It Started With A Chat At A Cocktail Party, Overstock Buys O.Co For $350K
We told you a big announcement of a record setting sale for a .CO was coming this week, and it didn’t take long.
I can give you a little background on the sale.
I had a conversation with a representative of OverStock at at a cocktail party which was an official event at the ICANN meeting in Brussels about domain names during which I brought up that it might be a good idea for Overstock to acquire O.CO since Twitter, at the time, had just acquired T.CO
Well you could actually see the light bulb go off over the guys head just like in the cartoons.
It was just something he never considered but once he heard it, he was very interested.
We had about a 15 minute talk after which I asked if he would like me to make a mutual introduction to the .Co registry to him, and now a little over a month later there is a record setting $350K sale for a .CO domain.
I’m sure all of you are glad to see that this sale was not a trademark sale or a “hack” as many of you guessed response to our tease post of Sunday.
Many readers guessed it would be Pepsi.co or cis.co.
I have to give credit to one reader Katrina who was first to comment “is this single char .co ?”, and Brady who agreed “it has to be a single character domain”, nice job guys.
Beyond The .CO registry and Overstock the next happiest person on earth has to be Lonnie Borck whose group purchased E.CO for just $81K just a month ago. I only went as high as $25K in the auction
This record setting price is over 4x more than what Lonnie paid.
In response to our post about the sale, most commentators thought at the time the purchase was high priced and a waste of money.
I told you at the time Lonnie was a smart guy.
Here is what Overstock had to say about the acquisition:
“The O.CO domain presented us with an unprecedented opportunity to add a meaningful online presence that will enhance recognition for the “O” brand, align with current marketing initiatives, and make it easier for shoppers to find our products and services online,” said Overstock.com Chairman and CEO Patrick Byrne.”
“Dollar for dollar, it’s a homerun and well worth the investment because it reinforces among consumers that ‘O’ is synonymous with ‘Overstock’.”
We congratulate both the registry and Overstock.
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Thoughts: Could .Co ever take over .com?
If .CO was released in 1985 it might be the most popular extension. It is 2010.
It needs to leap over many other credible extensions to even be in the discussion.
This is the same process with any new TLD. I am sure people will say “But this one is different….”
The fact is the outcome is always the same. People who invest early, outside the ones that mysteriously end up with top tier domains through various mechanisms, end up losing most of their money.
Ask me about .CO a year from now when the drops happen…
Brad
Very Nice Sale… I hope you got some realtor fees with that sale
As far as E.co goes, it could be a good buy if something is done with it, or a buyer is found but I don’t think it is a slam dunk investment. I think with smart investing $81K could be much better spent in the current market buying generics that already have an established market.
O.co sold to an end user. What would the next buyer have paid? Probably nowhere near that. It is hard to extrapolate the value of E.co based on that sale.
Brad
Quite simply dot CO will never be better then dot COM, however when supply meets demand, there will be a huge popularity to it due to its closeness to the already popular dot COM.
I got screwed like everyone else with dot CM, however no one wants to miss their chance in case it strikes big.
This is going to be the same with dot CO. You will never know if this piece of TLD property will take off 10x better then any other freshly launched TLD.
Domain TLD’s are like stocks. People who get in early and ride through rough patches will most likely, one day, hopefully, strike gold!
Brad
“O.co sold to an end user. What would the next buyer have paid? Probably nowhere near that. It is hard to extrapolate the value of E.co based on that sale”
Why not?
I mean the next time E.CO is sold, if the owners want to sell it, it would be sold to an end user and why wouldn’t Exxon or a company in the ECO space have to pay as much or even more than Overstock did?
I think they would.
Overstock also has O.biz. How many other companies care about .BIZ?
You can’t really compare a one off sale and assume the value of something. $81K was paid at auction. That was reseller value.
If an end user wanted it bad enough they would have paid more at the auction as it was very well publicized. Will it sell for more in the future? Who knows.
Flowers.mobi sold for $200K to a smart person. How much is it worth now?
It is far to early to make any broad judgments about value IMO.
Brad
Brad
I don’t think you can compare a TLD that was technology based like .mobi to a ccTLD of a country of millions of people, they are just not the same animal.
I’m not making broad judgments on value, but if I owned E.Co my price just went up substantially for it today.
The point is that smart investors don’t always make smart investments.
Sure E.co has the potential to result in a big sale down the road. But $81K invested in domains with a market now is a better investment IMO.
In my opinion the only people who are going to make real money from .CO, or other new TLD are -
1.) The Registry itself. Just like any new registry does, flush with newbie money buying their lottery tickets.
2.) People who were able to game the system in some way and get the top tier domains without competition.
Brad
Oh, one more I forgot to add -
3.) The registrars. They just love any new TLD or trends. I am sure GoDaddy will have a blockbuster quarter from all the mediocre 3D regs.
Brad
Brad
Now here is something we can agree on:
“The point is that smart investors don’t always make smart investments. ”
That’s for sure, including myself.
Still If I bought a condo in a building a month ago for $100K and someone can along today and bought the unit next to me for $350K I would be pretty happy
It all sounds rather staged to me given the timing and the price, why would Overstock pay $350k for a deal that mainly benefits the registry?
I think it is not dissimilar to the techcrunch deal and e.co, in terms of their being other motivations at work.
Seems like of money is about to be lost by domain specuators, this is the extra bit of fuel need to get them to part with as much money as possible.
“Still If I bought a condo in a building a month ago for $100K and someone can along today and bought the unit next to me for $350K I would be pretty happy”
I understand the argument, but don’t view it the same way. The real estate market is different. It is far more liquid than the domain market.
Every domain is one of a kind. You can never really predict what another domain will sell for based on a previous sale. There are too many factors – the buyer, the use, the venue, the competition, etc.
Some domain types are more liquid than others. You know you can always get $100 for a quad LLLL.com, or $3K+ for any LLL.com, but those are established markets.
In my opinion it is just too early to make a real judgment of value on .CO at this point.
Brad
“I think it is not dissimilar to the techcrunch deal and e.co, in terms of their being other motivations at work.
Seems like of money is about to be lost by domain specuators, this is the extra bit of fuel need to get them to part with as much money as possible.”
Yeah, I agree there. The timing is rather suspect. Right before the first day of open registration. Gee, what a coincidence.
Brad
On a side note was the E.co deal every actually completed? E.co still goes to the page saying the domain is for auction. The auction ended June 10th and I don’t think the whois has changed either.
WHOIS –
Nombre del Dominio E.CO
ID del Dominio D740210-CO
Entidad responsable del Registrador RESTRICTED AND RESERVED NAMES .COINTERNET
ID del Registrador 672943168
URL (Servicio Registro) Registrador http://www.cointernet.com.co
Estado del Dominio serverTransferProhibited
Numero Identificación de Registrante COFOUNDERS
Nombre del Registrante .CO Founders program
Compañía/Organización de Registrante .CO Internet S.A.S.
Dirección del Registrante Calle 100# 8a-49 Torre B Oficina 507
Ciudad del Registrante Bogota
Código Postal del Registrante 00000
País de Registrante Colombia
Código de País del Registrador CO
Teléfono de Registrante +571.6169916
Correo electrónico del Registrante cofounders@cointernet.co
Brad
Brad
I know its a “done deal” maybe someone from the .Co registry can chime in and answer why the whois has not updated.
I think it was the automatic, intuitive appeal that people wanted and asked about .co way back when the internet started. Yes it’s 2010 but .co is still .co. never to replace .com but a nice alternative to stand on it’s own. Drawing constant comparisons between .com and .co is pretty impractical. Two different beasts essentially.
It comes down to what people want and how much they can pay. If someone finds .co desirable and wants to pay 10,000,000, for any number of reasons, why not? This is a very desirable extension. “co” has been around for hundreds of years in terms of business (unlike any other extension) and therefore it would be unfair to compare it to anything else. i personally have been waiting 15 years and my first instinct was that it was a good extension.
Mind you those of us that grew up into adulthood before the internet was around, learned the importance of “co” long before “com” and that just doesn’t go away no matter how much “.com” is thrown down your throat…you can’t just get rid of all the companies in the world that have a “co” in their company name.
Advertising.co for $150000? Looks a little cheap to me now…
Em
Hope Mr. Mann doesn’t see your post he will be raising his prices
Who is to say that .CO is going to be treated as meaning “company” by the big search engines anyway? What if they just index it like a usual ccTLD where it gets preference in the region but not broadly.
I would not want to advertise a .CO personally. IMO the average person, which no awareness, will just think you made a typo of .COM
Brad
@Brad – “It is far to early to make any broad judgments about value IMO.”
Values are fluid – the price acheived today IS todays valuation.
When e.co sold, the value for single (good) letter .co domains was c.$81k judged by the only benchmark we had. Now it can be said that they ought to be valued between $81k-$350k given we now have two points of reference; one a speculative buy and one an end user. The percentage difference between the two seems proportionate to me.
Anyone saying that these sales do not imply a value is simply ignoring the facts we have before us.
Ultimately, .co is a branding dream – I’m sure that overstock are cock-a-hoop over getting this name for $350k – they could probably find that amount down the back of their sofa. As far as passing the radio test goes, it doesn’t get much better – just say it to yourself OdotCo
If they hadn’t made the move to get it now, chances are they might never have been able to. Expect to see this domain popping up on billboards all over.
o.de? o.in? or o.co.uk? or o.co.jp? I don’t know for sure but I think only o.de would go for more money. With this sale, .co has already established itself as second or third on the list of cctlds.
You know with any extension or any investment I always ask myself what is the upside.
I had this discussion on my post on .US domains a couple of weeks ago:
http://www.thedomains.com/2010/07/07/if-a-us-domain-at-best-is-only-worth-1-of-a-com-and-25-of-a-ca-why-bother/
Now we know the upside of a .Co and the extension hasn’t even been launched yet
The vast majority of respectable ccTLD and gTLD do not allow one character domains, so you can’t make the comparison to an extension that doesn’t.
This was sold by the registry to an end user. I still fail how to see that is relevant to the average person.
Brad
Pepsi.co or Cis.co do have a meanings, while o.co or t.co seem completely useless
Pepsi.co is an obvious TM domain. It looks like the registry is holding it.
If that or another obvious TM domain was the first reported major sale I think it would have been a major black eye for the .CO registry.
Brad
On a side note I wonder what L.com domains would sell for if the registry every released them, or if one of the three that currently exist came up for sale (X.com / Q.com / Z.com).
The sky is the limit on those ones.
Brad
Brad,
That’s already not true. Type in “t co” into google search. You think Google is going to ignore one of twitter’s sites and just relegate it to the Colombian Google search? Once again business is not some fixed model…it is fluid and changing otherwise things go stale. Pretty unlikely Google won’t recognize big businesses with .co since Google makes all their money, or most of it, from big companies participating in their adwords. So if Big Companies want their .co to be indexed and optimized in worldwide google search, I’m pretty sure Google will accommodate. It is the big companies that do the dictating and not some arbitrary SEO cctld format that can be changed with a phonecall.
The value of .co is not whether Google recognizes “.co” as “company” but whether they recognize those companies that have a .co. The SEO element will also play a part. Obviously Twitter can afford the best optimizers so you will see their .co will rise in rankings along with all other big companies who have lots of money.
The conversation will go something like this because people generally like new things:
“hey, heard about .co?”
“no, you mean .com”
“no, .co is a new internet extension. Kind of like ‘company’, just a bit shorter, ya know?”
“interesting.”
“Yeah, and that name you wanted, you can get it in .co”
“yeah i wanted maria.com but instead I go stuck with maria.mobi. Maria.co sounds pretty good. Thanks for the tip.”
CO is the ccTLD of Colombia. They are just trying to market it as “Company”. I really don’t think it will catch on end user wise. But that remains to be seen.
I will say that they have done an excellent job marketing it and keeping .CO in the news, from the e.CO sale to the recent “well timed” o.CO sale.
I have seen this confidence in new extensions many times in the past.
I wish all the people fighting for the scraps at auction the best of luck.
Brad
Thanks for proving my point, Brad. Since the others are inaccessible, o.co is the only price determination indicator around and the rest would be just speculation. It’s nice to have a benchmark. So we do and perhaps that gives .co even more leverage since it is the buying public that makes the market prices and this is what we all are interested in, not domains that are sitting in a vault growing moss. I guess we’ll never know about o.co.uk in terms of real market value.
Brad
An L.Com $5M plus
Of all the possible companies it’s Overstock… sigh
I know enough
“CO is the ccTLD of Colombia. They are just trying to market it as “Company”. I really don’t think it will catch on end user wise.”
.TV and .Me haven’t done too bad in this direction either
The sale of o.CO proves what one specific end user is willing to pay for one specific domain from the registry directly. How that is relevant to other domains available to the average person?
When E.biz sold for $66K or whatever what did that mean for other .BIZ? Nothing.
Brad
.TV and .ME have not exactly been smash successes either. I have never seen more hype than with .CO
Best of luck to everyone tomorrow. I will be sitting this one out and sticking to domains that already have a market.
Brad
Regardless of how well dotCo does I can assure you of one thing – 95% of the new gTLDs will not do better.
” Regardless of how well dotCo does I can assure you of one thing – 95% of the new gTLDs will not do better. ”
I agree with that. This would be template for the best possible circumstances.
1.) Top .COM typo extension
2.) Marketing as “Company” meaning.
3.) Great marketing and promotion.
4.) One “well time” reported sale to an end user.
If this just doesn’t do great what chance do others have?
Brad
Brad,
You got any stock tips for me? LOL
To generalize from past results, when .mobi is an apple and .co is an orange, makes no sense. It is always the marketing that makes at least 60% of any new venture anyway. That’s how it has always been. In fact, with good marketing you can sell anything.
.com caught on more than .net 15 years ago because people would rather make money than go to network sites. And I would rather go to a .company site rather than a .mobile site because i want to make money or buy a product from a company.
How many words actually work with “.mobi” or “.tel”? This is why there are so few words for these extesions that have any monetary worth. What do flowers have to do with mobile (what the average person would understand anyway?)? The “company” aspect of .co is what makes it stand apart. Pepsi.co, clear. Maria.co, clear (self-employed person). flowers.co, clear (flower company). Playonline.co, clear (a company where you go to play games online). Plus any brand name will benefit from having .co after it. Bulls.co (basketball franchise corporation), etc, etc, etc.
I’m for anything that increases the value of single character domains.
Em John,
I have heard the sale pitch, and it strikes me as just that. A sales pitch.
If you are investing in .CO then best of luck.
Just remember the initial landrush auctions for new extensions is about the biggest waste of money. Those who don’t know history are doomed to repeat it.
Brad
I agree with David. gTLD or ccTLD? These are trade terms and most people are more interested in the name itself, .com .net .co etc.
Brad,
I never took any marketing or sales courses…LOL. You think .com never had a sales pitch? I don’t think it was spontaneous generation.
I have heard so many victims complain about what happened in the past. If you fell off your horse the last time, you learn why and get back on. To color the new world with a negative past result wouldn’t be just, IMO. On what reasonable basis would anyone buy a .mobi, especially at auction? If the hype can’t be backed up with solid reason, walk the other direction. i’m not foaming at the mouth over .co, but it has many virtues so I proceed with cautious optimism.
And I never said .co was the second coming, but it is what it is – a nice extension to look at and say.
I dont think it’s really important if o.co for 350k is a smart investment or not – overstock can spend that money and they are not going to resell it.
The question is if .co domains are going to do better than .me/,mobi/.info/.tv/.be/ .whatever…
Personally I think .net is the best alternative for a .com.
another point: most people will automatically type .com when see a .co domain.
.COM grew organically as the internet grew, which helped it out greatly. It became synonymous with the internet.
.TV is just as recognizable of an acronym in the world as .CO is and 10+ years later many people don’t even know it exists.
I just don’t seeing .CO living up to the hype.
Brad
Although it was meant as an April fool’s post, I predicted the trend and buyer in 2008
http://bit.ly/czxmNh
MHB,
Read your .us post. Rings true. Most people would say, “.ca”, Huh? The identity of the United States is “.com” therefore i think .us is not always an easy sell. Whereas i think someone who buys slots.co, which has it’s own unique identity, can look at a huge payday in the future.
Nothing to do with money grows “organically”, it is always to some degree pushed by people. The internet infrastructure was a miltary invention to begin with and only when there were “sales pitches”, in the beginning, could the internet and .com survive in the public sector. To some degree the .com grew organically but after the fact. You can be sure the growth occurred “organically” only after someone had to be sold on it’s worthiness and that the seed was expensive to buy.
@ Em John
The pump is on? hopefully it doesn’t end with you know what
No one talks much yet about the ambiguity of .co. I dont think the general public will “get it” as being representative of COmpany or COrporation. You hear “.co” and wonder what that means. This is why a huge marketing campaign was so necessary. To help create a connection in the mind of the consumer that ordinarily would not be there. Same with .ws which was marketed as “website”, and even moreso with .cc (no inherent meaning at all). .MOBI would have likely done better as .mobile.
Unless the extension delivers instant relevant meaning then it’s an uphill battle for the tld.
Alternatively, something like .music, .homes, or .real estate would produce instant consumer recognition. .co is too abstract. I can guarantee that tld relevance, logic, and clarity will becoming increasingly more important as the internet grows larger and larger.
.co is far from abstract. co has been around as long as the hills. They have done multiple marketing surveys about name recognition. “co” is ordinarily recognized by most people.
“I dont think the general public will “get it” as being representative of COmpany or COrporation.”
Me neither TBH
Wow, you must have one helluva sales pitch Mike
, $350,000 for a brand new domain with little meaning to most people, no traffic and no SEO benefits…..EEEK
Yes, I’m shocked
Congrats though, that’s an amazing sale, most domainers (including me) would be a very happy bunny getting one sale like that in a lifetime
btw Mike, eco.com has been going to a blank page for a very long time, a man of your resources/talent may want to make the owner a tempting offer perhaps?