Dan.com

domains Breaking: $90 Million Domain Sale Revealed

NameSilo
When I logged on to Twitter this morning, I was met with a tweet from domain investor George Kirikos claiming to have uncovered one of the most expensive domain transactions in history.

Edit: Article updated for accuracy. The domain deal is for $90,000,000 payable until 2040. Not $65 million as was previously announced.

After reaching his Twitter target of 10 Retweets, George Kirikos revealed details of the massive $90 million domain name sale. The information, which was revealed on George's Twitter page shows that LasVegas.com sold for a $90 million payment agreement in 2005, starting with an initial $12,000,000 fee.

This sale dwarfs any other domain name sale in public record. The highest domain sale recorded has previously been Sex.com for $13,000,000. Some media outlets claim insurance.com for $35.6 million in July 2010 is the highest domain sale of all time, but this was not purely a domain name purchase.

The SEC filing from Vegas.com LLC shows that they entered into an agreement to buy the domain name LasVegas.com. They initially paid a fee of $12,000,000 and will pay up to $90 million in total.

Here's a quote from the SEC filing:
In May 2005, the Company entered into a contract under which it agreed to pay $12,000,000 for exclusive right to use the domain name “LasVegas.com.” The contract term is 35 years. The Company is amortizing the domain name rights over 35 years. The Company is also obligated to make payments of approximately $208,000 a month


If Vegas.com LLC wish, they can stop paying for the domain in June 2016 and lose the right to use the name, or they can pay $208,000 per month until 2040. So far they have paid around $30,000,000 for the domain name (includes the initial $12 million payment and subsequent monthly payments).

Here is how the payments have been broken down:
  • An initial $12 million payment in May 2005
  • $83,000 per month for the next 36 months
  • $125,000 per month for the next 60 months
  • $208,000 per month for the next 36 months
After June 2016 (as mentioned above), Vegas.com LLC can opt to stop using the domain or pay $208,000 per month until 2040, bringing the total sale to $90,000,000.

LasVegas.com shows a fully operational website, displaying information regarding hotels, shows, and tours in Las Vegas. LasVegas.com has a global Alexa ranking of around 30,000 and shows up on the number 1 spot on Google for the search term Las Vegas.

Incidentally, NamesCon will be in Las Vegas in 2016. With this new information, it seems very apt that domain investors will flock to Vegas!
 
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GravityEleven

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90 mio now.. simply mindblowing..

would be interesting though to calculate how much has been paid so far, displaying the current sold price for the domain since it's an ongoing payment plan until 2040... meaning the domain will have been sold for 90 mio only if the buyer continues to pay up until 2040..

if not, then lower...
 

GravityEleven

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dordomai

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Note 7.
LasVegas.com Purchase Obligation
In June 2005, VEGAS.com, LLC entered into an agreement for the purchase of LasVegas.com. The agreement specified that a $12,000,000, one-time payment be made upon execution of the agreement along with monthly payments of approximately $83,000 for 36 months, $125,000 for the next 60 months, and then $208,000 for the next 36 months. Per the terms of the agreement, after June 30, 2016, following the 132 initial monthly payments, VEGAS.com, LLC in its sole discretion may terminate the agreement and forfeit the domain name. If VEGAS.com, LLC chooses not to terminate the agreement, they will continue making the monthly payments of approximately $208,000 until June 30, 2040, at which time the seller will transfer the domain name to VEGAS.com, LLC without further payment or cost to VEGAS.com, LLC. As of June 2005, the present value of the future payment obligations was determined to be approximately $12,264,000, using a discount rate of 6.25 percent. The initial $12,000,000 payment has been capitalized and is being amortized over 35 years, which is the term of the agreement. The present value of the future purchase obligation of approximately $12,264,000 was capitalized and is being amortized beginning July 2005 and ending June 2016, which is the period that VEGAS.com, LLC is legally bound by the agreement to continue making payments. Subsequent to June 2016, the agreement will continue on a month to month basis until June 30, 2040, and all payments made will be recognized as an expense. Minimum annual future payment obligations are as follows:
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LasVegas.com had "Stephens Media Intellectual Property" in the footer copyright from the early 2000's and the site remained more or less unchanged until the current iteration went live around November 4th, 2012. Seven years is quite a long time to leave the existing site up for it to be a domain only deal. I would bet the site, which was live since the late 90's, was pulling in deep six figures (or even low seven figures) per year.
 
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