Domain Games

September 15th, 2010 by Editor B

There’s a certain domain name of which I am part owner, the other owner being my friend in Missoula. This domain is a three-letter dot-com and as we all know there are a limited number of those, therefore they have a certain value. I’m not naming the domain here, but I think the perceptive reader can figure it out.

A friend helped us register this domain back in the early nineties, when it was free. Since then, we have used it for a legitimate purpose; we are not cybersquatters.

Over the years, as the registered owner, I have gotten frequent inquiries about selling the domain. Most of these inquiries are not credible. They most often in the form of a one-liner e-mail, “Hey, you wanna sell that?” They rarely offer a price; it’s more common for them to ask me, “How much you want for that?” I find that sort of approach annoying and unprofessional.

Three years ago, my partner and I talked about actively seeking to sell the domain. We share a sentimental attachment to the domain, and I use it daily, but it’s the content that matters more than the address. We could move that content to another domain. We are not making money off the domain, and if someone else has a plan to do that, why not sell it and reap a little profit?

So we discussed it and came up with a price that we both found acceptable. My partner did most of the work in terms of research and arranging for an auction. But for some reason which eludes me now, we never went through with it.

Fast-forward to the present. Monday morning I got a voicemail and an e-mail from a broker looking to buy the domain, and they actually named a price — $10,000. I responded politely that the domain was not for sale. Soon I got a follow-up offer which was five times the original. I still said no. The broker made a third offer of $60K and asked “what price it would take” for us to part with the domain. I named the price my partner and I had cooked up three years ago. Now the broker wanted to know why our price was so high. She revealed their “dedicated pricing team” had appraised the domain. I won’t mention the figure here but it was substantially higher than her best offer but also much lower than our asking price.

$60K may sound like a lot of money, but keep in mind the broker would take a cut, and then my partner and I would split it, and then we’d have to pay taxes on it. I’d be lucky to see $20K. That’s still a good chunk of change, I suppose, but a dollar is definitely not what it used to be. As a matter of comparison, a couple years ago I pissed away $10K on the stock market, our tax refund this year was $9K, and Xy recently took a $20K pay cut. More money is always welcome, but I know we could absorb $20K into our annual living expenses and not even really notice.

My partner’s financial situation may be different, of course, and I need to be sensitive to that. Still, I don’t regret saying no yesterday. When I told Xy I’d turned down an offer of $60K for the domain, her response was “One million dollars, and not a penny less! Tell ‘em your crazy wife said so!” I think if we sell the domain it should be on our terms, as a result of proactively seeking to sell it, rather than waiting for a deal to fall into our laps. That would seem the best way to assure we get a good price. But what do I know? I’m simply not motivated at this point to do the work necessary. And if we are unable to sell it for the price we desire, I am willing to accept that.

Coincidentally, as I was responding to these inquiries, I was also trying to untangle a confusing and messy situation regarding a domain name that belongs to a local civic organization. My head was abuzz with domain names and other contingencies and by the end of the day I was experiencing a bit of cognitive overload. But at least I got a good night’s sleep.

9 Responses to “Domain Games”

  1. Garvey Says:

    For some reason, my comment didn’t “take.” The gist was this: if you do sell it, spend the proceeds on something outrageous. Don’t let it dribble away.

  2. Sean Says:

    Your perspective makes a lot of sense. Also, for some businesses, 60k is like having one employee at their office for 1 year and firing them, yet still continuing to reap a reward off of that expense somehow. Or it could mean the cost of 1 diamond for a company that plans to sell thousands of them. I’ve got a lot of respect for the time put in your efforts. Unlike the stock market, it seems the valuation of your domain is taking a clear direction in more than one way. It’d be nice if a large enough sum came along to afford you the time on a project meaning a great deal to you, or even better, a project that allowed you to keep the domain and earn some money.

  3. Brenda Helverson Says:

    It might be cheaper for the company to bribe some Congressman to pass a bill to take the domain away from you and give it to them. In CorporateAmercia, private ownership of domain laws isn’t good for business. Aren’t you concerned that your utter selfishness might cost some company a dollar of profit? What’s wrong with you? Commie, maybe?

    Sorry, just practicing up for the Republican Congress next January.

  4. Avocado Tom Says:

    Glad to hear that you’ve got a number and that you’re thinking big.

  5. Lee Says:

    That is so XY! I love it! Selling the domain would almost equate to selling out on the principles of the show, and the lives yall have made. 60k doesn’t even come close imo.

  6. Joe Nickell Says:

    Just a clarification for the record, not that it matters to anyone but myself and Editor B….The last time we talked seriously about selling the domain, I had contacted a broker at one of the two primary companies that deal in these things. Our initial contact was positive — I’d say the guy even seemed eager to include us in one of their upcoming auction events — but then when I told him the price we were hoping to get and asked if he thought it was reasonable, I heard nothing back. I emailed him several more times over the course of months, but he never even paid me the courtesy of a “you’re fucking crazy” response.

    While I didn’t appreciate the fact that this more recent broker seemed incredulous at our asking price after she had initially contacted us with an offer that was a small fraction of her own company’s appraisal of the domain, she at least carried out a cordial conversation that included some substantial information about how it was appraised on her end — information I’d not previously uncovered and which was actually quite informative.

    There’s a part of me that wonders if we are fools to possibly leave five- or six-figure sums on the table; after all, I could foresee a future in which domains of any length aren’t really worth anything (if addressing systems change, for example). 20 years ago, nobody had ever heard of a “dot com.” 20 years from now, who knows? And in my family’s current financial position, I’m hardly able to say “it’s only money” with a straight face.

    But ultimately, this offer was too low anyway. I might be convinced to sell for something in the general vicinity of the current appraisal; but not at a fraction of it.

  7. PJ Says:

    I wanted to reiterate a point I made off the blog that I believe these domain brokers will approach you with no buyer. They have an interest in driving up the perceived value of the product. It’s a strange little niche with only a few players. I mean really, whose ‘appraisal’ is it? There’s no independent research and the historical results aren’t published…

  8. Joe Nickell Says:

    Actually PJ it appears, unless this is fabricated or incomplete, that the historical results are in fact published; see:
    http://www.namebio.com/

    I’m not disagreeing that this could have been a fake inquiry though. But if so I question why the inquirer would have lowballed us rather than go for the other end. But who knows? Some aspects of business negotiations completely mystify me.

  9. Sean Says:

    Another scam possibility is that once a $ is agreed on they require a second appraisal at which point they direct the victim to pay an appraiser of the buyer’s choosing, then never follow through with the purchase.

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