buying and selling of domain names
- Industry’s market value could reach $4 billion by 2010
- Sex.com sold for $12 million last year
- “Dot-com is king,” “Dot-net is worthless”
NEW YORK (AP) — Inside a midtown hotel, Larry
Fischer is on his cell phone with a financial backer as his partner Ari
Goldberger does quick research on a laptop computer.
They are
bidding furiously at this auction of Internet domain names, with hopes
of snagging megayachts.com. The duo won’t be deterred. They want this
name.
“$110,000, yes or no? Quick,” Fischer barks at Eli, the investor at the end of the phone.
Someone else makes a bid for $120,000. Fischer and Goldberger up the ante, and then again.
Going once, going twice … sold to Fischer and Goldberger for $150,000.
“You got it,” a smiling Fischer tells Eli. Mazel tovs are exchanged.
These
are boom times in an estimated $2 billion industry that involves the
buying and selling of domain names. When people type the generic names
into their Web browser’s address field, sites that generate
pay-per-click advertising revenue appear. Such “direct navigation”
bypasses search engines.
“This industry is like the wild, wild
West right now and people have no idea how fast it’s growing,” said
Jerry Nolte, managing partner of Domainer’s Magazine, a new trade
publication devoted to this little-known world.
Some believe the
industry’s market value could reach $4 billion by 2010 as people
continue to purchase approximately 90,000 names a day and the number of
domain registrars swells.
At the end of first quarter 2007, at
least 128 million domain names had been registered worldwide, a 31
percent increase over the previous year, according to VeriSign Inc.,
which runs some of the core domain name directories for the Internet.
“It’s
not about words,” said Monte Cahn, founder and CEO of Moniker.com, a
company that specializes in domain asset management and held the
Manhattan auction. “It’s like real estate. This industry is only about
a decade old. People looked at domain names as a commodity. It’s a
piece of real estate on the Web that can’t be replaced. It’s your stake
in the ground, your stake in the Internet.”
At the Manhattan
auction, Fischer and Goldberger snatched up four names for more than
$1.2 million and a fifth for a client, representing only a handful of
the names sold for a total of $12.4 million during both the live and
silent auction.
The auctions were held during a domain conference in June that attracts some of the biggest players in this niche business.
One
name — creditcheck.com — went for $3 million but paled in comparison
to the sale of sex.com, which sold for $12 million last year, according
to Cahn, who knew the site’s buyer and seller.
Fischer, 44, of Brooklyn, New York, and Goldberger, 46, of Cherry Hill, New Jersey, figured there was money to be made early.
Goldberger’s
entry into the business was unorthodox to say the least. In 1996, the
Hearst Corp. sued him, alleging trademark infringement after Goldberger
registered esqwire.com, which resembles one of the company’s magazines.
The
two sides eventually settled and Goldberger, a lawyer, was allowed to
keep the name. Word got out that Goldberger knew something about the
thorny legal issues involving Internet domain names and people began
approaching him for advice.
Goldberger’s fascination with the burgeoning industry was sealed.
“I
was an entrepreneur strapped into this suit-and-tie job,” Goldberger
said. “Kind of a square peg in a round whole and this lawsuit just kind
of changed everything for me.”
He eventually left the respected
Philadelphia law firm where he worked in 1997 and joined a small
startup in Manhattan called mail.com, which was buying up domain names.
Goldberger
began collaborating with Fischer in 2001, building their portfolio of
domain names. Together, they became a formidable yet quirky team
(imagine George Costanza and Jerry Seinfeld with the pioneering spirit
of Lewis and Clark).
Two years later, they created a company
called smartname.com, which they sold earlier this year. The company
took names and provided content and links for owners, getting a cut of
the advertising revenue. At one point, smartname.com represented 150
owners with about 150,000 domain names, generating 50 million unique
visitors a month.
Most the sites are lucrative for their
advertising dollars. For example, megayachts.com isn’t an actual
yachting site, but it contains numerous ads and links for real yacht
companies, boats and cruises. The owners of the site get paid each time
a viewer clicks on one of those links.
Goldberger and Fischer declined to say how much money they make from pay-per-click advertising.
Bob Parsons, CEO and founder of domain registration company GoDaddy.com, says this type of business is fairly straightforward.
“They
make their money in two ways,” Parsons said. “One way is through the
traffic they get and the other is the appreciation of the name.”
Parson
didn’t think there was anything wrong with the practice as long as
those involved weren’t using names trademarked by others.
“Domain
names are becoming 21st century real estate,” Parsons said. “Just
owning a domain name as an investment, I don’t see a problem with that.”
Anthony
Malutta, a lawyer who specializes in trademark law at a San Francisco
law firm, sees fewer trademark infringement cases thanks to improved
laws.
“Trademark law involving domain laws is much clearer and
much easier to understand,” he said. “It’s pretty clear that
registering a domain name that corresponds to somebody’s trademark is
actionable. As to generics, they’re just hoping to capture traffic.
You’re just counting on people typing in generic names instead of using
a search engine like Google.”
Malutta said domainers like
Goldberger and Fischer are not “gaming the system” which in his opinion
would mean registering domain names and then cybersquatting — driving
revenue off somebody else’s trademarked name like Coca-Cola.
Over
the years, Goldberger and Fischer have sharpened their formula for
acquiring domain names and developing the sites using a fairly simple
template, relying on research, savvy and plenty of instinct.
“You either know it or don’t by hearing the name,” Fischer says.
They
look for names that hit the “sweet spot” — short words that describe a
high-value product or services related to it. Words that allow them to
own a category such as bald.com and cardiology.com, two of the domain
names they bought at the auction.
To help figure out a word’s
potential value, they see how many hits it will produce using Google.
They also troll lists of names with domain registrations set to expire,
enabling them to get a jump on buying it.
They don’t bother with dot-nets or the others.
“Dot-com is king,” Goldberger said. “Dot-net is worthless.”
But
there’s a big divide between thinking of a good name and getting it.
There’s usually a chase, with Fischer trying to persuade owners to sell
the names after he locates the owners unless it’s up for auction.
“He’s
kind of like a rhinoceros,” Goldberger says about Fischer. “He chases
them up a tree and waits them out. He has patience and determination.
You got to be aggressive. It’s a tough game now. It’s like the gold
rush. The first guys did really well then it became more difficult.”
And
expensive. Five years ago, the duo could get a good name for $10,000.
Now the minimum is more like $100,000 — as the auction proved. The
cheapest name they bought at the auction was blogging.com for $135,000.
Other names sold for considerably less like irishwhiskey.com ($8,000)
and Jewishdeli.com ($9,000).
At the moment, Fischer, Goldberger
and Eli are sitting on their names. They’ve recently turned down
million-dollar offers for stocks.com and home.com.
But as white-hot as this business has been, it might not continue to mint millionaires.
“How
long will this model last?” Malutta asked. “It’s definitely a temporal
piece of real estate. As technology evolves, maybe direct navigation
will fall off the charts and there goes your property.”
Copyright 2007 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.
Find this article at:http://www.cnn.com/2007/TECH/biztech/07/23/domain.name.dealing.ap/index.html
© 2007 Cable News Network.
Internet business partners Ari Goldberger, left, and Larry Fischer, demonstrate
how they search and buy domain names on the Internet, an estimated $2 billion industry.
By Adam Goldman, Associated Press
NEW YORK — Inside a midtown hotel, Larry
Fischer is on his cellphone with a financial backer as his partner Ari
Goldberger does quick research on a laptop computer.
They are bidding furiously at this auction of
Internet domain names, with hopes of snagging megayachts.com. The duo
won’t be deterred. They want this name.
“$110,000, yes or no? Quick,” Fischer barks at Eli, the investor at the end of the phone.
Someone else makes a bid for $120,000. Fischer and Goldberger up the ante, and then again.
Going once, going twice … sold to Fischer and Goldberger for $150,000.
FIND MORE STORIES IN:
Manhattan |
Internet domain |
Ari |
By Bebeto Matthews, AP |
Internet business
“You got it,” a smiling Fischer tells Eli. Mazel tovs are exchanged.
These are boom times in an estimated $2 billion
industry that involves the buying and selling of domain names. When
people type the generic names into their Web browser’s address field,
sites that generate pay-per-click advertising revenue appear. Such
“direct navigation” bypasses search engines.
“This industry is like the wild, wild West right
now and people have no idea how fast it’s growing,” said Jerry Nolte,
managing partner of Domainer’s Magazine, a new trade publication
devoted to this little-known world.
Some believe the industry’s market value could
reach $4 billion by 2010 as people continue to purchase approximately
90,000 names a day and the number of domain registrars swells.
At the end of first quarter 2007, at least 128
million domain names had been registered worldwide, a 31% increase over
the previous year, according to VeriSign, which runs some of the core
domain name directories for the Internet.
“It’s not about words,” said Monte Cahn, founder
and CEO of Moniker.com, a company that specializes in domain asset
management and held the Manhattan auction. “It’s like real estate. This
industry is only about a decade old. People looked at domain names as a
commodity. It’s a piece of real estate on the Web that can’t be
replaced. It’s your stake in the ground, your stake in the Internet.”
At the Manhattan auction, Fischer and Goldberger
snatched up four names for more than $1.2 million and a fifth for a
client, representing only a handful of the names sold for a total of
$12.4 million during both the live and silent auction.
The auctions were held during a domain conference in June that attracts some of the biggest players in this niche business.
One name — creditcheck.com — went for $3 million
but paled in comparison to the sale of sex.com, which sold for $12
million last year, according to Cahn, who knew the site’s buyer and
seller.
Fischer, 44, of Brooklyn, N.Y., and Goldberger, 46, of Cherry Hill, N.J., figured there was money to be made early.
Goldberger’s entry into the business was
unorthodox to say the least. In 1996, the Hearst Corp. sued him,
alleging trademark infringement after Goldberger registered
esqwire.com, which resembles one of the company’s magazines.
The two sides eventually settled and Goldberger,
a lawyer, was allowed to keep the name. Word got out that Goldberger
knew something about the thorny legal issues involving Internet domain
names and people began approaching him for advice.
Goldberger’s fascination with the burgeoning industry was sealed.
“I was an entrepreneur strapped into this
suit-and-tie job,” Goldberger said. “Kind of a square peg in a round
whole and this lawsuit just kind of changed everything for me.”
He eventually left the respected Philadelphia
law firm where he worked in 1997 and joined a small start-up in
Manhattan called mail.com, which was buying up domain names.
Goldberger began collaborating with Fischer in
2001, building their portfolio of domain names. Together, they became a
formidable yet quirky team (imagine George Costanza and Jerry Seinfeld
with the pioneering spirit of Lewis and Clark).
Two years later, they created a company called
smartname.com, which they sold earlier this year. The company took
names and provided content and links for owners, getting a cut of the
advertising revenue. At one point, smartname.com represented 150 owners
with about 150,000 domain names, generating 50 million unique visitors
a month.
Most the sites are lucrative for their
advertising dollars. For example, megayachts.com isn’t an actual
yachting site, but it contains numerous ads and links for real yacht
companies, boats and cruises. The owners of the site get paid each time
a viewer clicks on one of those links.
Goldberger and Fischer declined to say how much money they make from pay-per-click advertising.
Bob Parsons, CEO and founder of domain registration company GoDaddy.com, says this type of business is fairly straightforward.
“They make their money in two ways,” Parsons
said. “One way is through the traffic they get and the other is the
appreciation of the name.”
Parson didn’t think there was anything wrong
with the practice as long as those involved weren’t using names
trademarked by others.
“Domain names are becoming 21st century real
estate,” Parsons said. “Just owning a domain name as an investment, I
don’t see a problem with that.”
Anthony Malutta, a lawyer who specializes in
trademark law at a San Francisco law firm, sees fewer trademark
infringement cases thanks to improved laws.
“Trademark law involving domain laws is much
clearer and much easier to understand,” he said. “It’s pretty clear
that registering a domain name that corresponds to somebody’s trademark
is actionable. As to generics, they’re just hoping to capture traffic.
You’re just counting on people typing in generic names instead of using
a search engine like Google.”
Malutta said domainers like Goldberger and
Fischer are not “gaming the system” which in his opinion would mean
registering domain names and then cybersquatting — driving revenue off
somebody else’s trademarked name like Coca-Cola.
Over the years, Goldberger and Fischer have
sharpened their formula for acquiring domain names and developing the
sites using a fairly simple template, relying on research, savvy and
plenty of instinct.
“You either know it or don’t by hearing the name,” Fischer says.
They look for names that hit the “sweet spot” —
short words that describe a high-value product or services related to
it. Words that allow them to own a category such as bald.com and
cardiology.com, two of the domain names they bought at the auction.
To help figure out a word’s potential value,
they see how many hits it will produce using Google. They also troll
lists of names with domain registrations set to expire, enabling them
to get a jump on buying it.
They don’t bother with dot-nets or the others.
“Dot-com is king,” Goldberger said. “Dot-net is worthless.”
But there’s a big divide between thinking of a
good name and getting it. There’s usually a chase, with Fischer trying
to persuade owners to sell the names after he locates the owners unless
it’s up for auction.
“He’s kind of like a rhinoceros,” Goldberger
says about Fischer. “He chases them up a tree and waits them out. He
has patience and determination. You got to be aggressive. It’s a tough
game now. It’s like the gold rush. The first guys did really well then
it became more difficult.”
And expensive. Five years ago, the duo could get
a good name for $10,000. Now the minimum is more like $100,000 — as the
auction proved. The cheapest name they bought at the auction was
blogging.com for $135,000. Other names sold for considerably less like
irishwhiskey.com ($8,000) and Jewishdeli.com ($9,000).
At the moment, Fischer, Goldberger and Eli are
sitting on their names. They’ve recently turned down million-dollar
offers for stocks.com and home.com.
But as white-hot as this business has been, it might not continue to mint millionaires.
“How long will this model last?” Malutta asked.
“It’s definitely a temporal piece of real estate. As technology
evolves, maybe direct navigation will fall off the charts and there
goes your property.”
Associated Press investigative researcher Randy Herschaft in New York contributed to this report.
Domain Names: 21st Century Real Estate
(NEW YORK)—Inside a midtown hotel, Larry Fischer is on his cell phone
with a financial backer as his partner Ari Goldberger does quick
research on a laptop computer. They are bidding furiously at this
auction of Internet domain names, with hopes of snagging
megayachts.com. The duo won’t be deterred. They want this name.
“$110,000, yes or no? Quick,” Fischer barks at Eli, the investor at the
end of the phone. Someone else makes a bid for $120,000. Fischer and
Goldberger up the ante, and then again. Going once, going twice …
sold to Fischer and Goldberger for $150,000. “You got it,” a smiling
Fischer tells Eli. Mazel tovs are exchanged.
These are boom times in an estimated $2 billion industry that involves
the buying and selling of domain names. When people type the generic
names into their Web browser’s address field, sites that generate
pay-per-click advertising revenue appear. Such “direct navigation”
bypasses search engines. “This industry is like the wild, wild West
right now and people have no idea how fast it’s growing,” said Jerry
Nolte, managing partner of Domainer’s Magazine, a new trade publication
devoted to this little-known world.
Some believe the industry’s market value could reach $4 billion by 2010
as people continue to purchase approximately 90,000 names a day and the
number of domain registrars swells.
At the end of first quarter 2007, at least 128 million domain names had
been registered worldwide, a 31 percent increase over the previous
year, according to VeriSign Inc., which runs some of the core domain
name directories for the Internet. “It’s not about words,” said Monte
Cahn, founder and CEO of Moniker.com, a company that specializes in
domain asset management and held the Manhattan auction. “It’s like real
estate. This industry is only about a decade old. People looked at
domain names as a commodity. It’s a piece of real estate on the Web
that can’t be replaced. It’s your stake in the ground, your stake in
the Internet.”
At the Manhattan auction, Fischer and Goldberger snatched up four names
for more than $1.2 million and a fifth for a client, representing only
a handful of the names sold for a total of $12.4 million during both
the live and silent auction. The auctions were held during a domain
conference in June that attracts some of the biggest players in this
niche business. One name — creditcheck.com — went for $3 million but
paled in comparison to the sale of sex.com, which sold for $12 million
last year, according to Cahn, who knew the site’s buyer and seller.
Fischer, 44, of Brooklyn, N.Y., and Goldberger, 46, of Cherry Hill,
N.J., figured there was money to be made early. Goldberger’s entry into
the business was unorthodox to say the least. In 1996, the Hearst Corp.
sued him, alleging trademark infringement after Goldberger registered
esqwire.com, which resembles one of the company’s magazines.
The two sides eventually settled and Goldberger, a lawyer, was allowed
to keep the name. Word got out that Goldberger knew something about the
thorny legal issues involving Internet domain names and people began
approaching him for advice. Goldberger’s fascination with the
burgeoning industry was sealed. “I was an entrepreneur strapped into
this suit-and-tie job,” Goldberger said. “Kind of a square peg in a
round whole and this lawsuit just kind of changed everything for me.”
He eventually left the respected Philadelphia law firm where he worked
in 1997 and joined a small startup in Manhattan called mail.com, which
was buying up domain names. Goldberger began collaborating with Fischer
in 2001, building their portfolio of domain names. Together, they
became a formidable yet quirky team (imagine George Costanza and Jerry
Seinfeld with the pioneering spirit of Lewis and Clark).
Two years later, they created a company called smartname.com, which
they sold earlier this year. The company took names and provided
content and links for owners, getting a cut of the advertising revenue.
At one point, smartname.com represented 150 owners with about 150,000
domain names, generating 50 million unique visitors a month.
Most the sites are lucrative for their advertising dollars. For
example, megayachts.com isn’t an actual yachting site, but it contains
numerous ads and links for real yacht companies, boats and cruises. The
owners of the site get paid each time a viewer clicks on one of those
links. Goldberger and Fischer declined to say how much money they make
from pay-per-click advertising.
Bob Parsons, CEO and founder of domain registration company
GoDaddy.com, says this type of business is fairly straightforward.
“They make their money in two ways,” Parsons said. “One way is through
the traffic they get and the other is the appreciation of the name.”
Parson didn’t think there was anything wrong with the practice as long
as those involved weren’t using names trademarked by others. “Domain
names are becoming 21st century real estate,” Parsons said. “Just
owning a domain name as an investment, I don’t see a problem with that.”
Anthony Malutta, a lawyer who specializes in trademark law at a San
Francisco law firm, sees fewer trademark infringement cases thanks to
improved laws. “Trademark law involving domain laws is much clearer and
much easier to understand,” he said. “It’s pretty clear that
registering a domain name that corresponds to somebody’s trademark is
actionable. As to generics, they’re just hoping to capture traffic.
You’re just counting on people typing in generic names instead of using
a search engine like Google.”
Malutta said domainers like Goldberger and Fischer are not “gaming the
system” which in his opinion would mean registering domain names and
then cybersquatting — driving revenue off somebody else’s trademarked
name like Coca-Cola. Over the years, Goldberger and Fischer have
sharpened their formula for acquiring domain names and developing the
sites using a fairly simple template, relying on research, savvy and
plenty of instinct. “You either know it or don’t by hearing the name,”
Fischer says.
They look for names that hit the “sweet spot” — short words that
describe a high-value product or services related to it. Words that
allow them to own a category such as bald.com and cardiology.com, two
of the domain names they bought at the auction. To help figure out a
word’s potential value, they see how many hits it will produce using
Google. They also troll lists of names with domain registrations set to
expire, enabling them to get a jump on buying it. They don’t bother
with dot-nets or the others. “Dot-com is king,” Goldberger said.
“Dot-net is worthless.”
But there’s a big divide between thinking of a good name and getting
it. There’s usually a chase, with Fischer trying to persuade owners to
sell the names after he locates the owners unless it’s up for auction.
“He’s kind of like a rhinoceros,” Goldberger says about Fischer. “He
chases them up a tree and waits them out. He has patience and
determination. You got to be aggressive. It’s a tough game now. It’s
like the gold rush. The first guys did really well then it became more
difficult.”
And expensive. Five years ago, the duo could get a good name for
$10,000. Now the minimum is more like $100,000 — as the auction proved.
The cheapest name they bought at the auction was blogging.com for
$135,000. Other names sold for considerably less like irishwhiskey.com
($8,000) and Jewishdeli.com ($9,000).
At the moment, Fischer, Goldberger and Eli are sitting on their names.
They’ve recently turned down million-dollar offers for stocks.com and
home.com. But as white-hot as this business has been, it might not
continue to mint millionaires. “How long will this model last?” Malutta
asked. “It’s definitely a temporal piece of real estate. As technology
evolves, maybe direct navigation will fall off the charts and there
goes your property.”
———
Associated Press investigative researcher Randy Herschaft in New York contributed to this report.
- Find this article at:
- http://www.time.com/time/business/article/0,8599,1645940,00.html
Copyright ? 2007 Time Inc. All rights reserved. Reproduction in whole or in part without permission is prohibited.
Associated Press
Domain Names: 21st Century Real Estate
By ADAM GOLDMAN
07.22.07,11:00 AM ET
NEW YORK -Inside a midtown hotel, Larry Fischer is on his cell phone with a financial backer as his partner Ari Goldberger does quick research on a laptop computer. They are bidding furiously at this auction of Internet domain names, with hopes of snagging megayachts.com. The duo won’t be deterred. They want this name.
“$110,000, yes or no? Quick,” Fischer barks at Eli, the investor at the end of the phone.
Someone else makes a bid for $120,000. Fischer and Goldberger up the ante, and then again.
Going once, going twice … sold to Fischer and Goldberger for $150,000.
“You got it,” a smiling Fischer tells Eli. Mazel tovs are exchanged.
These are boom times in an estimated $2 billion industry that involves the buying and selling of domain names. When people type the generic names into their Web browser’s address field, sites that generate pay-per-click advertising revenue appear. Such “direct navigation” bypasses search engines.
“This industry is like the wild, wild West right now and people have no idea how fast it’s growing,” said Jerry Nolte, managing partner of Domainer’s Magazine, a new trade publication devoted to this little-known world.
Some believe the industry’s market value could reach $4 billion by 2010 as people continue to purchase approximately 90,000 names a day and the number of domain registrars swells.
At the end of first quarter 2007, at least 128 million domain names had been registered worldwide, a 31 percent increase over the previous year, according to VeriSign Inc.(nasdaq:VRSN -news-people), which runs some of the core domain name directories for the Internet.
“It’s not about words,” said Monte Cahn, founder and CEO of Moniker.com, a company that specializes in domain asset management and held the Manhattan auction. “It’s like real estate. This industry is only about a decade old. People looked at domain names as a commodity. It’s a piece of real estate on the Web that can’t be replaced. It’s your stake
in the ground, your stake in the Internet.”
At the Manhattan auction, Fischer and Goldberger snatched up four names for more than $1.2 million and a fifth for a client, representing only a handful of the names sold for a total of $12.4 million during both the live and silent auction.
The auctions were held during a domain conference in June that attracts some of the biggest players in this niche business.
One name – creditcheck.com – went for $3 million but paled in comparison to the sale of sex.com, which sold for $12 million last year, according to Cahn, who knew the site’s buyer and seller.
Fischer, 44, of Brooklyn, N.Y., and Goldberger, 46, of Cherry Hill, N.J., figured there was money to be made early.
Goldberger’s entry into the business was unorthodox to say the least. In 1996, the Hearst Corp. sued him, alleging trademark infringement after Goldberger registered esqwire.com, which resembles one of the company’s magazines.
The two sides eventually settled and Goldberger, a lawyer, was allowed to keep the name. Word got out that Goldberger knew something about the thorny legal issues involving Internet domain names and people began approaching him for advice.
Goldberger’s fascination with the burgeoning industry was sealed.
“I was an entrepreneur strapped into this suit-and-tie job,” Goldberger said. “Kind of a square peg in a round whole and this lawsuit just kind of changed everything for me.”
He eventually left the respected Philadelphia law firm where he worked in 1997 and joined a small startup in Manhattan called mail.com, which was buying up domain names.
Goldberger began collaborating with Fischer in 2001, building their portfolio of domain names. Together, they became a formidable yet quirky team (imagine George Costanza and Jerry Seinfeld with the pioneering spirit of Lewis and Clark).
Two years later, they created a company called smartname.com, which they sold earlier this year. The company took names and provided content and links for owners, getting a cut of the advertising revenue. At one point, smartname.com represented 150 owners with about 150,000 domain names, generating 50 million unique visitors a month.
Most the sites are lucrative for their advertising dollars. For example, megayachts.com isn’t an actual yachting site, but it contains numerous ads and links for real yacht companies, boats and cruises. The owners of the site get paid each time a viewer clicks on one of those links.
Goldberger and Fischer declined to say how much money they make from pay-per-click advertising.
Bob Parsons, CEO and founder of domain registration company GoDaddy.com, says this type of business is fairly straightforward.
“They make their money in two ways,” Parsons said. “One way is through the traffic they get and the other is the appreciation of the name.”
Parson didn’t think there was anything wrong with the practice as long as those involved weren’t using names trademarked by others.
“Domain names are becoming 21st century real estate,” Parsons said. “Just owning a domain name as an investment, I don’t see a problem with that.”
Anthony Malutta, a lawyer who specializes in trademark law at a San Francisco law firm, sees fewer trademark infringement cases thanks to improved laws.
“Trademark law involving domain laws is much clearer and much easier to understand,” he said. “It’s pretty clear that registering a domain name that corresponds to somebody’s trademark is actionable. As to generics, they’re just hoping to capture traffic. You’re just counting on people typing in generic names instead of using
a search engine like Google (nasdaq: GOOG – news – people ).”
Malutta said domainers like Goldberger and Fischer are not “gaming the system” which in his opinion would mean registering domain names and then cybersquatting – driving revenue off somebody else’s trademarked name like Coca-Cola (nyse:KO –news-people).
Over the years, Goldberger and Fischer have sharpened their formula for acquiring domain names and developing the sites using a fairly simple template, relying on research, savvy and plenty of instinct.
“You either know it or don’t by hearing the name,” Fischer says.
They look for names that hit the “sweet spot” – short words that describe a high-value product or services related to it. Words that allow them to own a category such as bald.com and cardiology.com, two of the domain names they bought at the auction.
To help figure out a word’s potential value, they see how many hits it will produce using Google. They also troll lists of names with domain registrations set to expire, enabling them to get a jump on buying it.
They don’t bother with dot-nets or the others.
“Dot-com is king,” Goldberger said. “Dot-net is worthless.”
But there’s a big divide between thinking of a good name and getting it.There’s usually a chase, with Fischer trying to persuade owners to sell the names after he locates the owners unless it’s up for auction.
“He’s kind of like a rhinoceros,” Goldberger says about Fischer. “He chases them up a tree and waits them out. He has patience and determination. You got to be aggressive. It’s a tough game now. It’s like the gold rush. The first guys did really well then it became more difficult.”
And expensive. Five years ago, the duo could get a good name for $10,000.Now the minimum is more like $100,000 – as the auction proved. The cheapest name they bought at the auction was blogging.com for $135,000. Other names sold for considerably less like irishwhiskey.com ($8,000) and Jewishdeli.com ($9,000).
At the moment, Fischer, Goldberger and Eli are sitting on their names. They’ve recently turned down million-dollar offers for stocks.com and home.com.
But as white-hot as this business has been, it might not continue to mint millionaires.
“How long will this model last?” Malutta asked. “It’s definitely a temporal piece of real estate. As technology evolves, maybe direct navigation will fall off the charts and there goes your property.”
Associated Press investigative researcher Randy Herschaft in New York contributed to this report.
Copyright 2007 Associated Press. All rights reserved. This material
may not be published broadcast, rewritten, or redistributed
AP Business
Domain Names: 21st Century Real Estate
By ADAM GOLDMAN
AP Business Writer
July 22, 2007, 4:39 PM EDT
phone with a financial backer as his partner Ari Goldberger does quick
research on a laptop computer. They are bidding furiously at this
auction of Internet domain names, with hopes of snagging
megayachts.com. The duo won’t be deterred. They want this name.
“$110,000, yes or no? Quick,” Fischer barks at Eli, the investor at the end of the phone.
Someone else makes a bid for $120,000. Fischer and Goldberger up the ante, and then again.
Going once, going twice … sold to Fischer and Goldberger for $150,000.
“You got it,” a smiling Fischer tells Eli. Mazel tovs are exchanged.
These
are boom times in an estimated $2 billion industry that involves the
buying and selling of domain names. When people type the generic names
into their Web browser’s address field, sites that generate
pay-per-click advertising revenue appear. Such “direct navigation”
bypasses search engines.
“This industry is like the wild, wild
West right now and people have no idea how fast it’s growing,” said
Jerry Nolte, managing partner of Domainer’s Magazine, a new trade
publication devoted to this little-known world.
Some believe
the industry’s market value could reach $4 billion by 2010 as people
continue to purchase approximately 90,000 names a day and the number of
domain registrars swells.
At the end of first quarter 2007, at
least 128 million domain names had been registered worldwide, a 31
percent increase over the previous year, according to VeriSign Inc.,
which runs some of the core domain name directories for the Internet.
“It’s
not about words,” said Monte Cahn, founder and CEO of Moniker.com, a
company that specializes in domain asset management and held the
Manhattan auction. “It’s like real estate. This industry is only about
a decade old. People looked at domain names as a commodity. It’s a
piece of real estate on the Web that can’t be replaced. It’s your stake
in the ground, your stake in the Internet.”
At the Manhattan
auction, Fischer and Goldberger snatched up four names for more than
$1.2 million and a fifth for a client, representing only a handful of
the names sold for a total of $12.4 million during both the live and
silent auction.
The auctions were held during a domain conference in June that attracts some of the biggest players in this niche business.
One
name — creditcheck.com — went for $3 million but paled in comparison
to the sale of sex.com, which sold for $12 million last year, according
to Cahn, who knew the site’s buyer and seller.
Fischer, 44, of Brooklyn, N.Y., and Goldberger, 46, of Cherry Hill, N.J., figured there was money to be made early.
Goldberger’s
entry into the business was unorthodox to say the least. In 1996, the
Hearst Corp. sued him, alleging trademark infringement after Goldberger
registered esqwire.com, which resembles one of the company’s magazines.
The two sides eventually settled and Goldberger, a lawyer, was
allowed to keep the name. Word got out that Goldberger knew something
about the thorny legal issues involving Internet domain names and
people began approaching him for advice.
Goldberger’s fascination with the burgeoning industry was sealed.
“I
was an entrepreneur strapped into this suit-and-tie job,” Goldberger
said. “Kind of a square peg in a round whole and this lawsuit just kind
of changed everything for me.”
He eventually left the
respected Philadelphia law firm where he worked in 1997 and joined a
small startup in Manhattan called mail.com, which was buying up domain
names.
Goldberger began collaborating with Fischer in 2001,
building their portfolio of domain names. Together, they became a
formidable yet quirky team (imagine George Costanza and Jerry Seinfeld
with the pioneering spirit of Lewis and Clark).
$4 BIL IN ‘SITE’ FOR WEB NAMES
July 16, 2007
— Inside a Midtown hotel, Larry Fischer is on his cellphone with a
financial backer as his partner, Ari Goldberger, does quick research on
a laptop computer.
They are bidding furiously at this auction of
Internet domain names, with hopes of snagging megayachts.com. The duo
won’t be deterred. They want this name.
“$110,000, yes or no? Quick,” Fischer barks at Eli, the investor at the end of the phone.
Someone else makes a bid for $120,000. Fischer and Goldberger up the ante two times.
Going once, going twice . . . sold to Fischer and Goldberger for
$150,000. “You got it,” a smiling Fischer tells Eli. Mazel tovs are
exchanged. These are boom times in an estimated $2 billion industry
that involves the buying and selling of domain names and pay-per-click
advertising revenue for the owners of the names.
“This
industry is like the Wild, Wild West right now and people have no idea
how fast it’s growing,” said Jerry Nolte, managing partner of
Domainer’s Magazine.
Experts believe the industry’s market
value could reach $4 billion by 2010 as people continue to purchase
approximately 90,000 names a day. At the end of first quarter 2007, at
least 128 million domain names had been registered worldwide, a 31
percent increase over the previous year, according to industry-tracker
VeriSign.
One name – creditcheck.com – went for $3
million, but paled in comparison to the sale of sex.com, which sold for
$12 million last year.
2007 Associated Press. All rights reserved. This material may not be
published, broadcast, rewritten, or redistributed.
NEW YORK POST is a registered trademark of NYP Holdings, Inc. NYPOST.COM, NYPOSTONLINE.COM, and NEWYORKPOST.COM
are trademarks of NYP Holdings, Inc.
Copyright 2007 NYP Holdings, Inc. All rights reserved.
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