GreatDomains.com Bought by VeriSign
GreatDomains.com, the Universal City firm that brokers sales of Internet names, struck a deal of its own Wednesday to be acquired by VeriSign for as much as $100 million.
GreatDomains.com operates a Web site where people who have registered Net names such as IncomeTax.com can offer them for resale to start-ups and entrepreneurs hoping to use them as the cornerstone of a successful business. Earlier this year, the company brokered the sale of Loans.com to Bank of America for $3 million.
The deal makes GreatDomains.com a sister company of Network Solutions, which has registered 90% of the Internet names that end in the familiar “dot-com.” Mountain View-based VeriSign bought Network Solutions in March for $16.8 billion in stock.
The deal will allow VeriSign to combine the company that registers the most Net names with the biggest reseller of names already registered, said Chris Babel, VeriSign’s director of market development.
GreatDomains.com was founded a year and a half ago by Steve Newman, a former real estate broker who routinely saw properties change hands for millions of dollars and expected the same thing to happen with the virtual real estate of the World Wide Web.
He and partner Jeff Tinsley raised money from a group that included Register.com, a New York-based rival of Network Solutions. Register.com had expressed interest in buying GreatDomains.com outright, but negotiations fell apart, said Richard Rosenblatt, who heads the Los Angeles venture capital firm Prime Ventures, an early GreatDomains.com investor. Register.com ended up buying Afternic.com, a rival Net name reseller.
VeriSign then approached GreatDomains.com about a deal. Network Solutions, based in Herndon, Va., announced plans to create its own service to resell Net names over the summer, but decided it could grow faster with an acquisition. Network Solutions’ service lists 400,000 names available for resale, compared with 1.8 million on the GreatDomains.com site, Babel said.
GreatDomains.com’s 85 employees will continue to work in Universal City, reporting to Network Solutions.
VeriSign paid $20 million in cash and 300,000 shares of stock for GreatDomains.com, Babel said. When the deal closed earlier this week, it was valued at between $85 million and $100 million, according to a source familiar with the details.
On Wednesday, VeriSign shares fell more than 12% on Nasdaq to close at $147.44, down $20.88. After reporting third-quarter earnings that beat expectations, the stock rebounded to $157 in after-hours trade.
*
Reuters was used in compiling this report.
