Cover.com Was Acquired for $825,000

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In August of 2017, I wrote about how a company called Cover was able to buy its exact match Cover.com domain name. At the time of my article, the purchase price of Cover.com was unreported.

According to an article in the Entrepreneur’s Handbook publication on Medium, Cover.com was sold for $825,000. From what I can tell from the article and from historical Whois records at DomainTools, the domain name sold in 2017. Prior to the sale, the Cover.com domain name had been owned by Digimedia.

The article offers some interesting insight about why the startup decided to spend nearly seven figures to purchase Cover.com. Also interesting, one of the founders of Cover shared some information about the negotiation to buy Cover.com:

“We opened with a bid of $250,000 (which is still a crazy amount of money for a domain) and they just came back laughing at us. They counter-offered with $1.5 million and then $1 million, but it was still more than we were prepared to pay.

After a period of radio silence, we finally got the call proposing the price we would ultimately settle on. We would pay $750,000 plus commission between the two brokers, adding about $75,000.”

I reached out to Scott Day and Jay Chapman from Digimedia to ask them about the veracity of the article and to see if they have any comment about it. Digimedia is a privately operated business with a portfolio of exceptional domain names, and the company does not typically offer any comments about their sales or business. If the company has any comment about the sale, I will share them in an update.

Should Ron Jackson decide to add this to DN Journal’s 2017 sale report, the $825,000 sale will rank as the 9th largest publicly reported domain name sale of 2017. It will be just ahead of the $660,000 sale of SW.com and just shy of the $900,000 sale of the Purple.com domain name.

In my opinion, this is the key reason for why a brand should strongly consider buying its exact match .com domain name:

“We sell an intangible product and at the end of the day, we’re in the trust business. Owning Cover.com has lent an extra level of legitimacy to the brand and this, in turn, has translated into sales.”

Thanks to George Kirikos for sharing this via Twitter.

11 COMMENTS

    • I don’t agree because $825,000 is the figure they paid. Comparatively, an auction that sells for $100,000 would net the seller somewhere around $85,000 after commission and that would also be reported as the figure that was paid.

  1. I am impressed with the BUYER and the negotiation tactics they used after reading the article on Medium:

    “From my understanding, what these intermediaries did was provision the services of another broker to obfuscate the relationship between the seller and us even further. We effectively proxied through two brokers to communicate with the seller.”

    This sneaky method resulted in a 50% discount for the BUYER (750K plus broker fees) from the original 1.5 MILL price.

    I ask this same question all the time…. WHY would you the seller ask 1.5 million and then sell for 750k???
    Or why would you ask a price and then offer a 50% discount??

    A “win-win type deal” is something I would never consider.

    Great sale nonetheless, and congrats to the new owner. In the end the 825K price is a tax write off anyway :))

    • Because they probably were happy with 500k so they through out the line at 1.5 to see who bites. If they bite its a big win if they don’t it’s still a win.

  2. another great case study to show the value of high quality domains.

    So many companies go down the path of we’ll worry about getting the com later, after we achieve product market fit with revenues. (I did the same with one of my companies — we had all extensions but the .com and over 1 million users with much press coverage. Now the domain was worth over 7 figures, rather than the low 6 figures we could have offered to get the domain)

    and bottom line: a name like cover.com or ring.com or crypto.com (maybe for encryption not currency) always can be resold later — for a higher profit.

    I can understand if the company is forced to go lean with minimal or no funding. But if the company is profitable, and money is in the bank, get that domain,

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