sales Snapchat Paid $5 Million for Snap.com

[Addison]

George Kirikos says on TheDomains

FEBRUARY 2, 2017 AT 8:58 PM

Just to add more analysis that couldn’t fit into 140 characters…..

According to the WHOIS history at DomainTools, Snap.com changed from Idealab in mid-November of 2014 (into DomainsByProxy and then later MarkMonitor’s DNStination.

If you look at the tables on page F-21 (remember they’re amortizing domains over 5 years, see page F-17), this lines up almost perfectly with a single $5 million deal in November/December 2014. i.e. at the
end of December 2015, the remaining useful life would have dropped from 5 to around 3.8 (which it did) and the accumulated amortization similarly reflects approximately 1.2 years of amortization starting from $5 million on that specific transaction date (as opposed to multiple domain names over different dates).

Although, for the year ending December 2016 compared to December 2015, it should have gone down from 3.8 to 2.8 (it shows 3.0 instead), but the accumulated depreciation of $2,157,000 still lines up well with what it should be if it was a single domain name of $5 million when Snap.com went into WHOIS privacy. That slight discrepancy of 2.8 vs 3.0 might just be sloppiness (given the $5 million “gross” amount didn’t change from year to year, so there were no other transactions in play).

But, we still don’t know if there’s an equity component, which Idealab loves to do (they did that for Top10.com, for example), I think some further confirmation from either Snap or Idealab would help us to know for sure (so it can be charted on DNJournal, etc.).

 

[Addison]

@GeorgeK, you're the man!

 

[platey]

we should know quite soon as
either idealab s value stays roughly the same give or take $5m etc
if the domain was sold for $5m

or

idealabs value increases significantly in value on snaps ipo value due to an alleged equity investment in snapchat

 

[OneOfTheseDays]

wow
not verified as yet?

 

[DomainVP]

wow
not verified as yet?

It's an SEC filing, how much more verified do you need?

They are a billion dollar [valuation] company, buying a domain like this only adds to their valuation. The second they connect Snap.com to their app it quadruples in value.

If that concept seems fuzzy, and hard to understand, then think about real estate.

If you buy a house, and then re-do a bathroom for $3k it can typically add 3x-4x cost more to the value of the house. Same applies with domains. When a company associates a stagnant domain with their flourishing business they instantly increase the value of that domain as much as tenfold.

Congrats the the millionaire that owned snap, they were probably rich already, but congratulations all the same - it takes a lot of patience to wait for decades of ownership.

 

[DNHeist]

A company doesn't come out with $5 million as their opening offer. So what would you guys have settled for?

 

[Addison]

A company doesn't come out with $5 million as their opening offer. So what would you guys have settled for?

That's based on how well you know the buyer. If you don't suspect SnapChat is interested in purchasing it, then the domain name is not worth more than 1-2 million to anyone else. If you surmise, or know, that the buyer is a billion dollar unicorn named SnapChat, then you start at 10 million and settle at 5 million after months of negotiation.

 

[platey]

ok so allegedly it cost snap a few quid to buy snap .com

it may prove to be their best ever investment long term

 

[Soofi]

George it is

 

[chayan1111]

Costly , but might be a very good investment .

 

[AIS01]

Hmmm...Costly...

 

[platey]

snap could be as big as fb depending on their tech start up acquisition strategy

 

[hollywood]

When's the Snap IPO?

 

[equity78]

http://www.usatoday.com/story/tech/talkingtech/2017/02/02/your-basic-guide-snap-ipo/97355004/

 

[cdboard]

dont know about the price, but snapchat is already using the domain.

at the bottom of the page at snapchat.com, the terms-of-service page is a snap.com url.

 

[omerlevinson]

Maybe Snapchat want TopSnaps.com?
I can compromise on just 1 M LOL

 

[RBCDNs]

O... Lordy!

 

[idomainappraisal]

good deal both parties
original owner gets nice payday
natural fit for buyer
good deal all around

 

[Casey L]

a little snapchat related tidbit - snap.chat leads to some sort of payment processing company

 

[idomainappraisal]

a little snapchat related tidbit - snap.chat leads to some sort of payment processing company

If not Snap Chat that's a huge TM and C&D registration just waiting to happen

Amazing

 

[cdboard]

shares in startup jumped....................investors mistook it for snapchat

 

[Addison]

If not Snap Chat that's a huge TM and C&D registration just waiting to happen

Two distinct industries: social vs. finance. It's improbable that SnapChat would send a C&D in this case but they might file a UDRP.

Shares in startup Snap jumped 164% after investors mistook it for Snapchat

 

[RBCDNs]

If not Snap Chat that's a huge TM and C&D registration just waiting to happen

Amazing

I agree, that domain will be bought next...

 

[Rachel Mcdonalds]

is it verified?

 

[capiche]

Found another IdeaLab name that is forwarding to Snap.

Visearch/com