40z.com - making sense of internet branding

Drugstore.com acquired $409 million

Walgreens bought drugstore.com for $409 million, and it included other website brands, such as Beauty.com, Skinstore.com, VisionDirect.com.
 
Of course drugstore.com was much more than name, it was a real business, with $456 million in sales/revenue last year. But it started originally as an idea, based on a generic domain brand. And it worked.

Here is what Walgreen's said about the acquisition:
 
http://techcrunch.com/2011/03/24/boom-walgreens-buys-online-retailer-drugstore-com-for-409-million/
Walgreens President and CEO Greg Wasson, commented:
“This acquisition offers a unique opportunity that will provide us immediate access to more than 3 million savvy, online loyal customers, and will allow us to move even closer to our existing customers through relationships with new vendors and partners, adding approximately 60,000 products to our already strong online offering. Importantly, drugstore.com’s well-recognized presence in the health, personal care, beauty and vision categories, including such strong websites as drugstore.com, Beauty.com, SkinStore.com and VisionDirect.com, will complement and extend many of our own multi-channel initiatives that have been driving growth in our business.”
Drugstore.com will maintain separate branding of its websites after the merger closes.

InternetBrands.com to be Acquired for $640m

In the news today www.InternetBrands.com is being acquired by Hellman & Friedman for $640 million.

Internet Brands owns and operates 100+ websites, including some interesting developed generic domains:

Autos.com, CarsDirect.com, Loan.com, BusinessFinance.com, Vasectomy.com, CancerForums.net, HealthNews.org, DoItYourself.com, Gardens.com, NursingJobs.org, VacationHomes.com, WikiTravel.org, VetInfo.com, etc.

Interestingly, 40z covered the story of Photos.com, a photography portal which was acquired by GettyImages as a part of their acquisition of Jupiter Media in 2009. GettyImages itself was acquired by Hellman & Friedman for $2.4 billion,  3 months after Getty's acquistion of Jupiter Media, and its flagship portal photos.com.

Fund.com - $9,999,950 cash transaction

FNDM (ticker for Fund.com) put out a pr today,
http://finance.yahoo.com/q?s=FNDM.OB
regarding the transaction of their domain acquisition- Fund.com

http://biz.yahoo.com/iw/080311/0373359.html
Clek Media Inc. Brokers World-Record $10 Million Domain Sale

and a second PR today:
http://money.cnn.com/news/newsfeeds/articles/marketwire/0373316.htm
Fund.com Inc. Recruits Senior Finance Executive, Gregory H. Webster, as President
Former President and CEO of HSBC Brokerage (USA) Inc.

CNN buys iReport.com for $750,000

In news reported on Jan. 17 at Dnjournal.com CNN has acquired the domain name iReport.com for $750,000. Obviously part of an internet strategy on CNN's part to expand their reach into social media, and eyewitness reporting.

BodyBuilding.com $100 million

The Wall Street Journal has reported that a controlling interest in BodyBuilding.com has been sold for $100 million. BodyBuilding.com has a social network with over 100,000 members, and had about 2 million unique visitors in November 07. Revenue in 2008 is expected to exceed $100 million.

Weather.com $5 Billion

CNBC just reported this morning that Weather.com is expected to be on the auction block

expected price? $5 Billion. OK, it includes the weather cable channel as well, but its an interesting pairing of media, the cable channel and the 25th busiest website on the internet.

Read more at TechCrunch

Disney buys ClubPenguin.com

OK, so another website sells. The odd thing is, that makes 2 this week. Selling for about the same price. ClubPenguin.com sold, according to CNBC, for $350 million cash. However, there were some aggressive incentives that might push the total price up to $700 million.

Not the same kind of play as Business.com, which I believe was largely built by the value of its domain name. ClubPenguin.com has 12 million members. So its another case of a media firm, this time Disney, buying eyeballs on the internet.

Penguins anyone? Read an interview with the CEO at paidcontent.org

More details on the transaction at techcrunch.com. Apparently ClubPenguin.com has 700,000 subscribers and 12 million registered users.

Business.com $345 million, Dictionary.com $100 million, Traffic.com $179 million, etc.

Domain branding is central to the successful development of internet businesses. Traditionally, a company will chose a name which is non-generic in nature, so that the identity of the business and brand can be trademarked and protected. Which traditionally, is exactly what a business should do. Often they make up a name by picking two unrelated words, putting them together in some unexpected way, to create a new, never- before- seen word. Like moonzoom or skyfall. And then they spend a fortune trying to build the brand just to get you to remember the name. Its great for the budgets of the advertising agencies.

But its not great for an internet business. Sure you can brand anything, if you spend enough money.  And the search engine optimization specialists will tell you that the domain name doesn't matter anyway. They can get XYZcoldPizza.net to page one of the search engines. And if you keep them on retainer, they can keep you there every time the search algorithms change. Maybe.

But most businesses are missing the point about domain names. Its not a trademark issue. You own it, and no one else can use it. Because its registered to you. Its not a search engine optimization issue. With the right domain name branding, you don't even need the search engines.

Its a behavioral issue. The easier the name is to remember, the greater the rate of return will be on any advertising dollar you spend. And the easier the name is to remember, the more repeat business you will get. And if you were smart enough to buy the domain that actually matches the keyword generic category for your industry, you have a number of competitive advantages over everyone else on the internet.

1. Instant credibility - you are the brand. Your customer already knows exactly who you are, and what you do, just by virtue of your name.

2. Free type-in traffic. A lot of people looking for your product will actually just type in your category killer domain name into the browser. And viola. They find you. Never having even visited a search engine.

3. Lots of repeat business. People return to sites they can remember. And if you are the easiest site to remember, you get the most repeat business.