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Television For Sale...The Domain, That Is
Rick Ellis, Staff Writer
Dan
Rick Ellis, Staff Writer
Source: http://www.nbc13.com/technology/6685418/detail.htmlSuddenly, it seems to be a good time to be in the business of selling domain names.
A web development company that promises to use it to build an adult social network has recently purchased the long-contested domain sex.com. While terms of the deal have not been publicly disclosed, some press reports have pegged the price as a mix of cash and stock worth at least $14 million.
While sex.com might be the most valuable domain on the Internet, many other common one-word domain names also have a potential value in the millions.
So what would the domain name Television.com bring in today's market?
Larry Namer and Mike O'Connor are hoping to find out, and while Television.com's history isn't as tangled as Sex.com's, it certainly is a cautionary tale in just how difficult it can be to make money online.
Television.com was originally registered in 1995 by Minnesota resident Mike O'Connor, a self-described "tech-geek turned business-leader type person." As he describes the process on his personal Web site, he registered televison.com (along with a number of other names) early in the history of the public Internet.
"Before the web happened, there was FTP and e-mail and Gopher. In those days, I was entranced by how much domain-names resembled the call letters I used to get for radio stations -- very cool way to "name" things. So, long before the domain-name land-rush, I got a handful of generic domain names. The list includes the site (haven.com), bar.com, grill.com, pub.com, place.com, shelter.com, cafes.com and a few that got sold; television.com, ing.com and company.com. Some of those last ones made me a buncha dough."
One of the names that haven't made him rich so far is Television.com.
O'Connor rejected a $50,000 offer from CNet in 1996, and in 1998 rejected a $1.1 million bid from an undisclosed bidder. But in 1999, he decided to enter into a deal with new media producer Steeplechase Media and Internet marketing firm MarketVision Direct to launch an interactive TV site at Television.com.
Namer, the largest shareholder of Steeplechase Media stock, said in an e-mail that O'Conner agreed to contribute the domain name in 1999 in exchange for a percentage of the new company.
Press reports at the time described the equity being split along the lines of 66.7 percent to Steeplechase Media, MarkeTVision, through its subsidiary MKTV.com, owned 17.8 percent and O'Connor reatained a 15.5 percent interest.
In a phone interview, O'Connor said that the reason he did a deal that involved no money upfront was twofold: one, he had already made a fair amount of money selling off other domains he had registered, and secondly, he believed in Namer's vision and the possibilities of the site.
"This is the classic case of a good decision and a bad outcome," explained O'Connor. "You don't get mad about bad outcomes. We made a great decision to go that direction. And if I was asked to make the same decision again, I would make it in a heartbeat."
Television.com officially launched in January 2000, but never quite grabbed the traction its principals expected. And then there was the problem of bandwidth costs.
In an e-mail exchange, Namer outlined some of the issues. "When we decided to build it out the Internet biz was booming with ad rates hovering around $25.00 CPM. By the time we got it built, the web bubble had burst and CPMs (cost per thousand banner impressions) sank to 25 cents. With costs at that time for streaming and bandwidth being incredibly high (compared to today's costs), we were getting eaten up by our own success. The more traffic we got, the more money we lost."
By the time the plug was pulled on the site in 2002, Namer said, they had spent about $2 million on the business.
O'Connor said that despite the challenges, that incarnation of Television.com "had access to some very slick technology from Microsoft, and things could have turned out differently. But then the technology crash of 2000 happened, and that was the bad outcome."
The domain has sat dormant ever since, with O'Connor retaining administrative control of the domain and ownership still split between the three parties.
"While Steeplechase doesn't operate any longer it still exists, as does MarketVision," said Namer. "So the ownership stays the same. I was the largest shareholder in Steeplechase, so I guess I'm the main person speaking for the domain and the plans."
And what are the plans for the domain? Namer says he is seeing some interest in Television.com, although he hasn't yet made a deal.
"Recently I have been getting offers (not necessarily qualified ones) in the millions," said Namer. "For whatever reason, the interest in the domain has heated up greatly in the past three months. We had held it for this time with the belief that it is one of the best domains on the planet and its value would be re-established with time. That turns out to be true, so we are glad we didn't fire sale it."
O'Conner said that after that project wound down, they continued to look at other options for the domain. "A lot of the things that were presented to us in early 2000s just weren't that interesting. But as an 'investor' in the company, I can afford to wait. The domain didn't cost me anything, so I haven't really lost anything other than time."
"Actually, it may still be a bit too early to crank up the next thing for Television.com," continued O'Connor. "We are beginning to see a few interesting companies and deals on the horizon, but we still might be a bit earlier for the market."
Steve Safran, who is both the managing editor of the TV industry blog Lost Remote and Director of Digital Media at NECN, said there are some interesting possibilities for the domain.
"Any IPTV (Internet Protocol TV) service would do well to scoop it up -- assuming the price was right. Itâs a valuable URL, but I bet the owners are asking for a very high price. If thatâs so, thatâs Bubble Thinking," said Safran. "If I suddenly owned television.com and had to make a business around it, I would build a network around it of open content. Think Google Video, only better organized. Make it THE place for IPTV."
Namer's also thinks that video would be the ideal solution for the site. " If ever there was a domain name that screamed "convergence," this is it."
O'Connor said that he thinks that all along, both he and Namer have been searching for a technology and a project that would change the way people interact with TV. "I don't think it makes sense to be another Google Video or another ad site," says O'Connor. "I think we are honor-bound to make our original investors whole. I think we need to look at advancing the Internet somehow, and advancing television somehow. But if we have to sell the domain to make the investors whole, then so be it. It's kind of like farming. Not all the seeds you plant end up growing."
In the meantime, both Namer and O'Connor continue to work on other projects.
In recent years, Namer attempted to launch the Reality Central TV channel, which folded after News Corp.'s Fox Reality Channel premiered in 2005. Currently, he is part of the management of the World Digital Media Group, a company which plans to launch an independent music TV channel in 2006.
As for O'Connor, his current project involves rolling out another one of his domains, corp.com. "Back when I was originally registering domain names, I got to thinking that someday this Internet thing might catch on. And if it did, then if you're Acme Corporation, you're in trouble. Because there is more than one Acme Corporation in the world, and they might already have the domain name you want."
O'Connor plans to offer companies the chance to purchase a sub-domain such as "acme.corp.com" and has signed a deal with a domain registrar to offer the option to its customers.
Dan
