In this week’s Inside Interview, we have the opportunity of learning more about one of the most high-profile seven-figure domain name sales in recent history. On March 6th 2014, DNJournal’s Ron Jackson broke the news that 37Games had spent $2.1 million to acquire the domain name 37.com, one of only 100 two-number .COM domain names in existence.
The company originated in China as 37Wan, but as part of 37Wan's worldwide expansion and new global strategy, the company acquired 37.com and changed their name to 37Games. Below, we speak to the team at 37Games about their purchase, why they spent $2.1MM on the domain name, and how negotiations progressed to be able to close the deal successfully.
This is a rare insight into a seven-figure domain name sale from the buyer’s point of view.
NP: Can you tell us about the company behind 37.com?
37.com: Sanqi Interactive Entertainment (Shanghai) Technology Co., Ltd, or 37Games in short, was established in 2011. It is one of China’s Top 30 Internet Companies and Top 10 Game Platforms. The company is registered in Shanghai and has offices in Beijing, Guangzhou, Wuhu, Chengdu, Hong Kong, Taiwan, Korea, and some western countries.
Specialized in publishing browser-based and mobile games, we are also very active in developing our own in-house games, such as Archangel. Under the name 37Games, we have 37.com, 6711.com, and some other online game platforms we use for publishing our content.
37Games is now one of the Top 10 game publishers in the global market with over 100 million RMB in monthly revenue, more than 7,000 servers in total, and over 42 million registered overseas users. Our gaming platforms cover North America, Europe, mainland China, Hong Kong, Taiwan, South Korea, and Southeast Asia.
We devote ourselves not only to developing and publishing browser and mobile games, globalizing Chinese games and localizing them to specific countries, but also entertainment businesses such as film, anime, and VR. In short, we are building a worldwide leading Interactive Entertainment platform.
NP: 37Games acquired 37.com for $2.1MM. Why did you choose to buy such a valuable name?
37.com: We did so for several reasons.
First, for a better user experience. A shorter domain name is easier to search for and remember. Meanwhile, the new domain name is quite similar to the original one, so our existing players won’t find it difficult to make the switch.
Second, it’s an adjustment to fit the company’s new targeting strategy. We are entering the global market, but the original domain name is not easy to understand for players from countries other than China. Therefore, we found it necessary to adjust it.
Also, we changed our domain name for promotional reasons. The new domain name has an advantage over the original one in many perspectives, and we think it will help us acquire new players more easily, even in the local Chinese market.
NP: Was acquiring 37.com important in your expansion to a global market?
37.com: Acquiring 37.com does mean a lot to the company. We are now targeting the global market, and the first step is to make ourselves known to the target customers. “Wan” in “37wan.com” means “play” or “gaming,” but for players from outside of China, the word “wan” probably wouldn’t make any sense. To break this language barrier, we decided to use numbers only, which is almost universal and is very easy to remember.
NP: How did you find out that 37.com was available to buy? Was it offered to you, or did you seek it out?
37.com: Having decided to acquire the new domain name 37.com, we searched for the original owner’s email address on WHOIS.net and contacted them by sending an email by ourselves as well as through a domain trade platform. The original owner was reluctant to sell the domain name, but we were determined. Our company formed a team of talents from marketing, law, financial, and technical divisions, and made negotiations with the original owner for almost half a year. Finally, they agreed after difficult negotiations and made the concession.
NP: How did you determine that the domain was worth $2.1MM to you?
37.com: Acquiring 37.com was of great strategic importance to 37Games. We really needed a universally accepted name that also had a perfect association with our brand name 37Games. 37.com was our best choice. Meanwhile, we did comprehensive evaluations on the price, including using the regular methods such as Google PR and Alexa, as well as some comparisons and appraisals based on the published [domain sales] prices.
NP: Would you have paid more for this domain name if necessary? If yes, how much would you pay?
37.com: The seller's initial asking price was $5MM. We made great efforts to convince the seller to lower the price to $3MM. The seller insisted on the $3MM price, and we didn’t have much time before March 7th, 2014, the day we planned to change and announce the new domain name. However, we were confident that we could reach a deal and the price $2.1MM was settled out of careful evaluation and in-depth negotiation.
NP: Many Chinese companies such as yourself, JD.com, and VIP.com now use short, memorable domain names. Why are short domains so desirable for Chinese companies?
37.com:
1) The domain name is critical for online platforms and companies that rely on internet avenues. It is an important part of a brand. We not only needed to make our customers love our brand, but also needed to let them get used to our domain name.
2) A shorter domain name is easy to remember, convenient to input in the address bar, which will directly increase the number of visits. Also, such domain names have a great advantage on mobile devices: visitors can just tap a few letters or numbers and visit the website easily even on a mobile-phone browser.
3) In addition to promotion reasons and convenience to users, a short and neat domain name can make it easy for an online platform to build subdomains. For example, bbs.37.com is also easy to remember, but bbs.37wan.com would be too complicated for users.
NP: Has changing from 37wan.com to 37.com been a successful move for your company?
37.com: Changing from 37wan.com to 37.com was a strategic move to make 37Games more international. First of all, the new domain name made it easier for players from different parts of the world to accept our brand 37Games.
We didn’t have to spend time or resources for players to understand or remember our domain name. We began to use 37.com just before entering the European and American market. Therefore, we were able to focus more on other critical aspects of our overseas expansion. We are also planning to enter non-English speaking countries like Spain and Poland, and the use of such a universally acceptable domain name matches our development and expansion strategy.
Overall, the change has been crucial and helpful in making 37Games an international brand.
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Thanks to 37.com for providing insights into their acquisition. I think that the power of numbers from a global branding point of view are still under used and underrated. Do you agree? Have your say in the comments below.
Please note that whilst other statistics value this sale at $1,960,800, it was confirmed to me by the buyers to be $2.1MM.
Inside Interviews is a blog series profiling the buyers of high-value domain names. Find out their motives, negotiation tactics, and their opinions on popular domaining topics only on the NamePros Blog.
The company originated in China as 37Wan, but as part of 37Wan's worldwide expansion and new global strategy, the company acquired 37.com and changed their name to 37Games. Below, we speak to the team at 37Games about their purchase, why they spent $2.1MM on the domain name, and how negotiations progressed to be able to close the deal successfully.
This is a rare insight into a seven-figure domain name sale from the buyer’s point of view.
NP: Can you tell us about the company behind 37.com?
37.com: Sanqi Interactive Entertainment (Shanghai) Technology Co., Ltd, or 37Games in short, was established in 2011. It is one of China’s Top 30 Internet Companies and Top 10 Game Platforms. The company is registered in Shanghai and has offices in Beijing, Guangzhou, Wuhu, Chengdu, Hong Kong, Taiwan, Korea, and some western countries.
Specialized in publishing browser-based and mobile games, we are also very active in developing our own in-house games, such as Archangel. Under the name 37Games, we have 37.com, 6711.com, and some other online game platforms we use for publishing our content.
37Games is now one of the Top 10 game publishers in the global market with over 100 million RMB in monthly revenue, more than 7,000 servers in total, and over 42 million registered overseas users. Our gaming platforms cover North America, Europe, mainland China, Hong Kong, Taiwan, South Korea, and Southeast Asia.
We devote ourselves not only to developing and publishing browser and mobile games, globalizing Chinese games and localizing them to specific countries, but also entertainment businesses such as film, anime, and VR. In short, we are building a worldwide leading Interactive Entertainment platform.
NP: 37Games acquired 37.com for $2.1MM. Why did you choose to buy such a valuable name?
37.com: We did so for several reasons.
First, for a better user experience. A shorter domain name is easier to search for and remember. Meanwhile, the new domain name is quite similar to the original one, so our existing players won’t find it difficult to make the switch.
Second, it’s an adjustment to fit the company’s new targeting strategy. We are entering the global market, but the original domain name is not easy to understand for players from countries other than China. Therefore, we found it necessary to adjust it.
Also, we changed our domain name for promotional reasons. The new domain name has an advantage over the original one in many perspectives, and we think it will help us acquire new players more easily, even in the local Chinese market.
NP: Was acquiring 37.com important in your expansion to a global market?
37.com: Acquiring 37.com does mean a lot to the company. We are now targeting the global market, and the first step is to make ourselves known to the target customers. “Wan” in “37wan.com” means “play” or “gaming,” but for players from outside of China, the word “wan” probably wouldn’t make any sense. To break this language barrier, we decided to use numbers only, which is almost universal and is very easy to remember.
NP: How did you find out that 37.com was available to buy? Was it offered to you, or did you seek it out?
37.com: Having decided to acquire the new domain name 37.com, we searched for the original owner’s email address on WHOIS.net and contacted them by sending an email by ourselves as well as through a domain trade platform. The original owner was reluctant to sell the domain name, but we were determined. Our company formed a team of talents from marketing, law, financial, and technical divisions, and made negotiations with the original owner for almost half a year. Finally, they agreed after difficult negotiations and made the concession.
NP: How did you determine that the domain was worth $2.1MM to you?
37.com: Acquiring 37.com was of great strategic importance to 37Games. We really needed a universally accepted name that also had a perfect association with our brand name 37Games. 37.com was our best choice. Meanwhile, we did comprehensive evaluations on the price, including using the regular methods such as Google PR and Alexa, as well as some comparisons and appraisals based on the published [domain sales] prices.
NP: Would you have paid more for this domain name if necessary? If yes, how much would you pay?
37.com: The seller's initial asking price was $5MM. We made great efforts to convince the seller to lower the price to $3MM. The seller insisted on the $3MM price, and we didn’t have much time before March 7th, 2014, the day we planned to change and announce the new domain name. However, we were confident that we could reach a deal and the price $2.1MM was settled out of careful evaluation and in-depth negotiation.
NP: Many Chinese companies such as yourself, JD.com, and VIP.com now use short, memorable domain names. Why are short domains so desirable for Chinese companies?
37.com:
1) The domain name is critical for online platforms and companies that rely on internet avenues. It is an important part of a brand. We not only needed to make our customers love our brand, but also needed to let them get used to our domain name.
2) A shorter domain name is easy to remember, convenient to input in the address bar, which will directly increase the number of visits. Also, such domain names have a great advantage on mobile devices: visitors can just tap a few letters or numbers and visit the website easily even on a mobile-phone browser.
3) In addition to promotion reasons and convenience to users, a short and neat domain name can make it easy for an online platform to build subdomains. For example, bbs.37.com is also easy to remember, but bbs.37wan.com would be too complicated for users.
NP: Has changing from 37wan.com to 37.com been a successful move for your company?
37.com: Changing from 37wan.com to 37.com was a strategic move to make 37Games more international. First of all, the new domain name made it easier for players from different parts of the world to accept our brand 37Games.
We didn’t have to spend time or resources for players to understand or remember our domain name. We began to use 37.com just before entering the European and American market. Therefore, we were able to focus more on other critical aspects of our overseas expansion. We are also planning to enter non-English speaking countries like Spain and Poland, and the use of such a universally acceptable domain name matches our development and expansion strategy.
Overall, the change has been crucial and helpful in making 37Games an international brand.
--
Thanks to 37.com for providing insights into their acquisition. I think that the power of numbers from a global branding point of view are still under used and underrated. Do you agree? Have your say in the comments below.
Please note that whilst other statistics value this sale at $1,960,800, it was confirmed to me by the buyers to be $2.1MM.
Inside Interviews is a blog series profiling the buyers of high-value domain names. Find out their motives, negotiation tactics, and their opinions on popular domaining topics only on the NamePros Blog.
