MicroStrategy CEO Comments About Domain Names

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MicroStrategy (MSTR on NASDAQ) held its earnings conference call on July 30, 2019. As you likely know, MicroStrategy sold Voice.com for $30 million in the second quarter of 2019. This was the largest all-cash domain name sale of all time, and it had an impact on the company’s earnings.

During the conference call yesterday, MicroStrategy CEO Michael J. Saylor made some comments about the sale of Voice.com. He also offered some insight about the valuation of domain names.

You can read the entire transcript on Yahoo Finance, but below is an excerpt with Mr. Saylor’s comments about Voice.com and the value of great domain names:

A final note on the Voice.com sale. I think there’s an emerging awareness that crypto assets or digital assets are real. There’s never going to be more than 21 million Bitcoin in the world. And as people start to think about that, and the fact that they can’t be inflated and that’s a limit, it gives value to that cryptocurrency argument.

I think if we consider the domain as an asset class, once upon a time, people thought that Voice.tv or Voice.bu or a Voice-dot-something-else would matter. And it turns out it doesn’t. Voice.com matters, and we have pretty good evidence here that the difference between Voice.com and Voice.io or Voice.it or Voice.net, was $30 million. That’s the difference, because that’s what we sold it for. If it had been an open auction with multiple various bidders, that might have been more.

So when you go on Google, and you Google something like voice, you get 2.4 billion hits. If you Google Nike, you get 2 billion hits. The value of a great name, especially a dot com name is amazing because it catapults you above 2 billion other pages. Anybody that ever saw an ad that said Voice.com on it would remember immediately how to find that brand.

And so these things are great. They’re great assets for branding a network or branding a mobile app or branding a consumer application. And we own — we literally own hope in the English language. I mean, how would you like to own hope? We own Hope.com, H-O-P-E. It’s a noun. It’s a verb. It’s a name. You could use it to brand all sorts of things. We own Emma, and Usher, and Strategy, and Speaker. We own Michael. We own William. Most of these generate multiple billion hits if you type them into the Google Search machine. And a strategy will get you billions of hits.

So I have a belief that, at some point, sometime in the future, we’ll find well-endowed, well-capitalized companies that wish to rebrand themselves or wish to rebrand a product or a service with a really compelling name, and when they do, then we’ll monetize some of these other assets. Until then, we’re very patient with regard to these investments. And just like with the other things we’re doing on our business, we take the long view. And we just focus upon making sure that we provide value to the customer.

Notably, MicroStrategy still owns a small portfolio of valuable generic domain names, including Wisdom.com, Alert.com, Strategy.com, Hope.com, and others. When I put these names in a poll, readers felt that Alert.com, Hope.com, and Strategy.com are MicroStrategy’s most valuable domain name assets.

Thanks to Mike Sallese for sharing this article with me.

22 COMMENTS

  1. “I think if we consider the domain as an asset class, once upon a time, people thought that Voice.tv or Voice.bu or a Voice-dot-something-else would matter. And it turns out it doesn’t. Voice.com matters,(…)”

    BINGO

    • 100% right on that. Going back 20 years people were more accepting of .net or .org, and .tv was seen as something with potential by some. The failure of new tlds has now pushed things to a tipping point. People no longer reference new tlds when inquiring about .com’s. People know they have failed to get traction and .com is the only game in town.

  2. Rick Schwartz said 20 years ago, if I remember the quote correctly, that one day great domains would regularly sell for $20-30 million or more. It’s all related to the amount large companies spend on advertising and the value of having a stellar domain at the center of that advertising. I think the sky’s the limit but we need to abolish the notion that organizations with a trademark should have a right to corresponding domains, which can always be used in a non-trademark-infringing way. That notion underlies the corrupt, in my opinion, UDRP procedure and legislation like ACPA, by which no domain is completely safe, which naturally keeps the market down.

    • Almost everyone, myself excluded, seems to think they have an 8 figure domain name. Sadly, most of those people myself excluded again, will go their entire career without so much as a 6 or 7 figure sale.

  3. Well Elliot, I’m glad you shared this, and after yesterday’s rx.com thread all I can say is I sure wish you also agreed with this “insight about the valuation of domain names” the way the other commenters here do.

    • John, that other thread is a learning opportunity for you. Don’t stick your head in the sand, Elliot has nailed it on RX.com. Some names look great but don’t really have the beans.

      • LOL. Scary too, Snoop. Honestly, I’m not that interesting or important. First you backpedal in the thread in front of the whole world after I make the mistake of showing you some love, then you come here and play this little game. Heavy. The cause for us all is more important than your personal obsession, but sadly you don’t see it that way apparently. However, I would invite you to go back to the RX.com thread and let all those other commenters know what a learning opportunity it is for them too, especially the ones who commented before I did. Later…

        • John, lots of people see a domain, think it is amazing and think someone is going to pay $10million for it. When I first saw this sale I thought it was way better than it really is also. Takes research to really see the full picture sometimes and I think Elliot has got it right on this name.

          Still wait for you or anyone too actually say who the obvious endusers are for this name, people who would badly need it or be desperate to buy it. I don’t think there is and that has been reflected in the fact that it only got fractionally more than a bog standard 2 letter .com.

  4. They sold this very well obviously, and the buyer massively overpaid. It is akin to a funny money transaction, because it has come from crypto but the company cashed in almost all their chips for US dollars before it crashed. It is a bit like the dot com crash where some founders sold out of worthless companies in the months before the peak and were in a very unusual place afterwards.

    I think Microstrategy are kidding themselves if they think an auction could have yielded similar or better results, it would have been a 300-500k sale.

    Personally I doubt they will sell another name and it will be a decade or two before this sales gets beaten. It will push up prices of one word .com’s though.

  5. We were about to sign up with MicroStrategy for some of their software offerings. Didn’t realize this is the same company that owned Voice.

  6. It’s somewhat understandable that regulators, in the 1990s, reasoned it was in the public interest for big companies to be at their corresponding dotcom domain so people could easily find their website, but under pressure from the IP lobby, I imagine, they opened up a Pandora’s box whereby most domain disputes, if I’m not mistaken, involve companies which are not that well known and have a mark which others could also use in a different region or line of business – and where the inexpensive UDRP process is a temptation for small companies to try to usurp domains they don’t even have a right to under the current regulations, with decisions often being somewhat arbitrary and contradictory between cases. Meanwhile, companies which become very large still have no right to the corresponding dotcom (and shouldn’t, I think most people would agree), like Tesla which had to pay $11 million, I believe it was, for Tesla.com. The best solution, again, I think, is to scrap the idea that any party should have a right to any domain and simply let there be a free market. It would save countless hours of work for no good reason, often with a horrible result, and companies could still bring suit for trademark infringement on the Web, just as they always could and still can for infringement in other mediums. Sorry if this seems to be off topic but I think it definitely affects the amounts which domains sell for. Right now it’s risky to even buy a completely generic one-word domain registered long ago without conducting an international trademark search first to see if a corresponding mark has been obtained since then, as the wonderful regulators have decided that an ownership change resets the clock and can be considered an act of “bad faith.” Ridiculous.

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