Today on DomainNameWire.com, Andrew Allenmann stresses the importance of a good domain name and points to a $1 Million lesson.
An article in today’s Wall Street Journal confirms that the domain name Topix.com was purchased for $1M in January. The new owner is Topix.net, which receives 10M visitors per month. The company understood the user confusion of not owning the .com version of the domain and negotiated the purchase.
Topix.com was owned by a Canadian computer graphics and animation facility that specialized in character animation, special effects, film titling, and type and broadcast design. The domain was originally registered in 1995. Terms of the deal, including if the $1M price was all cash or included stock, are not available.
When entrepreneurs start a web site they frequently overlook the importance of a good domain. They think that if the site takes off they can always buy the more expensive domain they want. But Topix.net is a good example of why this is a bad strategy. Buying a good domain name from the get go pays off in the long run.
Andrew's analysis is bang on. A lot of start-up ventures are strapped for cash and don't protect the most important extensions of their domain name when just starting out because it's not in their budget. Had the former owner of Topix.com only registered their .CA name (they still have it), that would have been a Million dollar mistake. Lesson learned.