#7 This Website is For Sale
December 31, 2014
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This week we enter the mysterious, Byzantine underworld of domain sales, where people make money speculating on the website naming market. A few years ago, the owners of the popular journalism website longform.org blundered into this world when they innocently tried to procure longform.com. In this episode, we find out about their misadventures, and we hear from the Derek Jeter of URL purchases.
Longform has its own podcast, "A weekly conversation with a non-fiction writer or editor on craft and career." You can listen to it here.
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Here's an article by domain aficionado Michael Berkens. It's about a guy who smoked too much weed and spent over $5,000 on domains.
ALEX GOLDMAN: There are millions of websites out there: doctors.com and dads.com are just two examples--that seem like they’d be exactly what you’d think they’d be, but, instead they’re just blank or filled with spammy links. It’s like seeing a vacant storefront in Times Square. Who are the people who own these domains? And how do they end up vacant in the first place? I know now, because I went on an odyssey into the smoky backrooms of the internet where domains are bought, sold, auctioned and held hostage, and where fortunes are made.
ALEX:From Gimlet this is Reply All, a show about the internet, I’m Alex Goldman.
ALEX: My introduction to this world began a few weeks ago with a guy named Max Linsky. He, along with his co-founder Aaron Lammer runs a website that collects the best non-fiction on the web. It’s called Longform.org. Dot. Org. And for ages they have had their eyes on another website. Longform.com. As long as they have been running dot org, dot com has sat unused, with a note at the top that said something like “click here to make offer on this domain!” And so, Max Linsky would periodically make an offer on this domain
MAX LINSKY: So I would email this guy but from fake gmail accounts and ask what the price was, cause I didn't want him to know that it was me, that it was one of the longform.org people, emailing him, and a lot of times he wouldn't even write back. I would either offer 2,500 bucks or just send an email that said what's the asking price for this domain? I wouldn't even get a response.
ALEX: So when you sent him an email, you just create a fake gmail account. You just be like… InterestedConsumer@gmail.com
MAX: Straight up fake names and he'd respond sometimes but usually he would not. And he wanted 30 grand. We didn't have a 30,000 url budget.
ALEX: And it went on like this. every month or so, fake email, how much. No answer or thirty thousand. For years. This continued until Max’s partner Aaron stepped in. Or, more accurately, blundered in. In April, Aaron sent an email to the owner of longform.com. But he didn’t make up a fake email address. He used his real one. His longform.org email address.
AARON LAMMER: Yes, which was considered a fuckup at the time. And I assume it still is considered a ...
MAX: I don't think the verdict on that has changed.
AARON: I think I did know in the back of my mind that Max maybe had already done it. I was hoping that I would do something that would be considered very productive but not having done a bunch of work, you know? That if he just wrote back and was like "yeah, sure, throw me $500 bucks" I would have like a big coup to report.
MAX: So, he gets the same thing, 30 grand. Aaroun's like that's too much. THEN, the next day, we get an email from someone totally new offering to buy longform.org for 500 dollars.
MAX: For years we have been not emailing this guy from our email addresses. Then we finally do and the next day we get a crazy lowball offer for longform.org.
ALEX: That crazy lowball offer came from a guy who claimed his name was Cameron Gordon. But Max and Aaron thought that that was probably a pseudonym, in fact, they were pretty sure that the lowball offer was a trick and that the person behind it was the man who owned longform.com: Michael Berkens esq. [music] Michael Berkens esq. is a prominent player in the domain name reselling industry. Michael Berkens spends a lot of time thinking about how to make money on domain names. He’s known as a wiley negotiator. In October he sold the website rookiepoker.com for 20,000 dollars after buying it for just 500. And when he’s not buy or selling domains, he’s editing his domain industry news website: thedomains.com..
MAX: look how many time Michael Berkens has posted today
ALEX: 1, 2, 3, 4, 5, 6, 7, 8...ok. I'm with you so far. Eight times...
MAX: Eight times. on domain industry news.
ALEX: Michael Berkens owns longform.com, the website Max and Aaron wanted to buy and immediately after Max and Aaron received a lowball offer for longform.org, they heard from Michael Berkens himself, saying “hey guys, I just got an email from someone named Cameron Gordon wanting to buy longform.com--he wanted to see if THEY wanted to bid on longform.com before it sold.” The timing seemed very suspicious
MAX: it seemed more likely to me that this was someone that Michael Berkens was friendly with and that that when they had a fish on the line this is how they worked up the price. Right. Michael Berkens says All right, the long form dot org guys finally e-mailed us so let's see what we can get out of them.
ALEX: They thought they were being worked over. But they did want longform.com, so they put in a bid. Michael Berkens had claimed the offer he had just gotten was for $7500.
MAX: We said OK if they're offering seventy five hundred well over seventy five hundred. So he says no you have to offer more than seventy five hundred. You have to top their offer. So we said OK. 8,000. That's more. He goes back to them. Then he says the offer’s ten, so now we're in bidding war.
ALEX: To Max and Aaron, this was both annoying, and legitimately scary. Annoying because it’s annoying to feel like you’re being scammed. But scary, because what if it wasn’t a scam. And longform.com fell into the wrong hands.
ALEX: Just just try and imagine your doomsday scenario and what is it.
MAX: Like this is not a rational fear.
ALEX: We deal heavily in irrational fear.
MAX: My most irrational fear was that someone was going to build something super similar to what we do that was shitty. If that was on long form dot com, it would be confusing, people would assume that was us.
ALEX: So you assumed that they were faking but like you had this nagging doubt in your stomach like “what if this is real and these people are just going to make a nightmare for us once this domain is sold.”
MAX: Exactly. Yeah the great odds are with this being theater but on the off chance it's not, it would make this thing that we’ve worked very hard on look terrible.
ALEX: The bidding continued. The price climbed toward 25,000 dollars. Finally, Max and Aaron said “enough, we’re not paying for this.” They were given a day to reconsider, and then Berkins said it would sell to another buyer.
MAX: So we’re waiting for this moment - waiting for this big moment where where the flip was going to get switched and it was going to be revealed who this mystery buyer was and how we were going to get screwed. And at midnight, it just went back to the old site.
ALEX: Nothing happened
MAX: nothing happened.
ALEX: So Max and Aaron assumed that it had been a scam. That there was no other buyer, that whole thing had been invented by Michael Berkens to try and bid up the price. At least that was their assumption until they came to our studio to do the interview.
ALEX: Do you mind if we look at it right now?
MAX: Yeah, that’s fine. I actually looked at it today and it’s different.
ALEX: Every website has something called a “WHOIS” record -- basically a way for the public to find out who owns a particular site. They are often inaccurate or hidden, but a WHOIS can at least show when a website’s ownership has changed. And when we looked at the WHOIS record for longform.com, well...
MAX: It's changed. It has sold. The story I came in here to tell you has a different ending.
MAX: This is amazing. And terrifying.
ALEX: That’s right. It wasn’t a con - longform.com actually sold on May 4th--days after their contact with Berkens took place. Stay with us. We’re going to go further down the rabbit hole, after a word from our sponsor.
ALEX: After finding out the shocking news that longform.com had, in fact, been sold, we set about trying to find out to whom. And we found the domain listed for sale on a website called “Afternic,” for a $10,000 minimum bid, alongside a bunch of other domains that were, for whatever reason, much cheaper.
AARON: When you look at those domains that are available on that list, and longform is listed as a minimum 10,000 dollar bid, and then you have, say, ABCform, which I would say objectively is about as good a domain, that's a $500 minimum. You get the feeling that we've somehow been entered into the system as bigger fish. I'm not gonna call us big fish. Let's say small medium fish.
MAX: Well I think your metaphor here is important, ‘cause I think that the real question here is are we the fish or are we the bait?
AARON: I think we’re the fish….like I think that we sent some sort of signal up the chain that some guys who are interested in this domain and that, somehow, percolated all throughout this...seller’s market.
ALEX: So we're all journalists, how the hell are we gonna figure this out.
AARON: I wonder if we could get like an anonymous "I was a domain reseller and I'm now reformed kind of guy to explain how these busionesses actually operate." Of course all those people have been thrown off boats in the Florida keys.
MAX: yeah. Everybody’s dead.
AARON: I think that what we should do is go to that page where it's for sale for $10,000 minimum bid and call 339-222-5134.
ALEX: Alright, sounds good. Let’s do it.
PHONE: Thank you for calling Afternic. The world's largest premium domain marketplace. If you know your party's extension press one now. to speak with the sales consultant press two. for the operator, press zero
ALEX: I, of course, went into this phone call the way I do every cold call I record - expecting someone who would be taciturn, annoyed at being recorded, and unwilling to help us understand just what we were fumbling into. But I didn’t count on speaking to Dave Higgins.
DAVE HIGGINS: dave higgins speaking
ALEX: My name's Alex Goldman I am a radio show host I just want to let you know beforehand I am recording this phone call.
DAVE: Am I on the radio now Alex.
ALEX:No no we're not live this is pre-recorded so don't worry about that.
DAVE: [laughs] alright.
ALEX: I am I am interested in just trying to figure out who owns a particular website that I have a potential interest in and I'm wondering if you can help me out with that.
DAVE: I can.
ALEX: Afternic HR, if you’re listening to this, please give Dave Higgins a raise. This was by far the best over the phone customer service experience I’ve ever had. Not only did he stay on the phone with us for a half an hour, he essentially became our domain spirit guide, teaching us the ins and outs of the domain resale universe. Starting with what his company, Afternic, does.
DAVE: we’re domain name brokers, you know my company here we broker approximately seven million domains that are owned by different parties and we broker them on their behalf.
ALEX: I assume they get a percentage of it and you get a percentage of it as well.
DAVE: Yep! We’re the middlemen.
ALEX: One of the first things that Dave told us was that his company, afternic, did NOT own Longform.com. And was not trying to sell it. The fact that we’d found longform.com listed on the Afternic website, he said, was just a weird random mistake. But we liked talking to Dave--so we kept him on the phone and asked him what we should do to get to the bottom of the mystery of longform.com. And Aaron started at the very beginning.
AARON: Well I have some I have some bad news about something I did in my past which is at one point late it was it was late I was I was feeling acquisitiony and I send an email to the old owner from Aaron at long form. Do you think that is...Do you think that hurt my chances or drove the price up...that I let the cat, I know that you would keep in the bag, out.
MAX: Don't sugarcoat this Dave.
DAVE: Yeah well possibly. When you google long form, which is essentially the first thing anybody would do when pricing a domain, looking at it, as a domain investor myself, I would suspect that they wouldn't - excuse the expression - jack the price by looking at your website, which is a good thing.
ALEX: Why would you think they wouldn't jack the price?
DAVE: because it's not something, from what I can see, it's not a household name where they see dollar signs, right. Nothing against you gentlemen, I’m not....
MAX: I liked you until right now, Dave.
ALEX: You hear that? Dave, our longform domain spirit guide - he doesn’t even have faith in its valuable. So if it’s not all that valuable why did it get bid up to $25,000, back in the email negotiation with Michael Berkens esq.? And in the end, was it actually sold for $25000? Dave couldn’t tell us the answers to those questions, but he did tell us who longform.com was sold to. A company called Mark Monitor, which does something called “Brand protection.” I went to Mark Monitor to ask them for an interview, and their communications department told me that what the company does, essentially, is manage portfolios of domains for huge corporations. So if I’m Protcor and Gamble, and I have a new product called freshclean, Mark Monitor will go out and find 20 domain names for freshclan’s new website. Freshclean.com unavailable? Markmonitor will help them procure freshcleanbrand.com. Or buy freshclean.com from whoever owns it. And then, once the corporation has the domain, Mark Monitor will protect the brand by “elimination of confusing and potentially fraudulent use of your brand online.” MarkMonitor’s spokesperson was very clear that they wouldn’t tell us who bought longform.com or for how much. She was basically the anti-Dave.
So there was only one person left to turn to - the man himself. Michael Berkens esq. His phone line was pretty bad, so I might have to break in and translate sometimes. Berkins is self employed, works out of an office at his home. And he says that big domain sellers like Afternic are not the entire market by a long shot. It’s made up of full time investors like him, hobbyists, dabblers, corporations, a whole thrumming ecosystem of domain investors trying to pair the perfect domain with the perfect client. And how’s it going for him?
MICHAEL: We sell 7 figures of domain names every year.
ALEX: With your business specifically, you're moving over a million domains a year, if we're talking seven figures. In dollars.
MICHAEL: No millions in dollars.
ALEX: Oh, millions in dollars in dollars. How many domains would you say you buy and sell in a year?
MICHAEL: A few hundred.
ALEX: The man makes over a million dollars a year buying and selling a couple hundred domains. He told me he felt lucky to have found his calling. He compared himself to another natural who had found his calling: Derek Jeter.
MICHAEL: If life had led him in a different direction and he became a salesman, he may have been a terrible salesman, he may have been a terrible lawyer. But he became what he became. So I think in domains it's no different than anything else. I think there's people who have a vision that see it. and he goes through a list of 100,000 domains names that are dropping every day and spots 20 or 30 that are worth something. I think that's a talent.
ALEX: As for how he chooses the domains he procures, he operates mostly on instinct. And Longform is a perfect example. When Berkins saw it, he didn’t think some journalistic outlet is dying to take this off my hands, he thought “infinite possibility.”
MICHAEL: Obviously it's a tax thing, it could be anything. I could see why an accountant would want it.
ALEX: In case you couldn’t hear that, he said “Obviously it’s a tax thing. It could be anything. I could see why an accountant would want it.”
MICHAEL: So Long Form. It's easy to remember it. It's sticky, it's memorable, it's brandable, people have heard the expression before. That to me makes a valuable name.
ALEX: Berkins told me that despite Max and Aaron’s suspicions, he did not create or employ Cameron Gordon to bring the price up. When I brought up how bizarre it was that a bunch of people showed interest in longform.com at the same time, he said that the bidding war was coincidental, and not very common, but it was real. MarkMonitor makes people sign Non-Disclosure agreements, so he can’t say how much he sold it for, all he’d say is that longform.com is likely now owned by a fortune 500 or fortune 1000 company.
So, even though Aaron and Max didn’t end up getting longform.com, there’s still a bright side to all of this: whoever owns it right now, their deal was brokered by the Derek Jeter of domain names. A man who saw more potential in longform than anyone. It’s sticky, it’s memorable. It could be anything.
ALEX: Reply All is hosted by PJ Vogt, and me, Alex Goldman. Our producer is Lina Mistizis, and the show is edited by Kaitlin Roberts, Starlee Kine and Alex Blumberg. Matt Lieber is the world’s tallest man. Our theme song is by the Mysterious Breakmaster Cylinder, who also did the rest of the music in this episode. Our ad theme is by Build Building. Our show this week was brought to you by Mailchimp. who celebrate creativity, chaos, and the mission of Reply All - I can attest to the fact that it’s pretty chaotic around here, so there’s a lot for Mailchimp to celebrate at Gimlet HQ. If you like the show, please think about reviewing it on iTunes, believe it or not, it makes a big difference for us. Our website is NOT at replyall.com, but you can find it at replyall.fail. Really. That’s our website. Give it a shot. Thanks for listening, and we’ll see you next week.