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Old 9th July 2006, 04:43 PM
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£1m ‘domain’ name bet cheap at half the price

Belfast Telegraph Home > News > Business



£1m ‘domain’ name bet cheap at half the price


By Nic Fildes

06 July 2006
The Internet Business Group (IBG) has spent more than £1m to get hold of three domain names. Ironically, the websites it has purchased all start with the word “cheap”.

Buying a domain name can cost anywhere between £1.99 and millions of pounds.

Sex.com remains the world’s most expensive domain name after being sold for a whopping $12m (£6.5m) in January, yet domain names do not generally sell for the astronomical prices that were seen during the technology bubble.

Hence eyebrows were raised when IBG unveiled its £1.1m purchase of cheapholidaydeals.co.uk and cheapaccommodation.com, as well as other “cheap” addresses.

Maziar Darvish dismissed concerns that the deal was anything but cheap. “That perception is understandable but this is a strategic acquisition,” said Mr Darvish , the chairman and chief executive of IBG. “I agree that in their own right, domain names are worthless.”

He said that the current sites already generate hundreds of thousands of pounds worth of advertising revenue and that once IBG replaces the current websites with its own, it expects usage and revenue to grow rapidly. Simon Halberstam, the head of e-commerce at Weblaw Group, said that generic domain names are attractive as the sites will frequently be accessed through search engines such as Google.

However, he said that companies such as IBG would be naive to buy a domain name for millions of pounds unless there is a business behind it.

“It would be like buying a building and not the business. People do not throw money at domain names for the sake of it anymore,” he said.

Steve Palmer, a senior lawyer with Rawlison Butler, said the £1.1m price sounds expensive but the key will be to ensure that consumers are continually driven to the website.
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Old 9th July 2006, 05:51 PM
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Re: £1m ‘domain’ name bet cheap at half the price

Good read
Certainly glad I own Japanese domains like CheapTravel & CheapHotels...
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Old 9th July 2006, 06:55 PM
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Re: £1m ‘domain’ name bet cheap at half the price

They're paying that money for the well-established PR8 websites with large amounts of ready-made, perfectly targeted traffic, and not (or primarily not) for the domains. At least, that seems to be the consensus I've seen on various boards...

If they transition the sites intelligently they should keep their PR8 rating since the domains never expired.
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Old 9th July 2006, 07:43 PM
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Re: £1m ‘domain’ name bet cheap at half the price

True for this case, but still domains play a big role in existing businesses website sales. i.e if 123something.com is bought for a million, it would be 1.5 million if the domain was something.com imo
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