Tuesday , April 23 2019

Why did a company Spend Millions on a Domain Name?

Domain Name plays a major role in any business as it stands as the most effective element to recognize any business.


Most of the domain names are inexpensive. Domain registration companies sell .com domains for about ten to fifteen bucks a year. Even more costly domain names ending with .io, are under hundred bucks.

Let us brief you with an example-

Why had the online marketing company Sumo paid about $1.5 million to change its business domain name from SumoMe.com to Sumo.com in the month of February?

Below we will have a look at the basis and what we can cram from high-dollar domain deals like this one.

Why did Sumo Want the Domain?

Noah Kagan, the co-founder of Sumo had given numerous reasons for making this big investment. In discussions with the press and in his podcast, he had given three major reasons:

  1. There were a group of businesses adding the term “sumo” to their company names. He was alarmed about confusion.
  2. People couldn’t utter the name SumoMe properly.
  3. It takes the similar amount of exertion to do something big as it ensures to do something small.


Noah wants to go big, and he had felt having the one-word domain Sumo.com was essential.

How Did Noah End Up in Getting the Domain?

Noah and his crew had spent about 7 years in trying to negotiate with a business in India that had owned the domain name. He had sent 200 emails through that time.

Initially, he was rejected. But Noah states “there is a price for everything definitely,” so he just kept asking. Lastly, he had found a price that both he and the proprietor could agree on i.e. $1.5 million.

The firm paid $500,000 up front and is giving the rest of the amount $1 million through five years. That originates out to about $17,000 in a month.

That sounds like a huge amount, but he stresses out that it is a lot less than the $50,000 the firm spends every single month on servers.

What Does This Buying Tell us?

Most of the people don’t look at the domain names as a marketing expenditure or an investment. Yet, Noah had looked at it inversely.

He was a previous employee at Facebook and at Mint. He had watched how Facebook had paid to change its domain name from TheFacebook.com to Facebook.com. Even Mint had paid about $8 million to change from MyMint.com to Mint.com.

Currently, at the wheel of his own company, he comprehends why Facebook and even Mint had spent the money and exertion to alter their domain names.

Noah said he got cold feet afore closing the deal. But he had asked himself “How would I feel if somebody else got this domain instead of me?” That’s it and his eagerness had driven him to close the deal.

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