Most dot-com venture capitalists would confirm that you can’t build a business solely based on acquiring the “right” URL. However, having a URL that properly identifies your company and/or your products and services can truly help you build your fast-growing business. A good URL increases your brand awareness and makes it easier for people to communicate with you.
My own company, AnswerNet, owns many URLs. We acquired each URL in one of three ways:
- We looked up a desired URL, found it was available and registered it.
- We acquired the URL as part of an acquisition.
- We looked up a desired URL, found it was owned by someone else and acquired the rights to the URL the old fashion way: We paid for it.
Our most valuable URLs are www.answernet.com and www.telemarketing.com . The first of these URLs was purchased from a “cyber squatter”—an individual who had acquired it solely for the purpose of some day re-selling it. The other was owned by one of the smallest companies we ever acquired. Hopefully the story of how we acquired these URLs will help your company in its attempts to get the “right” URL for your business.
The High Ransom Cost of a Good URL
In 1999, we decided to extend our live operator services to include support for client websites using Web chat software. At the time, we realized that we needed to have our own website to demonstrate this new service. (Remember the time when not every company had a website?)
Since our primary corporate name was AnswerNet, Inc. and our marketing brand was “The AnswerNet Network,” we went out to acquire www.answernet.com. An online search revealed that http://www.answernet.com was not available. We then did a search on the Network Solutions website and figured out that no one was using the domain for an operating website, but that the domain nevertheless was registered to someone in California.
I contacted the man whose name was listed as the “owner” of the URL and explained that we were a small telephone answering service and call center business called AnswerNet, and that if he wasn’t using the domain, we would really like to use it. I even told him we would be happy to pay him to transfer the domain to us, thinking that it might cost $500 to $1000 to purchase what he had gotten for free. Here was my first introduction to cyber squatting.
After explaining to me that he had registered hundreds of domain names, the man generously offered to sell us the URL for $50,000! At the time, I explained that this figure represented more than half of our then monthly revenue and that the domain had no real intrinsic value except to a company called “AnswerNet,” but he wasn’t impressed or swayed. He told me that he would eventually get his price and was willing to wait until someone was ready to pay for it.
How to Do Covert Domain Retrieval
We ultimately registered http://www.answernetnetwork.com and launched our first rudimentary website and our Web chat services. While this URL worked for us, it was long, cumbersome and often difficult for people to spell. The famous phrase was “two nets, one word.”
Over the next few years, the company continued to grow (#21 on the 2003 Inc. 500 list of fastest growing private companies) and we regularly checked the Web to see if anyone was using “our” URL. Thankfully, no one had agreed to pay this guy’s fee.
In late 2003, we decided to make another run for the URL. By this time, we were much larger and more widely known than the first time we contacted him so we decided to take an indirect approach. Instead of calling him myself, our marketing manager called him from his cell phone and made the same appeal I had made years earlier. We told him that we were a startup with the name AnswerNet and that we wanted to acquire the URL. This time he came back with $5,000 instead of $50,000 and after a little more negotiation (in our favor), we made a deal.
We completed the transaction by paying the guy with a personal check from the marketing manager and within a few weeks we had the new domain pointed to our site. Since then it has been much easier for people to find us and to identify our brand with our URL.
How to Negotiate with a Willing Seller
Last year, we learned the real value a descriptive domain could have. I was approached by Malynda and Rich Madzel, the wonderful owners of a Columbia, MD-based company called Custom Telemarketing Services. They wanted to sell their small business-to-business telemarketing company, and they also wanted to sell their URL, www.telemarketing.com. While I knew that http://www.telemarketing.com could have value to a company like mine (we had purchased two inbound/outbound telemarketing center businesses in 2004), the former owners had never exploited the URL because they wanted to keep their business small and they used the URL to get only the business needed to fill their shop and no more. At the same time, they wanted a higher price than the operating side of their business merited on its own because they realized the potential value of the URL.
After a couple of meetings, we reached an impasse because we wouldn’t agree to pay substantially more than the operating business was worth, and they wouldn’t accept that price because they wanted to get some value from the URL.
A few weeks passed and someone came up with an idea that ultimately allowed us to complete the transaction. We agreed to pay for the value of the operating business and further agreed on a price for the URL. However, prior to paying for the URL, we were permitted to pay a non-refundable down payment towards the purchase of the URL. We then were given the rights to exploit the URL for a year to determine if the value we had all imagined was real before we had to make the final payment. If we were happy with the value, we could make the payment. If we were not, we had the right to give the URL back.
It only took us four months to realize that the URL was valuable enough to buy, and that the price we had agreed to in advance turned out to be fair. Today, through the use of search engine optimization, www.telemarketing.com ranks high on almost all search engines and helps drive 20 to 30% of the growth for our telemarketing and telesales business.
The Value of the URL
While I’m not convinced that the wrong URL is make-or-break for our business, having the right URL makes all the difference in increasing our communication and brand awareness with the clients we want to reach.