Domains/28″/dt1st/mike2nd/mark2nd

By JENNIFER NETHERBY

Staff Reporter

What’s in a name? If it happens to be Drugs.com, about $823,000.

That was the price brokered a few weeks ago by Chatsworth-based GreatDomains.com and paid by a San Francisco Internet start-up that plans to launch an online pharmacy.

If that seems like a lot of money for just a Web address, the people at GreatDomains say it’s just the beginning. The company has other names on hand including Loans.com, Houses.com and Shoppingmall.com that could go for more than $1 million each.

“People are realizing how important this market is,” said GreatDomains President Jeffrey Tinsley. “The names are worth what people pay for them, as long as they know how to use it.”

Several years ago, as the Internet was starting to take off, savvy entrepreneurs paid $70 a pop to register what they thought would become the most popular domain names, believing they would be able to sell them at a profit in the future. Others bought names because they were planning to launch their own sites, only to later drop their plans and sell the reserved name.

GreatDomains doesn’t own these names itself; its model is similar to that of a real estate agency. People can list their domain names on the GreatDomains Web site for free and auction them off or post a set price.

If the name sells, GreatDomains makes a 7 percent commission (though it collected 10 percent in the Drugs.com deal).

GreatDomains allows anyone to list any name for sale, but once actual bidding comes in for a particular name, it undertakes a background check to make sure that name is legitimately owned by the seller and that the buyer has the financial wherewithal to pay the bid price.

For big-ticket names, background checks are conducted prior to the name being listed.

As of last month, more than 60,000 names were listed on the site, priced from $500 up to nearly $500,000. Tinsley expects the number of listings to double by September.

Buzz about the Drugs.com sale has pushed the number of new postings up to about 1,500 new names a day, he said. “This market will expand much, much further,” he said. “Twelve thousand to 13,000 new dot-com sites are registered daily (with Internet registries).”

Tinsley declined to discuss the company’s revenues or how many sites it has brokered. It started in 1996 as a side project of Multimedia Realty, a Beverly Hills company that ran one of the early Web sites to list homes and other properties for sale. (Multimedia now owns a minority position in GreatDomains.)

Sales were slow in the first few years, so Tinsley and his brother Jason redesigned the Web site, making it easier to search for names and linking it to Web registries, which allow Web sites to be registered for a fee. Since then, GreatDomains’ listings have exploded.

Network Solutions Inc., the Virginia company charged with registering domains, has more than 5.3 million dot-com names registered. And there is talk of creating new suffixes so more names can be added, such as .news or .store.

Brad Nye, executive director of the Venice Interactive Community, a Los Angeles Internet association, said he sees more companies struggling to track down whether their preferred names have been registered by somebody else.

“People are spending money,” Nye said. “If you’re building a long-term, brand-name business and it’s not established, you’d better have a strong name and have a name that’s easy to type in. That’s harder and harder to find.”

For that reason, popular commerce names are fetching hefty prices. One company shelled out $1.3 million for the name Wallstreet.com in January.

San Francisco-based Guru.com went so far as to hire an ex-CIA agent to track down a Web-site address owner, then forked over thousands of dollars for its domain name.

“We wanted a name that was short, hip, had some kind of relevance, and was memorable for people,” said Guru.com President James Slavet. “There aren’t that many good names left.”

The GreatDomains site allows users to type in a category and browse through the offerings. A search for clothes turns up sites such as clothesalz.com on sale for $450,000 or fashiondiva.com for $1,500. There’s also a section for “bargain” names starting at $500.

To help sellers determine a domain name’s worth, GreatDomain has devised a scale, posted on its site. The system is based on the number of characters in the name, the name’s ability to attract commerce and whether the address is a dot-com.

Fewer characters score higher, as do names with a better ability to attract sales (i.e., “cars” beats “camping”), and a “.com” scores better than other suffixes such as “.net” or “.org.” Trademarked names are worthless because of legal issues, although that hasn’t stopped people, known as “cybersquatters,” from trying buying up variations on trademarked names such as prudentialinsurance.com.

The generic one-word names are so valuable because some already attract people to the sites without company promotion. Drugs.com reportedly got about 4,000 hits a day, even though there was no Web site posted under that name.

The former owner of Drugs.com registered the name several years ago with big plans to start a new pharmaceutical company, Tinsley said. But those plans proved too challenging, so he sold.

“Most people who registered these names weren’t speculators,” Tinsley said. “Almost all bought the sites with plans to build all sorts of things and then found it was more than they could handle.”

Tinsley said the company is now starting to search for sites and sellers to add to its offerings, rather than just waiting for sellers to come to it.

And in the coming months, GreatDomains will start auctioning off not only Web domains, but Web businesses. Affordablefurniture.com, a Dallas-based Internet business, will be one of the first to sell not only its name, but its entire operation.

Even with a large selection of names, company officials have found, there are some things and names money can’t buy. Domains.com, the name Tinsley and others had originally sought for the name of their company, was snapped up before they could get to it so they took their second choice, GreatDomains.

“That’s why this works,” Tinsley said. “I spend hours searching registries trying to find a halfway decent name. The market needs this service.”