Voice.com sold for $ 30 million
Business lessons from the world's most expensive domain name
Last month, blockchain provider Block.one paid 30 million US dollars for the domain name voice.com. It's the highest publicly disclosed sum ever paid for a domain name. The previous record price was $ 13 million, paid for sex.com. As well as grabbing headlines, the purchase serves as a warning to businesses thinking of names for their products and services. The wrong choice can be expensive.
Trading as Voice
Block.one runs the cryptocurrency EOSIO, estimated to be worth $ 5 billion. The company made the news in 2018, when it raised $ 4 billion on the NASDAQ, and soon afterwards started offering services under the trading name 'Voice'. The services were marketed using the domain name voice.io, because -- with 'Voice' being so generic -- the matching .com was of course long gone. However, as the operation grew, it was quickly apparent that many prospective customers were looking for Voice at voice.com, not voice.io. Valuable leads were being dropped, so Voice asked GoDaddy to negotiate the acquisition of voice.com.
Good domain name is an asset
It was immediately clear that getting hold of voice.com wouldn't be easy. Software house MicroStrategy had held the name for nearly fifteen years, having registered it when building a portfolio. The portfolio was originally intended for delivery of the company's own services. However, it wasn't long before MicroStrategy recognised that the names were also valuable assets, which could be used to reinforce its capital position. The company was in no hurry to offload assets from its balance sheet, so its negotiating position was strong.
Dubious business case
Eventually, however, GoDaddy was able to secure the name for that record price. Plus commission, of course. A big-ticket purchase for Block.one, which fortunately had plenty of cash at its disposal following the floatation in 2018. Nevertheless, some market-watchers were quick to point out that the company had yet to live up to its hype. And it's certainly pertinent to ask whether Block.one could have been smarter when choosing a trading name. After all, there is no shortage of great domain names available to register, or to a buy for a fraction of the price paid by Block. Even in the enormous .com domain.
It pays to think ahead
Modern internet users will habitually put .nl after Dutch company names and .com after non-Dutch names. Making allowance for that can save a company a lot of money over time. When starting a business, it pays to think carefully about the name you're going to trade under, because changing later or having to buy a domain name off another registrant can be expensive.
They don't come cheap
Another notable aspect of the deal for voice.com is that the seller made the purchase price public. From MicroStrategy's perspective, disclosure makes good sense. Their message to anyone who might come after their other names is clear: 'they don't come cheap'.