Matthew Barzun is VP, Software Services at CNET. I caught up with him through the magic of email to quiz him about CNET’s domain name policies.
Please tell me a little about CNET’s past domain name transactions.
To understand CNET’s domain name strategy you must first understand our content strategy on the Internet. Rather than grouping all of CNET’s content under one domain name (say, CNET.COM) as other sites had done, we decided to “disaggregate” the content into standalone sites so that each site would specifically address the needs of its users. CNET realized early on that there was great value to having straightforward, easy-to-remember, domain names for these standalone sites. A great example is SHAREWARE.COM site. When CNET.COM first launched in June 1995, we had a section of the site called the Virtual Software Library, which was devoted to the downloading of software off the NET. It became a very popular section within the CNET.COM site and so in Nov 1995 we launched it under the domain name SHAREWARE.COM. At that time (Fall 1995) we came up with a list of the key areas that CNET wanted to expand into and picked the best domain names for these sites. We felt that it was best to try to acquire these names sooner rather than later because the demand for simple names would only increase and the demand would drive up prices later (I think we are seeing that now with some people asking big money for names). We acted early and were able to secure some very important domain names such as SEARCH.COM, NEWS.COM, and DOWNLOAD.COM.
Please explain briefly your own role in domain name purchasing.
Once we had our list of domain names to get, I set about acquiring these names. The first step is to see if a given name was already registered at the InterNIC. To find out I would search on the name at the InterNIC WWW site ( http://rs.internic.net/cgi-bin/whois [1]) by enterning, say, SEARCH.COM. If the name was already registered then I would contact the owner by phone or email and find out if they were interested in selling the domain. If so, I would negotiate with the owner to purchase the name. Remember that the owners of these names had paid no money for the names (they registered them before the Internic instituted its $50 per year charge) so our offers represented significant return on their investment. If it was not taken, I would register it and pay the registration fee.
What strategies do you employ to select domain names for purchasing? What evaluation criteria do you use? What constitutes a “great” domain name?
Our strategy for selecting domain names is simple: the name should:
- describe as simply as possible what the WWW site does
- be easy to remember (important for word-of-mouth marketing)
- be easy to spell
To reduce it to two words: simple and straightforward . As you probably know, CNET has 4 TV shows (The Web, The New Edge, TV.COM, and CNET Central) and we promote our WWW sites on these shows. TV is a great way to drive traffic to a site, but time on TV is precious and a domain name must be simple and short for viewers to remember it. I see some advertisements on TV that promote URLs on screen that are something like this: wwww.somesite.com/something/somethingelse.html. Yikes! Who could remember that?
Could you give some ballpark figures for the price CNET has paid for various domain names?
Sure. I cannot give you exact numbers for many of these names because of confidentiality agreements. But here are some:
- SEARCH.COM for $7,000
- DOWNLOAD.COM for $20,000
- TV.COM for $15,000
- GAMECENTER.COM for $0 (we got this great name for nothing because it was not taken)
How can a good domain name add value to a company’s web presence?
A company (big or small) can benefit from a good domain name for many reasons. Here are 3 important ways:
- A good domain can be easily passed on by word-of-mouth, which is important if a company does not have a big budget to promote its site.
- A good domain name is easy to promote on TV and in print advertising. In offline media such as these it is important for the name to be memorable because the site is more than a click away.
- A good domain name may give the site a greater chance of being found in some search engines, which is still the way many users of the Net find out about new sites. It is always tricky to predict if and in what order a site will be categorized in the major search engines, but having a good domain name that describes what the site does is a good start.
How have CNET’s names added value to its own operations?
We have created some great sites that have some great domain names, such as SEARCH.COM, DOWNLOAD.COM, and NEWS.COM. And these sites all bring trusted, timely information to their users and that is what CNET’s online strategy is all about. I think having simple, straightforward domain names helps a site stay focused and know its audience. I know with DOWNLOAD.COM (the site I work on very closely) we said to ourselves, “OK, we have a great name, now let’s build a site that lives up to the name.” I think you see the same thing with NEWS.COM. They have the best, most timely Tech news on the Net.
That said, I think I should point out the getting a good domain name is the easy part — the real credit belongs to all the producers and designers that generate the content and create the interface — that’s the hard part.
How can a company recover the cost of purchasing a valuable domain name? Do the benefits of owning that domain name outweigh this cost?
That all depends on two things: First, how much the company paid for the name and second, how profitable the site is. So that is a hard question to answer. But I know that in the case of CNET, we have many advertising-supported sites and that model is working for us. The caluculation would go something like this: How many pages will the site turn per day? How much ad revenue will we generate per page? Once you know those two figures you can figure out how many days or months of operation it will take to make back the money we spent on a name. That said, I think the days of getting good deals on domain names is over. I am glad we got our names when we did because people seem to be asking a lot of $$ for the names now.
What proportion of names has CNET purchased rather than registered?
I don’t know the exact figure. But I would guess that we have bought less than 25% of the names we have registered.
Please give some examples of domain names owned by CNET.
Sure. Let me start by giving you a list of names that are being used at “live” WWW sites now:
CNET.COM NEWS.COM GAMECENTER.COM SEARCH.COM DOWNLOAD.COM SHAREWARE.COM ACTIVEX.COM
We have also acquired the following names:
TV.COM RADIO.COM THEWEB.COM
There are other names we have registered that we have not yet announced, so I cannot discuss them now.
What is your view on some of the latest domain name “valuations” of half a million dollars or more for a single name?
As I said before, I am glad we got our names early because the prices are getting outrageous. I don’t know what name is currently being offered for $500,000, but that’s a lot of money.
Could you outline briefly your future domain purchasing plans?
Well, I think we are pretty much done acquiring names. We have acquired or registered the names on that initial list I described to you earlier so now our challenge is to build and continually improve the sites we have.
How do you see the proposed expansion of the number of top level domains affecting the domain name market? What will the impact of this expansion be on companies such as CNET?
I assume you mean the proposed additions of top level domains such as .biz, .inc, etc. I think that this is similar to the recent addition of the prefix “888” for toll-free numbers — it became necessary because of the demand for numbers, but most people still refer to toll-free numbers as “800 numbers”. I think that .com has come to be synonomous with sites offering content and services on the Net over the past year, and any change to top level domains does not worry me too much. I think there will be interesting trademark issues that arise and I hope they don’t rush into anything without thinking through all the ramifications.
Where do you see the domain name market six months and one year from now?
It has become a cliche to say this, but…6 months is a long time. I think that most of the good names will probably be taken. Some individuals holding on to names and trying to get big bucks from a company might find themselves out of luck. At some point a company must pick a name and go for it. Once they have a lot of printed material and built up brand equity in a domain name it will be hard for them to justify switching. And if a company is going to commit to the Internet in some form and spend real money on it then they better start learing about the medium now.
Please feel free to add any comments you like.
I think your questions covered all the major points.
Thank you for participating in this interview.
My pleasure. Thank you.