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.
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.
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
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.
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.
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:
George Hong said:
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.
