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Israel’s Goldnames Seeks Riches in Internet Domain Names

Bloomberg

Felice Maranz
(Aug 31, 2000)

 

“Emissione.com” is a name that made David Teten’s day. Employees at Teten’s Goldnames Ltd. were cruising for unclaimed Internet company names when they found “emissione,” Italian for initial public offering, and snapped it up for the company’s portfolio of domain names. Jerusalem-based Goldnames is looking for a buyer for the name, along with thousands of others it has stockpiled in a variety of languages.

 

Goldnames has picked up names including the French equivalent of “Financial-Markets.com” as it employs investment bankers to identify and value names rivals may fail to notice. “Domain names are the real estate of the Internet” and early investors have the chance to grab locations that are destined to balloon in value, said Teten, 30, chief executive and majority owner of the company.

 

Goldnames employs former bankers from firms including Goldman Sachs Group Inc. and Salomon Smith Barney to make sure it realizes the full potential of a market that is only six years old. It employs people from Italy, Brazil, Sweden, Finland and other countries to find names in their native languages, and says it’s the first company to look across cultures for domain names. The potential is huge, with the number of domain names expected to leap to 140 million in 2003 from 19 million today, Teten said.

 

100 Percent

 

Teten, who has an MBA from Harvard University, is a former Bear Stearns & Co. employee. Not everyone, however, is convinced that the Goldnames method of hiring investment bankers is the best way to approach the business of buying and selling names.

 

“I am not 100 percent sure of their strategy,” said Aryeh Green, managing director of G3 Associates, a consulting firm that helps companies come up with names. “I see them as middle men,” a role that doesn’t require the services of investment bankers. Goldnames isn’t yet profitable, and Teten declined to provide revenue figures. The company raised $2.2 million from investors in December and would eventually like to sell shares or be bought out, Teten said.

 

The company has hired Credit Suisse First Boston to manage a second round of financing it hopes will bring in $10 million. Investors sinking more money into the company include Rimon Ben- Shaoul, chief executive of Clal Industries Ltd., who’s acting on his own behalf, Teten said. The proceeds will go towards setting up offices in New York, California and London. “Branding on the Internet will be (an) asset of the future,” said Ben-Shaoul.

 

Registering

 

Investing in domain names began in 1994, Teten said. It costs $35 to register a name with the Internet Corporation for Assigned Names and Numbers (ICANN), the not-for-profit body that governs who claims which names. Selling a name for even $1,000 can result in “a healthy return on investment,” Teten said. The name “Business.com,” was recently sold for $7.5 million, said Dave Shamir, a consultant at Eureka! Creating and Strategic Naming Services.

 

“Names are a tremendous asset and it’s crucial to conceive of a name that will stand out,” said Shamir. Goldnames is facing competition from a host of companies, including World.com, a unit of Mail.com, and Erealestate.com, which has been in the domain name business since 1995.

 

Erealestate.com owns six of the seven “dirty words” once prohibited on U.S. airwaves, a market Goldnames doesn’t want to be drawn into, partly for ethical reasons and partly to preserve its reputation, Teten said. Teten says he isn’t worried about competitors as long as pedigree investment banks, like Goldman Sachs and Lehman Brothers, aren’t also seeking the business. “They haven’t woken up yet,” he said..

 

Bloomberg