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The Almighty Buck

100,000 Domains Sold for $164 Million 287

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

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  • 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!?
  • 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.
    • 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.
        • Some of us don't have many privileges on the computers we use at work/school.
        • Re:$257,000.00 (Score:3, Insightful)

          by jafiwam ( 310805 )
          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
      • Re:$257,000.00 (Score:3, Insightful)

        by XorNand ( 517466 )

        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?
      • 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.
        • If someone leaves you something in their will, they want you to have it.

          The guy trusted him to take care of it when he was gone. And he sold it. I think that's wrong.
        • 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.

          Unfeasible. I recently went through this, and living in it would have meant moving 400 miles (hey...no job), and taking over another $120,000 mortgage. Not happening. I hated selling it. But financially, there were few options.

        • I mean, the thought of a next of kin selling something they don't want to maintain is just horrible

          Not to sound very impolite, but: who cares? I mean, you're dead, so obviously you don't care anymore. So what if people sell what you owned in your life? If selling it makes them happy, then by all means let them be happy. Yes, for whatever reason. It's only material stuff anyways. Nothing you can take with you.

          And have you ever thought about the fact that your relatives might not even want to live in y
      • It's possible that the 2-3 hundred thousand usd that the sale generated is letting the will's executor pay off debts that were burdening the family, send a child in the family to college, whatever. You don't know the internal dynamics of the situation, so it's rather impolite to cast aspersions on the actions of a family in the wake of the death of a loved one.
    • if you are unhappy with whatismyip.com you can always use .org which is cleaner and simpler :)
  • by purduephotog ( 218304 ) <(moc.tibroni) (ta) (hcsrih)> on Wednesday February 23, 2005 @09:18AM (#11754863) Homepage Journal
    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)...
  • THANK YOU! (Score:2, Interesting)

    by Quasar1999 ( 520073 )
    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?
  • 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.
      • That might be more the fault of Yahoo looking like a random ad-host and less the fault of grandma or mom and dad.
      • Run a rewriting proxy with a blacklist of domain typos, that way attempts to access them get silently redirected to the correct page. I use squid and squirm, but something like Proxomitron [proxomitron.info] on a parent's/grandparent's windows box will do it.
  • 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
    • by mjfrazer ( 305120 ) on Wednesday February 23, 2005 @09:37AM (#11755036) Homepage
      careerinfo.com has address 83.138.187.18
      rentguide.com has address 83.138.187.18
      hardware-update.com has address 83.138.187.18

      So, i'd say yes...

    • by Anonymous Coward
      Are you selling internet service, or managed security networking service? Does maintaining "common carrier" status hold any meaning for you?

      If I'm buying access to the whole internet (and not to a managed content-provider) I want the whole internet, not your filtered version of it. I'm a big boy and I'll protect my network and hosts from Bad Things(c) without your blackbox filtering TYVM.
    • Better Idea, just write a program that constantly accesses the links and doesn't do anything. pay per click becomes useless due tot he number of false clicks generated. distribute program on slashdot to drive them into the red permanently.
  • 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@@@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.
      • 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).
        1-800-FLOWERS deserves whatever they get. Several years ago a friend of mine ordered flowers for his mom for mother's day. When the flowers arrived they included an AOL CD. My friend was pissed when he found out.
    • Re:Not a new idea. (Score:3, Interesting)

      by flabbergast ( 620919 )
      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!!
    • 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".

      No, but I often misdial 1-800-COL-KECT, but the phone company is apparently nice enough to connect me to 1-800-COL-LECT. I feel sorry for whoever has the number I misdialed; they must be losing business.


    • 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.
  • Look No Further (Score:2, Insightful)

    by Laurentiu ( 830504 )
    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.

    • Profit seeking bunch of idiots who'd step over their own mother for another bar of gold-pressed latinum.
      Only if she's undressed. If she's not, they'll forget all about profit and just moan about her lack of manners.
  • by jfried ( 122648 ) on Wednesday February 23, 2005 @09:43AM (#11755077) Homepage
    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.

  • 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.
  • I had the impression that the buy-a-domain-to-be-rich story was over, not only due to NASDAQ, but also because of google! I can't imagine anyone who wants to update its hardware typing www.hardware-update.com, instead of googling "hardware update" (and at least in the first 20 pages of results that I checked, hardware-update.com does not appear!). Personally I even type "apple" in the google bar sometimes, its easier than www.apple.com).

    Apparently domain sales prove me wrong.
    • "Personally I even type "apple" in the google bar sometimes, its easier than www.apple.com"

      Or you could save yourself even more time, by typing "apple" in the address bar and hitting "ctrl-enter"

      (inserts the http://www.|whatever-you-typed|.com for you)

      Works in IE and Firefox, not sure about the others.
    • Personally I even type "apple" in the google bar sometimes, its easier than www.apple.com

      I type "google" in the google bar...it's easier than typing google.com
    • A lot of people try to buy domains with keywords in them, because they're immediately attractive to search engines like Google. That's why buy-a-domain-to-be-rich still works, though not necessarily mistype - although I guess I can see how that would work; if I have a website I check often and I keep mistyping, that's atleast enough "hits" from me (even if it takes me seconds to ctrl-W outta there) to attract advertisers.

      Like someone mentioned, I can't believe anybody actually clicks on the ads! So how do
  • So, can we expect... (Score:2, Interesting)

    by http101 ( 522275 )
    ...yet another hotfix from Microsoft to remove the coded BSOD link to www.hardware-update.com since it contains ads, possible spyware, and not to mention Marchex Inc. might start charging Microsoft just for using their name in the OS they sell for $249.99 (US)?
  • I find it is almost impossible to buy a .com domain anymore, at least one that isn't just a random bunch of letters. And the problem is that almost everything you try will just end up going to a site with a load of ads and not pertaining to the subject matter of the domain name at all. Maybe there should be a rule against this... buying a domain JUST to put up ads should be illegal.

    But I suppose when one is googling, the easiest thing to do to find good results is to NOT click on .com links, instead go

  • 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?
    • Something that would convert what you type to something else you've specified in a list. It wouldn't be populated by default initially, since the main objection would be that you can't really assume for everyone, but lists would pop up on web sites, and those could be used rather than populating from scratch. Like adblock.

      Also like adblock, it would support regular expressions. The first thing I would add to my list is conversion of a final .co to .com . That's a common typo for me. Hasn't resulted i

  • 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.
  • This is why you trademark your domain name. Using a mark that's so similar to yours that it's just a typo is infringement, if the typo domain is marketing to the same market. Even if it isn't, which is usually the case with these typo domains, it can be easier to get them to cease & desist, and move on to cheaper prey to vulture.
  • 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?
  • 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.

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