A Houston entrepreneur sold the Internet domain name business.com for a record $7,5 million in a deal announced recently that highlights the skyrocketing price tags of prime web addresses.
Marc Ostrofsky sold the name to eCompanies, the Santa Monica, California-based business incubator founded by former Disney Internet chief Jake Winebaum and Earthlink founder Sky Dayton, the company said.
"I am a technology wildcatter. I have made a lot of money in my 38 years of life doing that," Ostrofsky said in a telephone interview. "Technology wildcatting is about using your head and knowledge of the market to know where to drill."
The easy-to-remember name was worth the price because it will save eCompanies millions of dollars in advertising costs, Winebaum said.
"It is a choice piece of real estate and we have got a great service that we are building to go behind the brand," said Winebaum.
"If you look at what companies are spending to build a brand, I think it is a prudent investment." Winebaum said he plans to use the name for a new business devoted to helping other businesses tap into the world of electronic commerce.
Ostrofsky, who will become an advisor to the project, purchased the business.com name from a British Internet service provider three years ago for $150 000 (R925 000) - a price considered stratospheric at the time.
"Everyone thought I was a fool. People thought I was going out of my mind,'' Ostrofsky said in a telephone interview from Houston. "I had to just ignore them because I knew the market better than they did."
The $7,5 million price for business.com was the highest yet for a domain name, said Jeff Tinsley, Chief Executive of Greatdomains.com, an auction site for domain names.
The record may not last for long. Greatdomains recently became agent for the name America.com. A bid greater than $7,5 million already has been tendered and rejected by the seller, Tinsley said.
"I think that is just the beginning of what is going to come. These names are going to command a significant price," he said.
The cost of virtual real estate has been rising sharply as more companies seek a place on the Internet. In May, the name Wallstreet.com was sold for $1 million (R6.2 million) to a Venezuelan company. Last year, Compaq Computer Corp paid $3,35 million (R20,7 million) for the name AltaVista.com for its AltaVista search engine.
Source: Michael White, AP