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CNET Acquisitions

January 7, 2008 1 comment

For the past several months, I have been watching and considering an investment in CNET Networks, precisely because of its attractiveness of individual assets, which if spun off could suggest a much higher total worth than the current $1.3 billion. However, upon closer inspection of the individual parts, I am still not convinced that the sum of its parts, under current conditions, is worth more than its 1.3 billion. CNET is currently carrying too much fat and producing mediocre returns on their prime jewels. Take for instance News.com, which as suggested by the NY Times produced in October a mere 6 million page views, compared to 8 million page views produced by a small group of bloggers with minimal costs over at TechCrunch.

The key of course, is finding buyers for CNET’s crown jewels, which are:

  • TV.com – This is currently a site which alone could be worth more than CNET’s current market cap, but the focus of the site is its main problem. TV.com is aimed at providing a TV guide resource – big mistake!

Instead, TV.com could become the place to go for TV watching, think YouTube or Hulu. Capitalize on the millions of confused visitors coming in from the highly marketed .TV extension. Strike deals with media companies to stream television through TV.com. Stream everything under the sun! Sell the idea to Mark Cuban, sell it to Murdoch. Try to get a link from future generation television sets that are integrated with wireless internet, so that TV.com is the link to online television. How many people are looking to buy a TV and just type TV.com? Have a section in the site for TV purchases, cable subscription services.

The current site is probably 10 to 15% of the traffic and revenues it could achieve.

My current price – $100 to 500 million. Future worth with minimal refocus – $1 to 5 billion.

 

  • News.com – When you type News.com, the first thing you see is technology news. Get over it. If I want technology news, I will type TechnologyNews.com, Technology.News.com, or TechCrunch.com. I don’t even want to know how many of CNET’s 2,600 employees it takes to run this charitable venture costing investors $16.65 million last quarter. Again, as TV.com, News.com is being used for less than 15% of its capacity.

When I type in News.com, it should be news about everything. I want to see videos of what’s happening around the world. I want to get international perspectives for what is happening in the war in Iraq. People should find ALL possible resources on news information and be able to interact and contribute. Oh so many possibilities!

My current price – $50 to 300 million. Future worth – $0.5 to 1 billion.

 

  • Download.com is fairly well developed and should fetch a good price. I don’t have specifics on how much it costs them to offer what they claim to be a, “a rigorous testing process to ensure it is safe and spyware free”. Unless this rigorous testing process is subsidizing a considerable number of employees, an automated system should not represent a considerable cost. Advertising money here should be flowing comfortably in the black.

My current price $50 to 150 million.

 

  • Search.com – Wow, these people really knew how to pick their names. However, as Google becomes a household synonym for “search” I am less confident in this domain than what I would have been five years ago. I would assume that this is a rapidly depreciating asset and should have been shopped around much earlier. Sell it to Sahar Sarid for his search venture Assista. I am sure he’d appreciate the value it can bring to own the direct synonym to Google in his quest to take a bite of that space.

My current price $10 to 20 million (perhaps more depending on current traffic and revenue numbers)

 

  • Chat.com – Give me a break! This baby redirects to cnet.com? Yes, it should be a crime punishable to death. Chat.com has no home of its own. I’ve personally shopped around to buy chat ccTLDs and have already developed one into a chat site. These sites are great, because they are cheap to build and to maintain, and user loyalty is huge. Chat.com is a dream domain with immense potential. I want it.

Suggestions for this site are obvious – build chat channels and capitalize on the type-in traffic, which will serve as the commencement of an avalanche of visitors. These people spend 20, 40, 60 minutes straight in a page. Even at $2 CPMs, this is one site that could produce millions. Instead, old grandpa CNET reasons – if they type in chat.com it must be they want to read technology product reviews! Shame on you CNET.

My price $300k cash, right now! OK, seriously – $5 to 10 million – and the 10 is pushing it, because there’s no community. This is just a domain name purchase.

Future worth – $10 to 50 million easy.

Mp3.com – $5 million

GameSpot.com – $4 million

ZDNet.com – 3 million

TechRepublic.com – $2 million

mySimon.com – $1 million

UrbanBaby.com – $500k

Chow.com – $300k

As you can see from current conditions, a $1.3 billion market cap is reasonably priced. Yes, many of us see potential in a much higher worth, given the properties they own, but right now there is no bargain investment in CNET unless you have the power to enforce radical changes to current management or have faith in Jana’s capacity to push for that change.

2008 Internet Predictions

December 30, 2007 Leave a comment

To continue with the tradition of those who like to make predictions for the New Year, I have recovered an old crystal ball which has shown me the following Internet changes coming for the year 2008:

1. Big search engines will update their algorithm to favor country code top level domains (ccTLDs) in local search related queries.
2. As a result, in part,  of number 1 prices and liquidity of ccTLDs will rise.
3. .mobi will continue to gain momentum, even though I have opposing feelings about this extension.
4. People will learn to understand the importance of IDNs and the value of these will rise – specifically for one word IDNs under the corresponding ccTLD or under the .com and .org.
5. Thousands of wannabe land rushers will flock to try and get a piece of China’s Internet population – and like in the West, most will fail.
6. General Internet users will be more knowledgeable of the Internet and search – reducing Type-in traffic for common words under the .com extension.
7. Many successful Internet ventures will start as tools built for users within Social networks, and no longer start from a single proprietary website.
8. A top Internet executive will be arrested.

Hey, don’t argue with me. This is what the crystal ball showed me, and it was very dusty.

May this New Year bring much love and happiness to all.

HAPPY NEW YEAR!

IDNs are coming to a home near you

November 17, 2007 1 comment

An IDN, or Internationalized Domain Name, is a domain with characters other than the regular A-Z and 0-9. For example, in the Spanish alphabet, there are symbols like “ñ, á, ó”, which up to now could not be represented in a domain name. This will change now, as ICANN (Internet Corporation for Assigned Names and Numbers) and the newer versions of Internet browsers support the IDNs. Therefore, if you are not familiarized with IDNs yet, or doubt the immense significance it plays internationally for the Internet, then watch these two introductory videos by ICANN:

Part 1

Part 2

Categories: Domains, Internet Tags: , ,

Alibaba IPO and Yahoo Valuation

November 6, 2007 Leave a comment

palm.png

Call me old, but am I the only one that remembers the Palm IPO? OK, so I was among the cattle desperately trying to get shares of Palm, back in the day – March 2000. Now, something with Alibaba smelled very similar to that Palm IPO…

March 2000:

  • Palm IPO rises 150% by closing bell
  • Palm closes opening day with a $53 billion market cap
  • Main Palm shareholder 3com rises drastically as a result of Palm’s market cap

November 2007:

  • Alibaba IPO rises 193% by closing bell
  • Alibaba closes first day of trading with a $25.7 billion market cap
  • Main Alibaba shareholder Yahoo! drops 4.6%???

OK, so Mr. Yang is in the hot seat, but is it so serious as to discount the more than $6 billion they just made off of the Alibaba IPO, plus a nearly $2 billion more in the drop of today?

Then again, investors could be discounting the huge dot-comish PE that Alibaba carries.

Oh, and for those of you wondering how Palm did ever since that monumental IPO… PALM Market Cap:  $0.9 billion

Categories: Business, Economy, Internet Tags: , , ,

Ciao Record Labels

October 11, 2007 Leave a comment

Do you smell blood in the water?

In the latest seismic shift to rock the music industry, pop superstar Madonna is close to leaving Warner Music Group Corp.’s Warner Bros. Records for a $120 million deal with concert-promotion giant Live Nation Inc., according to people familiar with the deal. Madonna still has another studio album left to deliver with Warner Music.

Wall Street Journal

The shift in power, mainly (if not totally) by the Internet distribution channel for music downloads, is causing a slow and painful death for music labels. It might be time to start filling those Christmas stockings with put options of record label companies.

Domain Deals – New Column

September 19, 2007 1 comment

feedread.jpg

Thanks to Google Reader’s tag share option, from now on I’ve added a new column called “Domain Deals”. On a regular day, I read several hundred rss items and evaluate hundreds of domain deals. All shared domain deals are considered to be attractive. The number of attractive deals has grown so much, that I’ve decided to share this list with everyone.

You can find this column of deals in the right side of my blog, and it will update every time I tag a new deal. Feel free to subscribe to the feed to read as many domain deals as you like. I hope this new column helps all those people interested in domain investing.

For all the newbs in the house, please read “Potential Domain Investment Risks” before jumping in the water.

Happy domaining!

Categories: Business, Domains, English, Internet

Fundamentals of the Anti-Cybersquatting Piracy Act

August 22, 2007 1 comment

The key to understanding the Anti-Cybersquatting Piracy Act (ACPA) is to see it as an extension to the Lanham Act section 43(d), in its quest to determine bad faith, where it states:

(d)

Cyberpiracy prevention.

(1)

(A)

A person shall be liable in a civil action by the owner of a mark, including a personal name which is protected as a mark under this section, if, without regard to the goods or services of the parties, that person–

(i)

has a bad faith intent to profit from that mark, including a personal name which is protected as a mark under this section; and

(ii)

registers, traffics in, or uses a domain name that–


(I)
in the case of a mark that is distinctive at the time of registration of the domain name, is identical or confusingly similar to that mark;
(II)
in the case of a famous mark that is famous at the time of registration of the domain name, is identical or confusingly similar to or dilutive of that mark; or
(III)
is a trademark, word, or name protected by reason of section 706 of title 18, United States Code, or section 220506 of title 36, United States Code.

(B)

(i)

In determining whether a person has a bad faith intent described under subparagraph (A), a court may consider factors such as, but not limited to–

Full section

They key phrase here is “bad faith“. See how in the ACPA, there are five determinants to bad faith:

  • Intent to divert to a site that could harm the trademark owner’s goodwill – either for commercial gain or with intent to tarnish by creating likelihood of confusion as to source, sponsorship or affiliation, or endorsement of the site.
  • Offer to sell the domain name without having used, or having an intent to use, it in the bona fide offering of goods or services, or a prior pattern of such conduct.
  • Intentional provision of misleading contact information in the domain name registration application or the history of such conduct.
  • Warehousing of multiple domain names known to be identical or confusingly similar to distinctive marks or dilutive of famous marks, without regard to the goods or services of the parties.
  • The extent to which a mark is distinctive or famous.

To further understand the international similarities in the establishment of bad faith domain registration, the World Intellectual Property Organization (WIPO), through its Uniform Domain Name Dispute Resolution Policy (UDRP) sets the following guidelines:

  • Circumstances indicating that the domain name was registered or acquired primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of the domain name registrant’s out-of-pocket costs directly related to the domain name; or
  • The domain name was registered in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the domain name registrant has engaged in a pattern of such conduct; or
  • The domain name was registered primarily for the purpose of disrupting the business of a competitor; or
  • By using the domain name, the domain name registrant intentionally attempted to attract for financial gain, Internet users to the registrant’s web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the registrant’s web site or location or of a product or service on the registrant’s web site or location.

Yesterday, the well known domain investor Rick Shwartz made the following cybersquatting assumption:

So will we see the anti-cybersquatting CADNA.ORG get swept into court for violating the mark of CADNA.COM?? Did they not do any research? How SLOPPY can this new association be and how IGNORANT can the companies putting their names behind them be?

So either CADNA needs to change its domain name or it is just as guilty as the people they are pointing fingers at and calling cybersquatters.

Determining if this is a violation of the ACPA is very simple. Can you determine the verdict? CADNA.com is a for-profit corporation selling replacement automotive parts. CADNA.org is a non-profit organization for domain names. Evidently, although they share the same name, CADNA.org is:

  1. not benefiting from CADNA.com’s trademark
  2. not doing business in the same industry
  3. unlikely to confuse a customer seeking automotive parts
  4. not operating for commercial gain

Thus, CADNA.org is not cybersquatting.

In summary, the ACPA is one of many mechanisms available to try and eliminate the practice of registering domain names for the purpose of hurting, taking advantage of, or profiting from an established mark. It’s that simple! Furthermore, the Lanham Act goes on to protect registrants by saying, “Bad faith intent described under subparagraph (A) shall not be found in any case in which the court determines that the person believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful.”

Categories: Business, Domains, Internet, Law