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SCOTT AUSTIN'S THE WEEK IN VENTURE CAPITAL
What's in a domain name?
Commentary: Web start-ups scraping bottom of brand barrel
By Scott Austin, Dow Jones
Last Update: 5:35 PM ET Jun 25, 2007
JERSEY CITY, N.J. (MarketWatch) -- Internet start-ups seem to be having as much trouble acquiring names as they do venture financing.
Nowadays, these start-ups are built on the cheap, employing shoestring budgets by leasing inexpensive computer servers and using low-cost software. The last thing they want to spend big money on is a name. A Web identity is imperative, but these firms don't have tens of thousands of dollars to hire a naming specialist, to say nothing of the cost of acquiring a cybersquatted domain.
It's causing some strange names, and many companies feel compelled to explain their bizarre name choices.
Take, for instance, Tapatap Inc. This month the company raised $2.5 million to back a new Web site that lets users participate from a mobile device in hundreds of head-to-head photo contests like "Cutest Pet" or "Best '80s T-Shirt."
On its Web site, Tapatap takes more than 300 words rationalizing its name, while conceding a real motivation: "Finding a cool name that isn't being squatted on these days is nearly impossible! We must have searched at least a hundred different names that we liked only to find generic place holder pages, or worse, nothing at all. Of course, as soon as we showed interest, the domain owners instantly saw stratospheric value. We'd rather save our money for important things like dry erase markers and toilet paper."
'What the heck is that?'
Then there's a relatively new personal-finance site that lets users track their bank accounts and share finance tips and goals. Unnaturally, it's called Wesabe, and it last week raised $4 million in venture funding. As co-founder Jason Knight asks on the company's blog, "Wesabe -- what in the heck is that?"
He explains: "First, I should say, naming a startup is a special form of pain that I wouldn't inflict on anybody. I was inclined to name it Knight Industries, but my co-founder Marc didn't think that was a very good idea (you were right Marc). After months of brainstorming I came up with Wesabe which is based on the Spanish word 'tu sabes,' or 'you know.' Wesabe meant 'we know" and our tagline is 'together we know.' "
That message prompted people to post comments like this one on the blog: "I thought it was a derivative of that spicy stuff on the sushi. ... Or maybe you meant 'wesave (you money)' and mistyped!"
In essence, you could almost have a baby gurgle out a name. Of course, Googoo.com, Goo-goo.com, Gaga.com, Gaagaa.com, Googoogaga.com, Googoogaagaa.com and Goo-goo-ga-ga.com have all been taken.
Or a start-up could just as easily use the handy name generator at .iq0.com/startup.html. It randomly dreams up 100 possible names for a new start-up every time the page is refreshed -- plausible-sounding names, like eIntercorp, Lutegrity, Intiqua, Celercorp and Omnivaco.
The fact is, many Internet start-ups have viable technology but lack a good name. They have to settle for their 100th choice.
A quick look in VentureSource, a venture-capital database owned by Dow Jones & Co. unit VentureOne, shows 95 venture-backed Internet companies created since the start of last year. About half of those companies used made-up words as their names.
Names that need no introduction
That makes all the more interesting last week's news about two reincarnated Web sites, HealthCare.com and Education.com. The companies formed around a domain name and secured venture capital, a rare instance these days. HealthCare.com announced Tuesday at the Dow Jones Healthcare Innovations Conference that it had raised $6.1 million in venture money to develop a Web platform for health information. Last year its founders purchased the valuable domain name, which had bounced around but never really been capitalized on.
On Thursday, Education.com launched a one-stop online shop for education resources after starting with just a name: Bay Area venture-capital firms Azure Capital Partners and TeleSoft Partners acquired Knowledge Adventure from Vivendi Universal in 2004. Along with the education-software company came a roster of domain names in the education category -- including Education.com.
"The board looked at the broad list of domains and looked for the best way to utilize them," Azure Venture Partner David Limp told VentureWire. "The board knew Education.com was a strong domain. Should we sell it? Should we put up one of these arbitrage sites? When we started to get into it, the beginnings of the new Education.com were formed."
At the end of last year, Azure and TeleSoft invested $4.5 million in Education.com to create a site dedicated to empowering parents to help their children succeed in school. "It was very interesting to build a company around a domain name."
All this news came as The Wall Street Journal reported that entrepreneurs Jake Winebaum and Ky Dayton, who spent $7.5 million on domain name Business.com back in 1999, are shopping their company for up to $400 million.
For more information on VentureWire, click here. End of Story
Scott Austin is an assistant managing editor at Dow Jones who oversees VentureWire, a daily publication covering venture capital and start-up companies. Source
What's in a domain name?
Commentary: Web start-ups scraping bottom of brand barrel
By Scott Austin, Dow Jones
Last Update: 5:35 PM ET Jun 25, 2007
JERSEY CITY, N.J. (MarketWatch) -- Internet start-ups seem to be having as much trouble acquiring names as they do venture financing.
Nowadays, these start-ups are built on the cheap, employing shoestring budgets by leasing inexpensive computer servers and using low-cost software. The last thing they want to spend big money on is a name. A Web identity is imperative, but these firms don't have tens of thousands of dollars to hire a naming specialist, to say nothing of the cost of acquiring a cybersquatted domain.
It's causing some strange names, and many companies feel compelled to explain their bizarre name choices.
Take, for instance, Tapatap Inc. This month the company raised $2.5 million to back a new Web site that lets users participate from a mobile device in hundreds of head-to-head photo contests like "Cutest Pet" or "Best '80s T-Shirt."
On its Web site, Tapatap takes more than 300 words rationalizing its name, while conceding a real motivation: "Finding a cool name that isn't being squatted on these days is nearly impossible! We must have searched at least a hundred different names that we liked only to find generic place holder pages, or worse, nothing at all. Of course, as soon as we showed interest, the domain owners instantly saw stratospheric value. We'd rather save our money for important things like dry erase markers and toilet paper."
'What the heck is that?'
Then there's a relatively new personal-finance site that lets users track their bank accounts and share finance tips and goals. Unnaturally, it's called Wesabe, and it last week raised $4 million in venture funding. As co-founder Jason Knight asks on the company's blog, "Wesabe -- what in the heck is that?"
He explains: "First, I should say, naming a startup is a special form of pain that I wouldn't inflict on anybody. I was inclined to name it Knight Industries, but my co-founder Marc didn't think that was a very good idea (you were right Marc). After months of brainstorming I came up with Wesabe which is based on the Spanish word 'tu sabes,' or 'you know.' Wesabe meant 'we know" and our tagline is 'together we know.' "
That message prompted people to post comments like this one on the blog: "I thought it was a derivative of that spicy stuff on the sushi. ... Or maybe you meant 'wesave (you money)' and mistyped!"
In essence, you could almost have a baby gurgle out a name. Of course, Googoo.com, Goo-goo.com, Gaga.com, Gaagaa.com, Googoogaga.com, Googoogaagaa.com and Goo-goo-ga-ga.com have all been taken.
Or a start-up could just as easily use the handy name generator at .iq0.com/startup.html. It randomly dreams up 100 possible names for a new start-up every time the page is refreshed -- plausible-sounding names, like eIntercorp, Lutegrity, Intiqua, Celercorp and Omnivaco.
The fact is, many Internet start-ups have viable technology but lack a good name. They have to settle for their 100th choice.
A quick look in VentureSource, a venture-capital database owned by Dow Jones & Co. unit VentureOne, shows 95 venture-backed Internet companies created since the start of last year. About half of those companies used made-up words as their names.
Names that need no introduction
That makes all the more interesting last week's news about two reincarnated Web sites, HealthCare.com and Education.com. The companies formed around a domain name and secured venture capital, a rare instance these days. HealthCare.com announced Tuesday at the Dow Jones Healthcare Innovations Conference that it had raised $6.1 million in venture money to develop a Web platform for health information. Last year its founders purchased the valuable domain name, which had bounced around but never really been capitalized on.
On Thursday, Education.com launched a one-stop online shop for education resources after starting with just a name: Bay Area venture-capital firms Azure Capital Partners and TeleSoft Partners acquired Knowledge Adventure from Vivendi Universal in 2004. Along with the education-software company came a roster of domain names in the education category -- including Education.com.
"The board looked at the broad list of domains and looked for the best way to utilize them," Azure Venture Partner David Limp told VentureWire. "The board knew Education.com was a strong domain. Should we sell it? Should we put up one of these arbitrage sites? When we started to get into it, the beginnings of the new Education.com were formed."
At the end of last year, Azure and TeleSoft invested $4.5 million in Education.com to create a site dedicated to empowering parents to help their children succeed in school. "It was very interesting to build a company around a domain name."
All this news came as The Wall Street Journal reported that entrepreneurs Jake Winebaum and Ky Dayton, who spent $7.5 million on domain name Business.com back in 1999, are shopping their company for up to $400 million.
For more information on VentureWire, click here. End of Story
Scott Austin is an assistant managing editor at Dow Jones who oversees VentureWire, a daily publication covering venture capital and start-up companies. Source
