Buzzfeed published an article about the history of TMZ, the celebrity news website and media network. If you follow TMZ, you’ll probably find the article fascinating. In my opinion, the most interesting aspect of the article pertains to how the company (and its founder Harvey Levin) was able to acquire the TMZ.com domain name and for how much.
Here’s how the acquisition of the TMZ.com domain name went down, according to the Buzzfeed article:
“According to a staffer from that time, Levin called the owner up and offered $5,000 for the URL — but without revealing who he was or what, exactly, the URL was for. The guy jumped at the offer, but Levin, according to a source, also knew that if he showed up with the cash in his Porsche, the URL owner would immediately up the asking price. His solution: Borrow a staff member’s totally average car. Hand over $5,000 in cash. The URL — and the brand — was theirs.”
I bet cash deals like this happen more often than we hear about and are fairly common. Although I almost exclusively use Escrow.com when buying a domain name from someone, there are people who would prefer to do an all cash deal for a variety of reasons. If I can be assured that the deal will get done and I won’t get robbed, I would probably consider it, especially on a lower value deal. In fact, I did consider this recently, although the seller later agreed to use Escrow.com.
Sometimes a nice wad of cash can help a buyer close a deal, and it looks like $5,000 was what it took to acquire the TMZ.com domain name.
A multimillion dollar brand was lost. This is the possible the reason domain investors hold less fortunate buyers hostage to high prices. It is the Klout.com, Twitter.com and now TMZ.com that caused this trend.
Even anonymous buyers for UnderTheDome.com served up a cheap offer and acquired this domain without giving up their plans. Now this domain is the face of a popular show backed by Steven Spielberg and Stephen King.
These types of deals make it hard for domain investors who don’t own high profile domain names to cold-call and/or contact end-users. For the most part, these domainers get treated like scum. Go figure!
meant “possibly” in the first paragraph and “domains” after TMZ.com
It looks like Levin picked it up in Aug/Sept 2005. What was the killer is when “Warner Bros” showed up in the whois in Oct. 2005. OUCH.
In 2005, it was not unusual for a 3 letter .com (with a z) sell in the low/mid $x,xxx range. The clinger had to be ‘cash’. However, proof of ownership (did he have the right to sell it?) and the actual transfer could be tricky.
Over the years, ALL of us have sold a domain too cheap once we found out the final buyer.
Mr.Levin is lucky Rich Schwartz didn’t own TMZ.com.
I remember about 8 years ago, going out east on LI to sit with the owner of mylongisland.com, had a beer with him, chatted, gave him his check and I was then the new owner of the domain. One of the first and only in person meets for a domain purchase.
Well… now people know not to sell their names for cheap. Especially when the person making an offer wants to pick the domain up in person. The recent PDN.com sale to Paula Deen for $27,000 was a true tragedy for the owner. I don’t think enough domain owners stick to their gameplan, and many don’t even know where to start when it comes to negotiating a deal. Despite your recent article on domain brokering Elliot, I have had clients that are 12+ year domain registrants and they are afraid to negotiate or don’t even know where to begin. As a broker it’s our role to get the most for a client, know the law, and be a top notch salesman. Like you, I keep a small portfolio of names that await end users. I personally don’t own a LLL.com, but when I do, I can assure you that nobody will be acquiring it from me for any less than a massive mid six figure deal. I may be fully grey and in a wheelchair by the time that happens, but my children will thank me.
” I can assure you that nobody will be acquiring it from me for any less than a massive mid six figure deal. I may be fully grey and in a wheelchair by the time that happens, but my children will thank me.”
Unless 3 letter .coms are worth 7 figures by then 🙂
Haha, Very true!
>”As a broker it’s our role to get the most for a client, know the law, and be a top notch salesman”
Isn’t that only half the story, VP? Why is my experience that they seem to contact me on behalf of secret clients (yay, “my client”) hiding behind them for the purpose of getting the lowest possible price and buying dirt cheap? Do you guys really shoot straight in both directions? Is it “super domain – pay top dollar” when you are selling on behalf of a client, but “hey, Joe – $.99 is a good offer from my client” when you are buying on behalf of a secret buyer hiding behind you for the same domain?
If I were you, by the way, I’d let my fellow brokers know that hiding behind a broker is only going to make me more inclined to think it’s someone like Harvey Levin who can afford what it’s really worth, so the answer is still going to be what it’s really worth.
Been wondering about this for a while now since I get contacted a fair amount by these folks acting on behalf of “my client.”
I am not sure what everyone is distraught. The guy wouldn’t have sold the name for $5K if he didn’t want to. No one put a gun to his head. He made a deal, perhaps not the best, but he made it. Done. Move on. Its like selling a stock too low. You can kick yourself over an over again for selling, or you can just be happy that you made some money and move on. Seller’s remorse is wasted energy IMHO (although we all do it).
As the saying goes, no one ever went broke taking a profit.
Lesson: do you due diligence on a buyer the best you can. Sometimes you get taken. Sometimes you need to sell and cant help it. But don’t sweat it. There is still lots of opportunity out there.