Are generic names dead?

[mole]

Sports.com calls it a day

http://media.guardian.co.uk/newmedia/story/0,7496,725672,00.html

Very sad.

 

I would have though its more a case of a great name not being able to save a bad business.

 

[mole]

I agree. The learning is that vanity names like sports.com and pets.com and garden.com used to open doors to private investors and VCs like an Ali Baba Open Sesame - no more today, investors are dogeared weary.

Buy a name for a fortune, add in another fortune lost in maintaining the online business.

Which is why I maintain that media.com is only worth $10k, it carries the burden of meeting huge expectations that comes with the name - expectations that will only fail.

 

If you have a good business model, a good domain will be nothing but a benefit to it. If the price paid is a burden, then that boils down to bad management moreso than the name itself having any detrimental impact.

But as snoop says, a good domain can't counter balance uncontrolled cash burn.

 

[mole]

Exactly my point safe, bad business models spoil good names. The overall imagery value of good names get mired with all these dotcom troubles. A good name does not guarantee success, or a ticket to success. In 1998, the opposite view was exactly what buyers had, thus the bloated sums paid for some names.

It could have been a .com, a .net or a .org for all simple reasons. It happened that .com took the brunt of the downfall. Very sad.

 

Its true that some companies seemed to have pinned their hopes to having a good name (maybe as an IPO hook) - but the sums paid for the names usually pale into insignificance when compared to excessive wage costs and premises etc.

Cash burn kills companies, not domain purchases.

I'm glad the market it maturing a little and people are purchasing their domains for more solid commercial reasons rather than blind hope and despite the visible failures it seems corporates still understand the benefits of and covet .com

 

[mole]

I agree fully with you, safe. Its now time to tie in business models (low cash burn is preferred) with domain sales. There is still big bucks to be made on the internet identity front, what saddens me is that people still continue to parlay names on its own for sale, without rationale and without revenue generating ideas.

In the past 2 years, I've seen my industry move to value-added propositions not as an option, but a means to stay afloat.

It's time we move domain selling away from "look, what a sexy name I have, and it's generic too!" to "here is how a name like this can make you tons of money". We want big returns, and today, value-adding domain names seem to be the only option to get what we want without sad compromise.

I know. It worked well for my company. We never saw a recession

 

[FineE]

A failed website business can leave debts and investement losses behind in the hundreds of millions of dollars.

So selling a prime dot com domain in the resulting bankruptcy (usually one of the few assets left) for say $500,000 or even $5,000,000 will give the creditors a few cents on the dollar if at all.

Generic names are far from dead. They simply cannot be expected to rescue multimillion dollar losses.

 

[mole]

Originally posted by FineE
So selling a prime dot com domain in the resulting bankruptcy (usually one of the few assets left) for say $500,000 or even $5,000,000 will give the creditors a few cents on the dollar if at all.

Anybody remember how much Pets.com sold to PetsMart?

 

[dotsofdomains]

The fanciful and arbritray names used as domains will, because of their greater trademark potential, have the most upside in the long term, but only so fas as they can be developed in concert with the goods and/or services associated with the name.

Generic terms or, more commonly today, pairs of generic terms will still be sought out, but because only the mega business can contribute the money necessary to truly associate a generic word mark with its company identity, the big payoffs will be few and the return less than in the gold rush days of the net.

That said, established businesses like having generic names to simply point to their "brandname" dot-com servers and they will pay for the right ones. Witness that book.com and books.com both point to barnesandnoble.com. BN spends no money promoting book.com or books.com as their domains, but is happy to get the traffic that such ownership may (and most certainly does) provide.

 

Originally posted by mole


Anybody remember how much Pets.com sold to PetsMart?

$375,000

Here's the link, from BusinessWeek:

http://www.businessweek.com/magazine/content/01_20/b3732716.htm

Here's the quote from the article:

"The price tags on these domain names might look high, but to many of the buyers, they're bargains. Petsmart bought the name Pets.com and 59 other pet-related addresses from the e-tailer for $375,000. "We looked at the traffic and what percentage we could convert to customers based on our experience, and then we determined what we were willing to pay to convert them," says Thomas P. McGovern Jr., who runs Petsmart's site. For Petsmart, with $2 billion in revenues a year, he jokes, "$375,000 is a small rounding error in our budget."

I think generics are far from dead, simply because of the value they bring both through type-in traffic and through branding power (brandspace authority, association and memorability).

And for large companies, mid & high six figures, and even low seven figures, isn't an impossibly large amount of money to pay for a top domain.

Domain names are ultimately a marketing tool, and so they must be evaluated in the context of marketing. Remember that one full-page ad in a major newspaper can cost $40K+...a television ad campaign in prime time can cost hundreds of thousands. The marketing campaigns of Fortune 500 companies that deal in publicly-comsumed products and services run to 9 figures.

The right domain name for the right product and company is still worth serious money, IMO.

 

[uncle]

I agree with Namethink..