Communicate Acquires Y Combinator Startup Auctomatic, Unveils New Business Strategy | Hacker News Reader

Communicate Acquires Y Combinator Startup Auctomatic, Unveils New Business Strategy

techcrunch.com

91 pointspaulsb39 comments

I am surprised by the disdain for profitable business in the techcrunch article:

I’m not even sure I’ll remember to check in on them. The domain business is a cash cow but isn’t exactly exciting stuff.

I would have put it the other way around: the business isn't exactly exciting but it's a cash cow. Except I wouldn't say that at all. A profitable online business sounds more exciting to me than 90% of what I've seen on techcrunch.

I think domains like these were important in web1.0 era. But who has ever gone to business.com. Who cares about it? It sounds old and boring. I'd be surprised if the number of people going to domains like perfume.com is increasing... If you look at alexa rank over 5 years it seems to have hit it's peak a while ago. Same with business.com.

I think techcrunch was simply meaning the domain business is likely a shrinking market, and not a new and exciting growing market.

Having said that, there's plenty of money to be made. Congrats on the sale :)

Goodness no! Internet usage is rising, and since browsers are helpful enough to add "www." and ".com" if you type a word in the address bar, common word domains like perfume.com, candy.com, etc are extremely valuable because people find them on their own. Most people aren't that savvy and they don't know the difference between the search bar, the address bar, or the bajillion toolbars they have installed.

The supply/demand equation you need to look at is: supply of common english words is fixed while internet usage is increasing. People aren't looking for business.com, they think they're searching for business.

So alexa is wrong?

Wouldn't there be an argument to say that in the past people used to put 'perfume' in their browser address bar, and perfume.com etc,

whereas now most people seem to think google is where you 'put stuff', and so aren't the google results for 'perfume' more important than the domain perfume.com?

>so aren't the google results for 'perfume' more important than the domain perfume.com?

Yes, but perfume.com is also #2 on google for perfume!

A quietly profitable domain trading business is apt to be an unreliable source of headlines for TechCrunch.

Congrats. Nice to see the brits doing well.

Found a short interview as well: http://venturebeat.com/2008/03/26/communicatecom-buys-e-comm...

/ Obligatory offence taken at us Irish being lumped in with the British :)

Really though paulsb, don't do that.

Not sure if you are allowed to disclose it, but I was curious what share of the $5 million was cash and what share was stock, and how much (percentage-wise) did the founders themselves end up with?

2 million cash

3 million stock

Not sure about the founder split

Congrats :) Slick idea... I remember pg saying he considers EBay ready for a startup competitor, but this seems a better strategy, even though it doesn't solve all problems.

True, it doesn't solve all the problems, but taking on EBay one vertical at a time using a great domain for each field might be a very powerful strategy.

EBays greatest moat is the sheer number of sellers and buyers it has, instead of trying to fight the entire EBay network, you take them on one vertical at a time. And maybe later after you've captured enough verticals try to consolidate all the vertical sites into a single property.

Woot! Congrats, guys.

I had a hunch you'd do well. It's a field ripe for the picking. Ebay has a lot of customers, and their interface leaves a little to be desired, and their API really looks pretty decent. Good job.

I like the new business plan – put shopping sites on great domain names. It isn’t exciting but it sounds profitable.

Congrats on the buyout! I hope you all made a bundle.

Techcrunch says: "$5 million in cash and stock."

I apologize if I'm putting a damper on the congratulations, but it sounds exactly backwards: it seems like the reason to start a shopping site in a vertical should be because you have insight or value-add in that vertical, not because you own a domain name.

A good domain = lots of free traffic. No marketing, spending on adsense, etc required. It is a very valuable asset.

No question. But ultimately the underlying value of the service is what determines whether it matters or not.

If you wanted to win a significant share of the search engine market, which would help you more, owning search.com, or designing a search engine that was actually better than Google in a way that users can perceive?

No - ecommerce is about connecting buyers with sellers. The domains capture the intent, auctomatic provides the inventory to take advantage of that intent.

Powersellers used to be tied to eBay, now they can connect to huge vertical audiences that are tied to their intent to purchase hence increasing their sales. Makes a LOT of sense this.

that might become less true as we move from away from typing out domain names and towards searching for keywords

Gonna miss seeing the guys at events here in the valley, but good for them. I'm surprised it took this long for someone to snap them up.

we'll still be around, we're going to be splitting our time betweeen the valley and vacouver rather than moving there permanently.

we structured the deal in a way that keeps our US visas intact exactly for that purpose.

Here's a rather poor writeup of communicate.com's stock: http://blog.valueinvestingcongress.com/2008/01/04/a-diamond-...

I met the founders at eBay live, congratulations on a job well done :)

I suppose this means the Auctomatics aren't aiming for eBay anymore? Acquisition is nice, but repositioning for domain trade isn't that slick of a score for the hackers.

i should think we'll spend more of our time building than trading

so who does the hacking?

Many congrats guys!!

Congrats guys, that's awesome news!

Congrats guys

big props and well deserved

Nice exit!

Way to go!

congrats! great idea...

congrats guys

kudos!

congrats - another payday for pg & company.

It’s small ($300,000 - $500,000 for YCombinator, pre-tax, I’m estimating), but it’s nice to see that YCombinator is self-funding.

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