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100,000 Domains Sold for $164 Million

Posted by CmdrTaco on Wed Feb 23, 2005 09:15 AM
from the a-lotta-bread-for-typos-these-days dept.
The Almighty Buck
miller60 writes "Here's a news item that puts some hard data on the domain typo millionaires post from a couple weeks back. Marchex Inc. just paid $164 million to buy Name Development Ltd., an obscure company that displays pay-per-click keyword ads on 100,000 domains. It's not a stock swap, either, as $155 million of that was in cash. The seller reportedly built the portfolio by scarfing up expiring domains (including hardware-update.com, previously owned by Microsoft and linked from within the Windows 2000 OS) and replacing the content with pay-per-click ads."
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100,000 Domains Sold for $164 Million 50 Comments More /

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  • why pay 1640$ per domain? (Score:3, Interesting)

    by niall111 (449279) <programmerchris@gmail.com> on Wednesday February 23 2005, @09:18AM (#11754852) Homepage
    when you can buy them for 4.95$ a pop!?

  • Price not surprising at all. (Score:5, Informative)

    by bigtallmofo (695287) on Wednesday February 23 2005, @09:18AM (#11754856)
    Do a Google search for "web traffic" and look at all the AdWord advertisements. Almost all of them are sites that buy expired domain names or common misspellings of domain names, and for the low-low price of $2 they'll send thousands of people to your web site via such domains.

    Also, for anyone that has used the site... www.whatismyip.com was up for an EBay auction that ended at about 11:00 pm EST last night. Last I checked the bidding was $55,000. Not sure what it ultimately sold for.

    • Re:Price not surprising at all. (Score:5, Interesting)

      by bigtallmofo (695287) on Wednesday February 23 2005, @09:22AM (#11754901)
      Sorry to reply to myself... I just found the EBay auction site again:

      Whatismyip.com Auction [ebay.com]

      The final price? $386,100.00.

    • $257,000.00 (Score:3, Informative)

      by Mz6 (741941) *
      Just cheked eBay and the final bid ended up at $257,000. Not bad for a site doing 3GB/day of bandwidth.
      • wow - that many people dont know ifconfig/ipconfig, that know about ip addresses. im amazed.

        Its not exactly full of 1024x768 tiff images either.
        • Hey, Tardmo. You the stupid inexperinced one.

          Whatismyip.com and other similar sites are a great tool for any network admin that deals with lusers from other companies.

          I can't count how many times I have said "ok, what's the address of the mail server" and gotten something like "10.0.0.200" or "198.168.1.3". Sure, _I_ know what my machine IP is (most of the others on the network for that matter), and I know what my WAN IP is and the DMZ IPs of my servers. However, my customers dont... likewise even if t

      • There are some dynmaic dns utilities that automatically poll and screen scrape IP addresses off pages such as this. A client that I use polls every minute, cycling through about 15 different sites. This means that I myself am accounting for a hit every 15 mins to whatismyip.com. Yet, I never see the content on the page and rarely even think about it. Not exactly making the ideal situation for those bidding on the domain. Plus, add in the number of techies who aren't inclined to click on banner ads when they

    • What's horrible is that the guy who sold it was given the site as directed by the pervious owner's Will. He died and left it to this guy who sold it. Isn't that nice?

      • Re:Price not surprising at all. (Score:5, Insightful)

        by That's Unpossible! (722232) * on Wednesday February 23 2005, @09:45AM (#11755100)
        What's horrible is that the guy who sold it was given the site as directed by the pervious owner's Will. He died and left it to this guy who sold it. Isn't that nice?

        That is truly horrible.

        You know, when I die, I think I will put a clause in my will that requires my next of kin to pay the estate taxes themselves, and LIVE in my house, not sell it. I mean, the thought of a next of kin selling something they don't want to maintain is just horrible.
  • Visit the wrong domain and never click the ads.

    Bandwidth costs eat up profit margins.

    I've mistyped a few (slickdeals.com instead of .net, bensbargains.com instead of .net...) but as long as you don't click, there isn't any profit to be had.

    Of course, if you're like my fiancee and have trouble spelling any word... well, I can only hope those sites are limited to advertising only (and not phishing)...
  • Now I remember who the hell it was that stole my domain from me... 3 years ago I was late renewing by one single damned day, and lost my domain to that damned company... and ain't a damn thing I could do about it... although now that I was reminded of the name, I have this need for revenge... who's with me?
      • Not to be a bitch to a bitch, but sometimes e-mail addresses go defunct and one doesn't think to update the domain record because one doesn't realise that one needs that particular e-mail address to renew an expired domain. How many people have stopped using the e-mail address on their domain record because it was inundated with spam, or just registered with a temporary address? What happens if your e-mail address goes bad (i.e. a former free web email service decides to start charging, or an ISP goes under

  • Astonished (Score:2, Interesting)

    by mertner (90928)
    I'm just astonished that this kind of thing actually works. Does *anyone* ever click on any of the ads when you arrive at one of these hijacked places?

    For me, it's ctrl-W or backspace, every time.
    • If they wernt making money they wouldnt be doing it ...
    • I hate to admit it but I had never come across Ctrl+W as a command, so I tried it. I should have guessed it wouldn't be the shortcut for "give me a latte and a back rub please".

      Boy I have some off days!
    • People in "the know" like us dont click them, but when grandma or mom and dad type www.dotyahoo.com or www.yahho.com or whatever and see a search box, the really don't know to even think its illegitimate.
  • I work at an ISP. If all these domains point to the same class C or something I'll just block it at the router if it's purely advertising junk.
    Anyone know details? Thanks.
    - Cary
    --Fairfax Underground [fairfaxunderground.com]: Where Fairfax County comes out to play

  • Slashdot (Score:5, Funny)

    by prakslash (681585) on Wednesday February 23 2005, @09:27AM (#11754945)

    I wonder how much this will sell for? :-)

    http://slsahdot.org [slsahdot.org]

  • Not a new idea. (Score:4, Interesting)

    by radiotyler (819474) <tyler@NOSpAM.dappergeek.com> on Wednesday February 23 2005, @09:34AM (#11754996) Homepage
    If it walks and barks like a dog, it's a dog, no matter what you call it.

    Have you ever called 1-800-COL-LECT? Have you ever called 1-800-COL-MECT? Same thing. You get a "collect call long distance provider". Just not the one you wanted. Profiting off of other peoples' errors isn't exactly a new idea. This is just a variation on a theme.

    On a funny note, I originally heard about this 800 number scheme while reading Jenna Jameson's autobiography, "How to Make Love Like a Porn Star: A Cautionary Tale". Her husband apparentally made quite a bit of money in the mistyped 800 number business.

    • Re:Not a new idea. (Score:4, Insightful)

      by generic-man (33649) on Wednesday February 23 2005, @09:56AM (#11755200) Homepage Journal
      I grew up on Long Island, home of 1-800-FLOWERS (now 1-800-FLOWERS.com) (really), and I saw articles about the company getting pissed off at competitors who did things like this. Some competitors bought 1-800-FL0WERS (with a zero) and 1-800-FLOWER5 (with a 5).

      Ever wonder why 1-800-MATTRESS ends every commercial with people spelling their name melodically? It's because they don't own 1-800-MATRESS -- or at least they didn't years ago.
    • This reminds me of a 60 Minutes report I saw probably ten years ago. A *ahem* gentleman had setup a whole bunch of long distance companies, with names like "I don't care", "Anyone" or "It doesn't matter." So, back in the day when you dialed the operator to make a long distance collect call from a pay phone, they'd ask you for your LD carrier preference. You say "It doesn't matter" and *boom*! $10 a minute. Argghh!!


    • Back in the mid-nineties I worked at APple Technical Support here in Austin. We'd frequently get people on the phone who would say, "Did you know that if you dial 1-800-SOS-APPL with a zero in SOS you get a porn line?" I would usually tell people that was a service provided by Apple for people without internet connections.
  • The fine folks at BuyDomains.com still have the SlashDot.Net for sale, and "The quoted price will be at least $688 and may be over $10,000." Valid business model or what?

    (I intentionally left out all AhRefs, if you really want to see it, type away, I don't endorse domain stealers.)
  • I always hated the Ferenghi. Profit seeking bunch of idiots who'd step over their own mother for another bar of gold-pressed latinum. There's a reason they look like trolls, because that's what they are on the inside. Well, most of them anyway.

    What does this have to do with these guys? Because they're little better than the Ferenghi, and probably twice as ugly.

  • Almost like store placement (Score:5, Interesting)

    by jfried (122648) on Wednesday February 23 2005, @09:43AM (#11755077) Homepage Journal
    I was told a story that McDonalds spends millions on strategic restraunt locations, where it would see the most traffic, and the condition of the neighborhood and all kinds of good statistics. what ever it takes to find the perfect store location.

    Then burger king builds across the street.

  • hope they bought title insurance (Score:3, Insightful)

    by _|()|\| (159991) on Wednesday February 23 2005, @09:44AM (#11755099)
    You couldn't pay me to own a bunch of typo. domain names. It sounds like a thousand lawsuits waiting to happen.
    • It's not illegal. At least not by default.

      Where it becomes a problem is when you attempt to steal customers in this way. For example, you would be well within your right to put up a site called slashdot.info and have as the main page, "[ad] [ad] [ad] Sorry, you typed slashdot.info [ad] and you probably meant [ad] to type slashdot.org [ad] [ad] [ad]".

      You are providing a (questionably useful) service ad deriving advertising from it. Trademark law allows for this. When, on the other hand, you put up a site t
  • I wonder - do all of these domains go to the same set of IPs?

    Has anybody created a blacklist of those IPs?

    Has anybody created a blacklist of those domains?

    I'd apply a blocklist on my proxy just to deny these assholes any chance to get anything.

  • Fun with PPC adverts (Score:3, Interesting)

    by ajs318 (655362) <sd_resp2&earthshod,co,uk> on Wednesday February 23 2005, @09:52AM (#11755163)
    You can have tremendous fun with other people's pay-per-click adverts if you have an ADSL connection and spend time not using it every day {like when you're at work, or asleep}. All it takes is a list of open proxies and a list of known PPC adverts. Then you write a little script that goes around "clicking" on PPC adverts via various proxies. Of course, you don't have to do anything useful with the "data" you retrieve.

    One day, I might even write a screensaver that does exactly this.

  • How about a new Firefox extension (Score:5, Interesting)

    by thrillseeker (518224) on Wednesday February 23 2005, @10:20AM (#11755422)
    Anyone out there got an itch to write a useful extension for Firefox? One that catches any domain name that leechers (yes, they are leechers - they are capitalizing on someone's mistake, not their intent) use to take unfair advantage, and redirects it to the intended site. It'd need an easy "on/off" button so that you could visit the crap sites if you wanted.

    You'd be an internet hero.

    • It could detect when you were misspelling the domain name and suggest an appropriate replacement:

      You asked for slashdpt.org, but that domain is now owned by domain-snatching, spam-feeding liars that get rich because people like you can't spell/type.

      Perhaps you meant slashdot.org?

  • I think this passage from Wikipedia is fitting.. (Score:5, Insightful)

    by phuturephunk (617641) on Wednesday February 23 2005, @10:23AM (#11755455)
    About Warren Buffet: Buffett believes that much of the problem with the economies of the United States and other industrialized countries in recent years results from the proliferation of persons and organizations who produce nothing directly but are compensated based on the volume of business which they transact. He feels that most stock trades are recommended and made primarily to benefit the brokers rather than the investors and has stated that he feels that the world would benefit if each person had a lifetime maximum of twenty stock trades. He steadfastly refuses to split Berkshire Hathaway stock because the purpose of this would be to facilitate trading, which he has no desire to do. -Wikipedia entry on Warren Buffett Read that passage, then read it again..and when you're done reading it, read it one more time. Then you'll understand why some knucklehead will pay 160 million clams for absolutely nothing of real hard value.

  • Solutions (Score:3, Interesting)

    by Fëanáro (130986) on Wednesday February 23 2005, @11:53AM (#11756460)
    Users misspell domain names, causing actions they do not want...

    so, what technical solutions could we use for this problem?
    We could of course leave it as it is, a la survival of the fittest. Or we could try educating users not to mispell (fat chance). But are there other options?

    Credit card companies and banks have been dealing with somewhat similar probems, their solution usually involves checksum digits included in each number

    Could we apply a simmilar system to domain names?

    i.e advertise a www address as
    httX:/Y/zzz.com
    where httX tells the browser that the next character is a checksum, and Y is the one-digit checksum for "zzz.com"?

    users of older browsers would still be able to visit such a domain by leaving out the checksum

    Or, make a new top level domain, .check, where the second-level-domain has to be a checksum for the rest?
    http://zzz.Y.check

    this would require no changes in current software, but would require companies to use something else but .com in their domains.

    Any other ideas? What do you think?

  • Something is bogus about Marchex (Score:4, Informative)

    by Animats (122034) on Wednesday February 23 2005, @01:45PM (#11757758) Homepage
    This is all very strange. Marchex is a small company. In their last reporting quarter, they made only $144,000 on revenue of about $12 million. [sec.gov] Then, suddenly, despite their lousy track record, they did an IPO for $222 million and got onto the NASDAQ National Market System.

    With the revenue from this, they bought a collection of domain names of marginal value. It looks like they actually paid out only only $24.6 million on cash [sec.gov] upfront for Name Development. And even that goes into escrow for 18 months. Name Development's income for 2004 was $4.6 million.

    Name Development seems to be one guy operating out of the Virgin Islands who sold click-throughs to Yahoo:

    • Name Development currently earns 100% of its revenue through the outsourcing of its pay-per-click listings to one major provider, Yahoo!

    Marchex is the target of spyware/adware litigation:

    • On February 3, 2005, we received notice of a purported class action complaint entitled Pagniello v. Cool Web Search, Enhance Interactive, Inc., Marchex, Inc., FindWhat.com Inc., Google Inc., Yahoo/Overture Search Engine Co., Microsmarts, LLC, STOPzilla, Inc., PC Tools Pty Ltd., eBlocs.com, and Network Dynamics Corporation, which was filed in the United States District Court for the Northern District of Georgia on January 24, 2005. The complaint alleges that the defendants have exploited web browsers and reconfigured his and others' computers by installing code on their computers without their approval or knowledge and seeks injunctive relief and damages. Based on our initial review of the complaint, we believe that we have meritorious defenses to these claims and intend to contest them vigorously. However, since the litigation is in a preliminary stage and any litigation is inherently uncertain, it is not feasible at this time to predict how this matter will proceed, what the ultimate outcome will be or whether an unfavorable outcome could have a material adverse impact on our business.

    I don't see how this adds up to a company with a market cap of $761 million. This looks more like a dud dot-com.

    • Re:Aggghh the pain. (Score:4, Insightful)

      by NurseMaximum (663183) on Wednesday February 23 2005, @09:22AM (#11754902)
      It's like "legitimate?" spam ??

      This isn't spam - you request a page, you see an advert, it's not forced into your inbox.

      This is seeing an opportunity and using it, and they deserve a bit of success from that. Whether they deserve $164m worth of success is another matter.

      • Re:Aggghh the pain. (Score:4, Interesting)

        by StyroCupMan (815468) on Wednesday February 23 2005, @10:37AM (#11755576)
        I don't mind if I happen to type in the wrong page and see a bunch of useless ads. What irks me is when I am trying to do a search and all it returns are links to those ad pages.

      • This isn't spam - you request a page

        Even though I'm a dedicated spam fighter, I'd have to agree with respect to the domains. It really doesn't seem like spam to me by any accepted definition of the word. I am just amazed though that people will start clicking ads when they reach a site which is obviously the wrong one. How does an average person's thought process work?

        • I want to go read my localnewspaper.tld
        • clickety clickety localnewspapper.tld
        • Oh, this is obviously not the newspaper site
        • This strang

        • Re:Aggghh the pain. (Score:5, Insightful)

          by fuzzybunny (112938) on Wednesday February 23 2005, @09:59AM (#11755234) Homepage Journal
          What a lot of the "this isn't fair, this is criminal, this is predatory" posts seem to be predicated around is the mistaken belief that life is fair and that the stupid should have the same good life as the intelligent.

          This is not a life insurance-selling shill forcing his way into some poor ignorant grandma's house, putting pressure tactics on her to buy into scam xyz. Much like people caught up in ponzi scams, Tom Vu seminars, what have you, it is entirely up to the user what he sees. Remember that truism about lotteries being a tax on people who're bad at math? Well there you go.

          Nor are these guys pushing (for the most part) spyware, trojans, credit card theft, viruses, what-have-you, on unsuspecting PC users who've taken all reasonable precautions. I understand that your post is facetious (at least I hope it is) but referring to what I wrote above, the stupid, ignorant and lazy have exactly the same chances as everyone else. What they make of them is entirely up to them, including learning how to spell slsahdot.
          • A lot depends on how they use they typo page.
            If they are clearly the wrong page then I see no harm in it. If they try to look like the typo page then that is wrong.
            The best of them even put up a link to the correct page.

        • Re:Aggghh the pain. (Score:5, Insightful)

          by stupidfoo (836212) <.moc.oohay. .ta. .tnarongi-ooftcirts.> on Wednesday February 23 2005, @10:12AM (#11755366) Homepage
          Well, the number is actually spelled "googol" and not google (which was an accidental misspelling of googol) or googil. Googil is actually closer to the real spelling.
    • Same thing happened to my old domain, but luckily I was able to snag one close enough not to matter. Still, you have to wonder about all the asshats holding on to "DorothyLSmith.com" or whatever. I guess they're in it for the long haul. In a way, it's like Old West stakeholders -- just stake your claim and you get the property rights forever and ever, providing you keep paying your taxes (registration). Forget to make a payment, and all the jackals come out of the woodwork.

      They must be running some kin

    • Don't tell me about losing domains. In 1994, I registered several very good domains:

      snell.org (Me of course)
      cjs.com (Me again)
      eleet.com (I thought I was...)
      grateful.com (I was into the Grateful Dead)
      bikeworld.com (for my dad's co.)

      When NSI took over registrar duties for .com/.net/.org, they started charging $70/yr/domain. I was a poor college student, barely able to buy food (much less $350/yr of domains) so I let them expire--except for bikeworld.com (Dad paid for that one).

      Biggest. Mistake.
      • Internet domain names are a lot like commercial real estate. The value is based on traffic count much like the number of cars that pass by a retail shopping center. Real estate investors also use solid investment analysis when considering the purchase of properties which makes the sale of these domains interesting.

        It was noted on NetCraft that these domains get about 17 million unique visitors a month and at a $5.00 CPM (which is quite generous) that would be $85,000 a month ($1.02 million a year) in re

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