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THE WAY WE LIVE NOW
THE NEW ECONOMY
Unreal Estate

Internet stocks may no longer be soaring, but the market for Web addresses is getting tighter all the time. By JOHN COOK

SITE SELECTION John Cook goes looking for a Web address, but finds the most obvious permutations of his own name have already been snapped up. Cook.com "It's not for sale," says its owner, Scott Day, a former watermelon farmer in Oklahoma who has plans to start a cooking Web site. Not for any sum? "I don't think it would be affordable to you. It wouldn't be affordable for any individual." Cook.net "If it were just a cash deal, I'd have to hold out for $25,000," says David Cook, a Florida investor who once owned the phone number 1-800-PHONECALL, which he sold for $25,000. Cook.org "I'd probably sell it for upward of $10,000," says Steve Anderson, the C.F.O. of a Silicon Valley company. "I think the dot-org domain names are worth a lot less. A dot-com domain name is worth 10 times a dot-org, potentially. It's all in what the buyer's willing to pay for it." John.com Network Solutions has the address registered to a John Little of Cupertino, Calif., but efforts to contact him were unsuccessful. eCook.com "We're building a prototype of a very cool cooking site, targeted more toward pop-culture," says Firas Bushnaq, who heads a firm known as Ecompany and maintains that the name is not for sale. But if it were? "Anywhere from $100,000 to $200,000." Cookweb.com "It was something that I tried to do, and just didn't have time with school," says Timothy Cook, a 16-year-old from West Melbourne, Fla. "I couldn't see charging more than the price it cost me, which is $100. I'd have to talk to my dad." Jcook.com "I registered the domain name for a friend of mine a few years ago," says Rodney Joffe of Phoenix. "He has yet to use it, but keeps making noises. He has rejected offers because he really wants it for himself, but my guess is that he'd probably settle for a couple hundred dollars."

arlier this month, the Internet domain name www.drugs.com -- just the name, nothing else -- was sold to an anonymous buyer for $823,456 (which works out to about $103,000 per letter). It was not the highest sum ever paid for a domain name (many addresses, including wallstreet.com and bingo.com, have fetched $1 million or more), but it is evidence of how the supposedly limitless World Wide Web is running short on real estate.

According to Network Solutions, a company that registers domain names, all you need to secure a home on the Web is $70 and an unclaimed name with no more than 22 characters. But that's not as easy as it sounds: although a Network Solutions representative says quality domain names are "limited only by the imagination," most experts agree that all the good names have been taken -- by enterprising visionaries hoping to turn a $70 investment into a retirement fund.

What makes a good name? For starters, dot-com is the essential suffix. Dot-net and dot-org just can't compare. Jeffrey Tinsley, the C.E.O. of Great Domains, the company that brokered the sale of drugs.com, explains: "Drugs.org or drugs.net are worth something to someone, but dot-com is the Internet's Rodeo Drive." (Of course, any speculator knows that today's slum can be tomorrow's hot neighborhood; Great Domains' parent company holds the rights to wallstreet.org.)

Domain names emerged as an object of intense speculation around 1996, the year Great Domains was founded. The people who got in the game early often just stumbled across the idea. A typical case might be Scott Day, an Oklahoma watermelon farmer who in 1997 registered watermelon.com -- and in the process sensed a business opportunity. He quickly snapped up several food-related names (including cook.com, desserts.com and barbecue.com), envisioning a Web-based culinary empire. "Over 500 people a day type in 'cook.com' looking for recipes," says Day, who gave up growing watermelons.

Many entrepreneurs control large blocks of sites. Rick Schwartz, a Web developer in Boca Raton, Fla., who was introduced to the domain game as an operator of adult-entertainment sites, has more than 3,000 titles, including fishingtackle.com (which cost him just the $70 registration fee), sneaky.com ($3,000), men.com ($15,000), abuseexcuse.com ($70, after hearing the term used on CNN in reference to Hillary Clinton) and d-i-v-o-r-c-e.com (for $70, not in honor of the Tammy Wynette classic but because it would read well on a billboard). Though he's not in the habit of selling domain names -- he intends to develop businesses around all his sites -- Schwartz did accept $100,000 for the rights to eScore.com (from Kaplan Education Services, the college-board prep company). "I bought my mother a condominium on the beach," he explains.

Other high-stakes addresses acquired in the domain name rush include art.com (sold for more than $450,000) and rock.com ($1 million). Addresses with an 'e' or an 'i' before them -- like etoys.com -- are also considered hot; those preceded by a number (4drugs.com) are getting there, too. Even misspelled versions of famous addresses -- like amazom.com and yahpp.com -- can turn a profit, since they guarantee a certain amount of traffic based solely on typos. No niche market is too obscure to attract speculators. "I've seen someone trying to sell ostrichmeat.com for $5,000," says Ellen Rony, co-author of the "The Domain Name Handbook."

Internet experts believe that sooner or later the naming system will have to change to accommodate the Web's growth. Until it does, however, promoters are hungry for any address that will attract traffic, even if it's from people who land there accidentally. "I know of a young boy who wanted to check on a Nintendo game called Zelda," Rony says. "So he typed in zelda.com, and guess what? It's a porn site. And he got into trouble for that from his school. How could he know? It's a messy business."

Table of Contents
August 22, 1999