Posts Tagged ‘Generic Domains’
Last night I went for a cinco de mayo party. Yes, it was the day after but with 30 of us that’s the only way to get a table. As we sat and talked I noticed that only the older men (over 30) were wearing watches. In addition, everyone came after work, so I was surprised not to see anyone wearing a tie. It made me start to think. When i spoke to a few of the under 30, I asked if any of them owned a watch. Only one did and said it was a gift from his dad. He told me he never wears it since there is no need. He has an iphone that he can check for time. Why would he need to wear one he asked?
Would I start a business in either of those areas, no. Thats not saying you could not have a successful business. Look at Rick Latona. He started a site called webuywatches.com and is doing fairly well. However, it is not his only business.
We have seen alot change on the web. Netscape was the first major browser and had at one point virtually all of the market. That is no longer the case. Yahoo used to be the premier search engine on the web. That is no longer the case.
There are also trends showing upside of various products and industries. An art auction at Sotherbys the other day, someone purchased the highest recorded sale at auction for a painting. Over 100 million USD for a Picasso. People are spending that much because it is an amazing and unique work of art that cant be replicated and whose value has shown increasing over time. The same thing can be said about generic domains. They are unique and cant be replicated. A generic domain is like a fine piece of art. The trend for domains is increased registrations especially with all the new tld’s. As more domains come into the market place it only raises value for the prime generic .com’s as they are domaining’s answer to fine art.
In what turned out to be the right decision, the National Arbitration Forum ruled Media Rain LLC engaged in Reverse Domain Hijacking in their attempt to win the generic name Rain.com. They had claimed that Verio was not using it for any business activity, however that panel noted:
that passive holding of a domain name, without more, does not establish bad faith under Policy ¶ 4(a)(iii). Moreover, the evidence before the Panel shows use of the domain name since 1997 in connection with webhosting services. The Panel approves what was said in the case of e-Duction, Inc. v. Zuccarini WIPO Case No. D2000-1369:
“In the ordinary case, a business adopting a new mark in today’s world must take the Internet as it finds it. If someone else has already registered a domain name identical or confusingly similar to the proposed new mark, that domain name will be unavailable to the business unless it negotiates a transfer. This is true even if the registrant is in other respects behaving badly, as Respondent is in this case.
On this record, the Panel finds that Respondent was not aware of Complainant’s not-yet extant mark at the time he registered the domain name. Accordingly, Respondent’s registration of the domain name can not have been in bad faith.”
This Panel finds that when Respondent registered the domain name, Complainant had no trade mark rights. The Panel finds that Complainant was not in existence at that time. There is no evidence to show earlier use of the trademark by a predecessor-in-interest to Complainant. In short, there is no suggestion in the evidence before the Panel that Complainant or its trademark could have been within Respondent’s contemplation at the time the disputed domain name was registered.
Accordingly, Panel finds that registration of the domain name was not in bad faith within the meaning of the Policy even if subsequent use of the domain name could be said to have been in bad faith, a matter on which Panel is not required to make a finding.”
The Panel finds that Complainant has failed to establish what is required of it under Policy.
Along with the decision, the Verio asked the panel to find Reverse Hijacking. Reverse Hikjacking means that the party starting the UDRP is “using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.” The panel this to be so.
A day or 2 before the bidding starts, a wrench is thrown in. It is told to us that google has blocked their top revenue name. It is being switched to yahoo but we may not here revenue figures before the bidding starts. While we were not buying based on revenue, it was a material number and had to be considered. One thing I forgot to mention. When we originally bid in part 1, we had no revenue figures. The only party to have the figures was one of the other bidders that had been managing the domains.
The auction starts with our bid as the starting bid. There is a few million on the table. Bid increases have to be a minimum of 100k. One party tops us and we come right back. The third party drops out quickly. So now 2 parties remain. I have an idea of who the remaining party is and my gut tells me there is no way to beat him. I’ll explain why later. The other party has requested minimum bids to be reduced now to $25,000 from $100,000. This could be read 2 ways. Either they are near their maximum or they want to win and tell feel we are near ours and they would only have to go up 25k on their last bid instead of 100k. As it turns out neither of us was close to being done.
The board then asks that they want a final bid from each party. We don’t like this as we feel that it could favor the other party and demand that the current rules apply. It turns out the other party was also insistent that the bidding continue. The board relents and lets the bidding stay the same way.
The bids go back and forth by telephone. At first 25k bids are going back and forth. Then slightly higher. We have topped another million dollar mark and the bids kept coming. When we go up a 100k they go up 25k more. When we go up 500k more, they go up 25k more. We are now in the mid to upper 7 figures. The domains are worth considerably more in my opinion but since the toys.com auction has still not finished its process, it starts to weigh in the decision.
Then the next hurdle is put before us. The rules of the game get changed and there is no way to stop it. The other party guarantees that if he wins he will submit all funds by close of business the next day. The board tells us that this is what they are going to do. This most likely a tactic by the other party to get us out of the game. However, that would not be the case just yet. I call for a hail Mary. I quickly call partners to see what the max cash we can get together in 24hours and decide that is the number we have to do. I have no choice. Even if we don’t get this I want to make sure I squeeze as much blood as I can out of this. Its their court and ball and we have to play by their rules. We keep going up by 500k. Each time, the other party counters 25k more. We make our last bid.
Come back tomorrow for the last part in this series.
So now, we sit back and put our thinking caps on. We were told we were the highest offer . they are asking all parties to make a minimum bid of 100k higher than our last offer. We have a few days for discussion. I assume that we need to blow everyone else out of the game and when its time to present our offer we raise our bid $800,000 (note to all, the bids are now in the low to mid 7 figures. I assumed (really hoped) that coming in with the highest bid would close it down. Lesson to all – don’t assume.
Here’s the notification letter:
I am pleased to inform you that your bid of $Y,YYY,YYY for the domain names and trademarks owned by our wholly owned subsidiary, xxxxxxxxxxxx represents one of the three highest bids received as part of xxxxxxxxxxxx’s sale process.
On Monday, beginning at approximately 10:00 a.m., we will be conducting a round robin auction, consisting of individual phone calls to the three remaining participants seeking the highest bid. We will continue the calls until two of the three bidders drop out, leaving the buyer that we will move forward with toward closing.
At the conclusion of the bidding on Monday, we intend to have the winning bidder execute a letter of intent, and immediately wire funds representing 10% of the purchase price to xxxxxxxxxxxx. We intend to structure this transaction as an asset sale, and consideration shall be in cash payable at closing, anticipated to be no later than xxxxxxxx, xx, 2009. I will be distributing the form of the letter of intent and asset purchase agreement over the weekend.
Please note that the Buyer shall rely solely on the revenue data previously supplied as support for any bid, and closing of the transaction shall not be contingent upon the buyer performing any additional due diligence with respect to statistical data related to the domain names.
Thank you again for your participation in this sale process, and I look forward to speaking with you on Monday.
Stay tuned for the auction in part 4
I pace around my desk the next day as I await the boards response to my offer. As I mentioned in my Part 1 post, We had discovered an amazing portfolio of generic domains that was being offered for sale. I was told by the company selling the domains that they were examining a few offers and to get an offer in quickly if we were to be considered, which we did. Our bid would be reviewed and would be be responded to with 24-48 hours.
After wearing out the carpet on my floor, I receive the phone call that I was waiting for. I am informed that the board has reviewed our offer and found it to be viable. However, they do not accept it. They inform me that they have decided to ask a few parties to make another bid.
The company forwards a letter with the following:
1 – The complete list of names with revenue per name
2 – Ask for offers on individual names and for the whole package
3 – 3 days to bid
4 – Bids will be evaluated and a next step decided
5 – Letter of Intent signed quickly by party chosen
6 – non refundable down payment by chosen party
7 – closing in about 2 weeks
Parties are told that there will be a minimum portfolio bid. The minimum turns out to be $100,000 higher than our last bid, which was the highest bid at the time.
Stay tuned for Part 3