How much can you pay for a domain name? Registering a new domain name for one year costs just a couple of dollars. Even a registration for 10 years can cost less than $100. So buying a domain name for $350,000 may seem more than just a little over the top for some.
Yet that was the amount paid for the domain Color.com. The sale was facilitated by GoDaddy in December 2010. At the time, the buyer was unclear. Details have been slowly emerging that this was just part of an elaborate strategy heralding the entry of an ambitious start up pushing the frontiers of social networking and smart phone use.
Color.com was bought by a photograph-sharing phone app developer. The Silicon Valley start up has $41 million in funding from among others Sequoia Capital, a firm renowned for its investment in tech leaders Apple and Google. The Color.com app allows smart phone users to share photos and comments with persons (friends or strangers) within 150 feet and that are running the same app on their phone.
It is already being cited as the perfect fit for weddings, birthday parties and music concerts. A free app for the Android and iPhone, Color.com seeks to make social networking ‘social’ by facilitating interaction and conversation between people in the same location.
The same start up has also bought the domain Colour.com for an undisclosed amount although sources have placed the purchase at anywhere between $80,000 and $120,000. This would bring the total spend on prime web addresses to about $450,000.
Though this may look like extravagant spending, domain names are a powerful brand and rarely drop in value after purchase. Even if the Color.com app fails to take off as per the company’s expectations, the domain name can realistically be sold for at least the same amount – that is unless an extraordinary action or incident severely and irreparably damages the domain’s reputation.
Color.com is not even the most expensive domain sale of 2010. One site places the sale at 21st place on a known-sales list topped by sites like Sex.com that was sold for $15 million and Slots.com that went for a hefty $5.5 million.