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James Iles

Why Did Vivo Pay $2.1 Million for Vivo.com?

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By James Iles, Nov 7, 2016
  1. James Iles

    James Iles NamePros Writer PRO Gold Account VIP Trusted Blogger

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    Yesterday, we brought you the news that Vivo.com had been acquired by a Chinese smartphone company for $2.1 million. The news, courtesy of George Kirikos on Twitter, created quite a stir with many people asking why a company would pay that much to buy this name.

    There were a number of investors noting that similar names have sold for mid to low six figure price tags. Veda.com, Logo.com and Mojo.com have sales prices of between $1000,000 and $500,000. So why would Vivo.com be worth $2.1 million?

    There are several reasons that could be put forward to explain the price. Aside from the literal translation of "vivo" meaning "alive" in Spanish, and the fact that Vivo is a great brand name, I believe there are three main factors in the $2.1 million valuation.

    vivo.jpg
    The first is the company that sold Vivo.com, Real Networks. They are a software company with over 1,000 employees, and posted $31.1 million in revenue last quarter.

    They also have cash and short term investments totalling over $80 million and a domain portfolio that includes real.com, listen.com and rbn.com. I'm sure that they receive regular offers on their names, but selling will not be a high priority for them. I should imagine that acquiring a name from an established company would require a seemingly excessive figure that will make the company motivated enough to be interested in selling.

    The second factor in this price is the company buying the name. Vivo is a smartphone designer and developer and is considered to be one of the top 10 largest smartphone developers in the world. Their parent company is BBK Electronics, a 21 year old company that, according to reports, employs over 17,000 people and owns over 10 hectares of land dedicated to their factories.

    According to LinkedIn, Vivo employs over 10,000 people and teamed with Marvel to sponsor Captain America: Civil War. Paying $2.1 million to get a globally recognised domain name in light of their global sponsorship deals is a small price to pay.

    As of the 2nd quarter of 2016, Vivo, along with BBK's other major brand Oppo, were in the top 5 smartphone makers worldwide. Both Vivo and Oppo have overtaken Xiaomi and Lenovo in terms of market share. You may be familiar with Xiaomi, as they acquired Mi.com for $3.6 million in 2014.

    This brings me to the final point, which is necessity. In 2014, Xiaomi bought Mi.com as part of their expansion into international markets. Before purchasing Vivo.com, Vivo operated on VivoGlobal.com for their international website, and Vivo.cn for their Chinese site.

    Now, with Vivo.com, they can expand their brand internationally with a short domain in a globally recognised extension. Aside from this, there's also pressure on large Chinese brands to acquire the .COM version of their name.

    In my latest book about Chinese domaining, George Hong of Guta.com told me:
    This questioning by potential customers is partly the reason why Qihoo 360, who previously used 360.cn, paid a reported $17 million to buy 360.com.
     
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  4. James Iles

    About The Author — James Iles

    Writer for NamePros.com. For all inquiries relating to stories and interviews, please email: [email protected]

    This is James Iles's 280th blog post on NamePros. View all blog posts

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  5. Comments (16)

  6. disaac81

    disaac81 Active Member VIP

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    Dot com rules.

    Brand power.
    Brand presence.
    Brand perception.

    It's all in the name.
     
  7. DU

    DU Secret Santa VIP

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    Your post in 15 words:

    Name is trademark.
    Name is generic.
    TM holder has cash.
    Name holder strong negotiating position.
     
  8. DU

    DU Secret Santa VIP

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    Above would have made more sense in 16 words, to be fair.

    But other versions:

    Company wants name enough to spend $2.1m.
    Company has $5m to spend and Company settles for $2.1m
    Company had $2.1m budget and that was it and other Company didn't need name.
    This ISN'T a domainer deal so normal financial logic goes out the window

    Other speculative versions:

    Company Offer $1m. Company said $3.3m. Company said meet you half way.

    This is so much fun. I should blog.
     
  9. Grilled

    Grilled MIA VIP

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    Other random, overlooked, and useless info about Vivo.com

    (1) In the early 90's Vivo Software (vivo.com) was a pioneer in internet streaming services. Hence, the below backlink example. Content from 1996 was once produced via Vivo. They were acquired in 1998 by Real Networks (real.com) Under the agreement, all outstanding shares of Vivo will be exchanged for 1.1 million new RealNetworks shares, which are valued at $17.1 million based on current market value.

    (2) Vivo.com 1.3 mil Alexa rank. The 1st alexa backlink being:

    upload_2016-11-7_13-18-27.png

    Which leads to a article of Bill Clinton winning the 1996 presidency. HERE

    upload_2016-11-7_13-20-3.png

    (3) Vevo.com is a gigantic video hosting service owned and operated by a joint venture of Universal Music Group (UMG), Google, Sony Music Entertainment (SME) and Abu Dhabi Media.

     
  10. elevator

    elevator DnCombo.com VIP

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    Great!!! Very interesting episode. Thanks to @Jmaes Iles
     
  11. eko prasetio

    eko prasetio Active Member VIP

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    very big money...
     
  12. decode

    decode Established Member

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    They paid it because they could.
     
  13. decode

    decode Established Member

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    Most people still don't realize the true value of the optimal domain for their business.
     
  14. forge

    forge Hi friend VIP

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    This is a funny comment coming from me, but I have to ask, what is the point of your post?

    James' post is topical and informational, it's a gigantic domain sale, and I found the background on it (albeit some of it speculative) pretty interesting.

    Just saying.
     
  15. DU

    DU Secret Santa VIP

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    Because it's a lot of words to say what George said in a Tweet and I felt like it wasted about 2 minutes of my life.

    By making that post which wasted another 3 minutes of my life for a total of 5 minutes I am hoping that I might prevent a future set of at least 5 posts that disseminate little meaningful information saving me about 10 minutes that I can use for something else like scanning drop lists or wasting time spamming threads.

    Granted, I didn't account for the subsequent time spent responding to further comments.

    The actual news post yesterday had few questions in the comments on why it was $2.1m (with astute people saying that Vivo had lots of money and RealNetworks could ask a lot - well I never!). The comments also had misinformation about UDRP as usual and crap about CHIPS. In typical fashion we [domainers at large] sell the idea of money to domainers rather than actual knowledge. Yes, its a forum about domains. Yes, this is the blog and the marketing lead-in. And yes, sensationalism sells! So let's focus on the monetary value - keep asking for more on your domain BUHN.com is worth $3m!!, let's get rich together....

    So that's the point. It's schlock post that sells dreams to the masses. My post might also be considered 'trolling' which is the tried and true and (dis)honored tradition of reacting to blog posts in such a way as to derail comments; however, I didn't feel they were done in a manner to provoke further discussion but to make a point so I don't feel it qualifies. I wasn't planning on coming back here :)

    I'm sorry I don't "contribute" in acceptable fashion. If I was being a troll I'd ask what the point of your post was but I won't =) I won't ask the same question to @Grilled and @decode - as I'm held to a higher standard :)

    In future, I will be explanatory rather than vague and failed attempt to be cute.
     
  16. Grilled

    Grilled MIA VIP

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    What's the point of any post? To share one's thoughts or journeys through the internet with niche peers...

     
  17. Michael Ehrhardt

    Michael Ehrhardt Active Member VIP

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  18. tweetsgonewild

    tweetsgonewild Active Member VIP

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    Vivo is a huge brand in India. They host so many tournaments. Like IPL (It's like NFL but with Cricket)

    Chinese smartphone companies are usually private and make huge profits.

    Eg: Mi.com sold for $3.6 million. Not because it is a letter domain name but because it was a huge company just like Vivo without a domain name.
     
  19. decode

    decode Established Member

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    @forge the point of the post is that so many people who fully understand the domain industry spend so much time trying to justify pricing to fellow domain enthusiasts when everyone needs to spend more time educating people who don't understand the value of domains the true value of them.
    Cheers.
     
  20. London555

    London555 Active Member VIP

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    This is a great post Jim and goes to show the true value of a great name to a LARGE company. JD.com saved ( i think im correct) $20million by buying JD.com for $3mil. so as now people go direct instead of via Google. We own TWTRS.com but havent heard from Twitter yet - oh well. LOL
     
  21. Lysted

    Lysted Lysted.com Domains Buy - Sell - Connect - Manage

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    Great name. Having an established business under that name - that is the main contributing factor for this sale.
     
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