Understanding Domain Real Estate: Marijuana.com and Other Big-Selling, High-Revenue Brands

To many everyday onlookers, the world of domain names can be a mysterious pursuit: the concept of an online fixer-upper may seem absurd to some, while others may undoubtedly balk at the enormous price tags of high-traffic web domains. In today’s business world, however, a company’s online presence can be the ultimate tool for driving up revenues and expanding the business — and a good domain name is an excellent starting point.

The marijuana industry is no different. In 2011, Marijuana.com was bought for $4.20 million by General Cannabis Inc., the company behind WeedMaps.com. At the time, Marijuana.com generated about 3.5 million unique visits. In its expansion, the company went on to hire Al Olson, former senior editor for CNBC, NBC News, and TODAY, as managing editor for the website; and then, more recently, the website was completely revamped to become first and foremost a sharing-based, social media community. The site today has grown into one of the leading cannabis-focused destinations around the web.

That formula, of course, is utilized in every industry. For another vice-dedicated site, check out Whisky.comthis premium domain name was purchased for $3.1 million on the first day of 2015. The site itself is ripe with activity — original content articles catch the homepage viewer’s eye, and there’s also a host of video blogs, forums and subforums, an extensive database of whiskies, and even a virtual tour of a whisky distillery. $3.1 million may seem like an overwhelming asking price, but the amount of direct-match Google searches, organically generated website traffic, and the existence of an already-successful franchise on the domain nearly guaranteed the investment’s worth.

Our next story is an odd one, but it demonstrates both the sticking power behind a premium brand domain and the devilish intricacies of corporate competition. The domain in question is VacationRentals.com, which is the most expensive domain name ever bought at $35 million. The website looks flashy and undoubtedly hosts a lot of tourists surfing through the site’s many vacation rental listings, but the real reason behind the domain’s absurd price? Competition. “The only reason we bought it was so Expedia couldn’t have that URL,” explained HomeAway CEO Brian Sharples. It may take some time to pay off that massive investment, but tourist lodging is a lucrative industry, and if HomeAway had earned enough to front the $35 million price tag, it can probably do it again and more.

Some domain-related transactions aren’t solely about the URL. For example, check out Amazon’s 2010 acquisition of Quidsi, the original company behind Diapers.com and Soap.com. Quidsi started the websites, built a healthy franchise, and eventually attracted the attention of some serious corporate players. Amazon purchased the company and its premium domain franchises for $500 million (and also assumed some $45 million in debt and other obligations), which was a hefty investment but justified by the amount of brand-building Quidsi had accomplished already for both websites. The Quidsi leadership staff was even left in charge of the websites, presumably because Amazon recognized and respected the talent behind the existing franchises.

The business of legal marijuana may be in its infancy, but as the industry gains mainstream respect and the country leans further and further toward full legalization, these surreal tales of corporate entrepreneurship will someday soon find themselves replicated in the marijuana business. Until then, ganjapreneurs can keep their eye out for unique brand-building opportunities, because you never know what might be your next million-dollar idea.

Sources:

http://techcrunch.com/2011/11/28/weedmaps-acquires-marijuana-com-for-a-kushy-4-20-million/

http://www.dnjournal.com/cover/2014/february.htm

http://www.domaininvesting.com/homeaway-ceo-on-vacationsrental-com/

http://www.businessinsider.com/amazon-announces-500-million-acquisition-of-diaperscom-2010-11

Photo Credit: India7 Network

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