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Bank shuns stocks for domain names


(Aug 15, 2000)

It’s a sign of the times when domain names – the words that make up web addresses – are considered a worthy basis for an investment bank. GoldNames, an Israeli-based company launching today, will take the traditional infrastructure of equity, debt, currency, option and real estate markets, and rebuild them for the asset class of domain names. The company will focus primarily on the multi-lingual European market.

GoldNames has convinced investors that there are concrete gains to be made from cyber-assets. Swiss investment group Credit Suisse Private Banking is currently leading the company’s $10m second round of private funding.

“Internet domain names are the real estate of the Internet – comparable to stocks and bonds,” said David Teten, founder and CEO of GoldNames. “This company’s mission is to bring the professionalism, the technology, and the transactional expertise of investment banking to this new asset class.” However, GoldNames is more than a domain name registration service, such as NetNames and NetMagic. The company aims to create a bank of names, and for domains costing more than $250,000, customers will be offered the services of GoldNames’ M&A team.

The team will also work with venture capitalists to advise on the potential investment value of domains, and to predict which will offer the best returns to investors. To prove its seriousness, GoldNames has recruited a team of 45 blue-chip bankers, including former executives from Bear Stearns, Citibank, Credit Suisse First Boston, Goldman Sachs, Merrill Lynch, Salomon Brothers and American Express.

The company will use in-house technology to allow investors to search across multiple languages for domain names, and register simultaneously in 22 different countries. That technology will be sold to external customers in the future, said Weldon Turner, GoldNames’ COO. The investment group will also generate revenues from leasing and selling domain names from its corporate portfolio, affiliate relationships, advertising and by offering automated advisory services for name transactions. “Over the past five years, investing in English language domain names has yielded exceptionally high returns,” said Turner. “We are banking on the same thing happening with non-English domain names.” GoldNames will help companies to market more effectively by providing high-value domain names, particularly in languages other than English, Teten said.