Close, a company that had been operating on Close.io, recently announced that it acquired the brand match Close.com domain name. The purchase price and other details about the acquisition were not shared, but I think closing a deal on Close.com was a smart move for the company that is now known simply as Close. This slight branding change was made more possible because of its acquisition of Close.com.
Although details about the acquisition of Close.com were not revealed at the time the rebrand and domain migration was announced, the company just shared a blog post that has some revealing information from the perspective of a domain name buyer:
Just a few weeks ago, we announced our rebrand as Close and shared the news that we purchased the .com domain name. So, how did we do it? Using the power of the follow up for more than five and a half years.https://t.co/zOMoqT2MKM
— Close (@close) April 29, 2019
I think domain investors should read this blog post because it offers a glimpse into the buyer’s perspective about a domain name negotiation and the importance the acquisition would have on the company and its branding. Here are a few excerpts I found particularly informative as someone who regularly engages with companies that want to buy my domain names:
“It took five and a half long years of back and forth negotiations to get close.com.”
“A lot has changed since those early days. We’ve become a much more mature business with thousands of happy customers. And as the years went on, we acquired more customers and more people calling us “Close,” which is the name we’d been adopting internally as well.
Beyond just the benefits of properly aligning our brand with the .com name, we knew that owning this domain would illustrate to future customers that we’re here to stay for the long haul.”
“So, once per quarter, I’d ping the owner of the domain to check in and see how things are going with his startup.”
“We worked really hard to structure a deal that worked in everyone’s favor. That meant:
A very fair price that met somewhere in the middle from our last discussion
A payment structure that gave us a lot of flexibility around paying over time”
“But, at the last minute, we decided to pull out once the contract had already been sent to us.”
As a domain investor, here are some of my key takeaways from the Close.com acquisition:
- A domain name negotiation can last a long time.
- Buyer and seller need to work together to find a compromise deal that works.
- A payment plan can be a good way to bridge a financial gap.
- As a domain investor, if you reach out to sell a domain name, you may be in a poorer negotiating position.
- Even if a deal seems dead, it may come back to life.
- A domain name may be simply an investment for the registrant, but it represents something much bigger for the prospective buyer.
Not long ago a company tried to acquire a dictionary .com from us. A big brand that operates on a .eu. They negotiated for over a year, playing their games, just like Stali.
Last month they woke up to find the .Com going to a major porn site. It was sold to an agent who came in, made an offer and closed in 24 hours. The purchase price was low six figures. We feel bad for that brand, as a seller you want the good guys to win.
Today, I bet they’re focusing on their rebranding efforts, a task that is speculative, will cost millions of dollars, and was totally avoidable.
That is a very good story to share and a good lesson for companies who try the same approach that worked for Close.
Thank you for sharing.
Reminds me of a great story from the late 90s 🙂
Can’t say the name and price? This is a very good lesson and even better if the specifics were shared.
This is quite typical. A lot of deals get to the last step and then the buyer pulls out. They use a stall to hopefully negotiate a better rate thinking they have leverage.
Luckily for the buyer it worked, since obviously the seller is an amateur.
Dropping the price and “meeting in the middle” is stupid. I am surprised the buyer didn’t ask for the sellers arms and legs. Pretty sure they would have gotten that into the deal also LOL
Quite simply, the buyer got extremely lucky that someone else didn’t come along and buy the name while they were busy playing silly/wasteful negotiation games.
That is probably unlikely, and it sounds like they couldn’t really afford what they seller wanted a couple of years ago. They played this very very well, especially the whole going quiet strategy. I doubt this was more than a few hundred thousand whereas it could have been 7 figures without those tactics.
On a side note, I’ll bet few know Glenn Close went to Choate Rosemary Hall.
Awesome to see they used the power of the “follow up” – We own Followup.com and think it’s the perfect name for someone in the same space as Close.com. Do you agree?
Elliot, your analysis is spot on.
I think they were lucky that the seller became more motivated to sell. I don’t like the “.. I kept offering him the same (very humble) price for the domain, seeing that it was sitting unused for all this time.” statement at all. Makes them look cheap and now they’re bragging about their great negotiation skills, when all that happened is that the seller’s circumstances changed.
I doubt they would ever have achieved the acquisition if the seller had taken the approach of going quiet, because I doubt they would have known how to cope with no response.
The sellers business had failed, I very much doubt he had much leverage to “go quiet” when he needs to sell off the assets. The buyer would have known that at some point they’d need to sell.
The buyer did very well with this negotiation in my view, by holding off and taking things slow. I think if the price were known it would be be far lower than most think.
The buyer was lucky that he was apparently dealing with a nice enough guy that ultimately had to sell.
Good job, but don’t act like you’re the negotiator in chief now. If the seller wakes up in the morning with a bad mood and decides that he would like to cash in on some porn ads and forwards his precious .com domain to some hardcore affiliate links, your slow hand negotiation “skills” will backfire rather quick. But again, you apparently dealt with a gentleman, so be grateful.