18th Feb 2015

AP Business

Domain Names: 21st Century Real Estate

By ADAM GOLDMAN

AP Business Writer

July 22, 2007, 4:39 PM EDT

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).