Will GoldNames strike it rich with domain names?

EO News

(Aug 16, 2000)

Just as the battle over domain names seems to be over, an Israeli company is refusing to sign the peace accord. GoldNames has registered around 35,000 web addresses and intends to make secondary markets – a kind of auction process – in determining their value and selling them (EOnews, 15 August).

Is there life in the oldest dotcom business yet? What was once a lucrative pursuit has been dealt a double blow in recent weeks. First, Wipo, the international domain regulator, has cracked down on so-called “cybersquatting”, forcing owners of web addresses claimed by bona-fide businesses and organisations to hand them over. Second, the authorities have also recently ruled that new domain titles are to be introduced in the next few months.

These are likely to include .shop, .bank and .club. GoldNames is avoiding the cybersquatting tag by buying and trading names unrelated to any business brands. Thus it is hoping to score, as others have in the past with the likes of business.com, which went for a reported $7m, and if.com, which sold for $1m. A quick glance at the site reveals an extensive list – the Norwegian equivalent of “cabbage.com” is under the Vegetables section, as is the Finnish eqivalent of “wolfhound.com” in the Animals and Pets section. Despite some of the web addresses it owns being less than impressive, GoldNames has managed to raise $2.25m from investors. As new domain titles appear, it intends to buy them as well.

Its strategy is to become the first port of call for name-seeking companies and name-sellers. It’s an ambitious business strategy, but by setting itself up as an exchange – or investment bank, as the company prefers to call itself – GoldNames is making a smart bet that it will be perceived as a service business, rather than exploiting the domain name system. The danger for the company is that it is entering what is already a competitive market, with prices consistently being bid up for the best names. But if the company can build its brand and communicate its “banking” message quickly, it stands a fair chance of success.

EO News