Andrew Rosener on the sale of DX.com and domains for small businesses

Mike:
Hey, everyone, I’m Mike Sullivan. This is MO.com. Thanks for joining me. With me today is Andrew Rosener. He is the founder of Media Options and our subject matter expert on domain names. Andrew, thanks for joining me today. You’ve made quite a bit of news with the sale of DX.com. Can you tell us a little bit about the sale and some of the history around it?

Andrew:
I can’t go into great detail on the DX sale simply because we had an NDA on the sale. But essentially, we decided that we wanted to try our hand in the daily deal market. It’s a really hot market. There are a lot of acquisitions happening. So we stuck to what we know, and we know that great domains make great websites. It’s the foundation of great businesses. So we decided to acquire the domain name DX.com, and essentially our business plan was that we were going to test the market as an aggregator, so aggregating all the different daily deal sites into one site and providing people with one email per day for all those deals as opposed to getting, like in New York City there are 60 different deal sites. So that means you get 60 different emails every day, and nobody wants 60 daily deal emails.

So we were solving a problem, and we thought that DX.com was a great place to do online deal exchange. So we created an aggregator. We got a great development partner, and we used Logo.com for helping us to kind of brand it and creating our logo, obviously. We launched the site, and about five days later we were contacted by a Chinese individual interested in acquiring our site. I didn’t really take it very seriously. We went back and forth. They finally made a significant offer, but not an offer that was high enough that I would sell the domain and the website.

Ultimately, it took a few more days, and within 14 days from our launch date, we agreed on a price, closed a deal, and that’s it. Now DX.com is Deal Extreme, a company out of Hong Kong, one of the top 1,000 websites on the Internet. Some people gave me flack and said, “You only developed the domain name so you could sell it.” I said, “Well, of course. The only reason we went into the daily deal space is to get acquired.” I mean, that’s why you go into that space. You’re not going to compete against Groupon, but if you can make a splash, then somebody’s going to want to take you out of the game or acquire your subscribers or take your market share. If you’ve got a dominant domain name in the space, then they want that too. It was a good strategy. It worked, and we’re hoping to repeat it.

Mike:
What role would you say the domain name played in the acquisition?