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Friday 5 September 2008

Pound sold to highest bidder

Matthew Lynn on domain name sales

In Amsterdam, on the afternoon of 26 June, the pound is finally being sold off. No, Gordon Brown hasn’t decided to repeat his famous trick of dumping a chunk of the nation’s gold reserves at the nadir of the bullion market. Nor has Mervyn King decided the outlook for the British economy is now so grim he might as well sell what he can before taking himself off to Grand Cayman.

Instead, ‘£.com’ is up for sale. The winner of the auction for what its owners, with a lively sense of hyperbole describe as the ‘World’s Most Exclusive Financial Domain’, will be able to use the £ sign for anything they like. Tap it into your browser, and you could be sold insurance or unit trusts, or be redirected to the site of one of the flashier hedge funds.

‘It’s hard to speculate who might want to own it,’ said Richard Haigh, whose company owns the internet rights to the symbol. ‘I think it would be a start-up that was looking to establish a brand for itself quickly. Domain names are like adverts, and I think of a symbol as being like a big display ad.’

Of course, domain names are big business, and have been ever since the internet began. The very best can command a lot of money. A long and savage legal battle was fought over

sex.com, and when that was finally resolved, the rights to the name fetched an impressive $14 million. Porn.com fetched more than $9 million. Business.com fetched $7.5 million back in 1999, and although that was the peak of dotcom mania, it would probably be worth much more now. Likewise, Diamond.com fetched $7.5 million, which goes to show they are not just a girl’s best friend.  

The trade is still flourishing. This year pizza.com was sold for $2.6 million. Money.co.uk fetched a reported $2.4 million, the highest ever price for a ‘.co.uk’ domain. And these are investments that usually pay off. Business.com may have raised eyebrows when it was sold — and the site itself is no more than a rather dull directory of business services — but when it was resold last year, News Corp and the New York Times were among the bidders before RH Donnelly, an American yellow pages firm, eventually handed over no less than $345 million for it.

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