DUDU.com Sold for $1 Million
elliotsblog.com
elliotsblog.com
"Much needed"? If that domain doesn't bring them $1mil in profit, questionable. (Although godudu.com does have a certain English-speaking ring to it.)
Has any of you heard about this dudu thing before? Is it the new color.com?
It's an example of excessive domain name costs, which - exactly as smackfu is saying - hampers startup's flexibility with names.
Excessive land costs hamper me from buying a beautiful home in my desired neighborhood.
So congrats on the fact the market does what it does? I'm not anti-capitalist, obviously products deserve market value, but that doesn't mean I'd cheer on something that makes startup's lives harder.
A certain well known funded startup wants a certain name. But the name is owned by google (and not in use). If a domainer owned the name it wouldn't be cheap but it would be possible.
Likewise the perfect name that a startup wants that is owned by a local distribution company with 50 employees isn't going to be had for a trivial amount of money either.
Startups who can't get the name they want always assume that nobody would have the name until they wanted it. And it would just be sitting there.
If you know the domain business you would realize that the people who own names (lots of names) know when to fold their hand and not wait possibly forever for another deal to come along.
dudu.com by the way has pretty consistent content (it's in chinese) that goes back to the 90's. So most likely it was an operating site and a company that had to be compensated. If this domain was owned by a domainer it would have sold for a 10th of the price or less.
Couple of factors:
1) Time-value of money. Say they could have gotten it for $30k before they started vs $1 million later. $30k when you're starting up can be "worth" more than $1MM when you're already killing it.
2) If you get big (like Dropbox) you own the namespace anyway. So even though the current owner has leverage over you (they have the only domain you want), you have leverage over them (you're the only potential buyer).
3) High chance the startup won't work out anyway or you'll want to pivot. Keep the cost of rolling the dice low.
The alternative is to give your product a less than ideal name. I think that's often a bad trade off which will be more painful to change later than acquiring the domain.
An excellent point which many people in the domain business fail to understand. The name becomes a bastard name and can't even pass to another buyer without potentially giving the "only potential buyer" a basis to file a UDRP once the ownership change takes place.