What Price Beauty.cc?

SAN FRANCISCO (06/14/2000) - Beauty, and value, are clearly in the eye of the beholder in the extremely tight market for Internet domain names.

That proved all too true today with the announcement that a 6-week-old company bought the "Beauty.cc" domain name for a whopping $1 million - the highest price ever paid for a URL without a dot-com suffix - even as e-commerce sites continue to pull up their stakes.

The buyer, UniversalDomains.cc, plans to use the Beauty.cc site to showcase all things beautiful online, said company President Alan Brown, who called today's purchase "a bargain." "With our site, we're going to have beautiful cars, beautiful people. We'll have beautiful products," Brown says. "It's going to be wrapped around makeup and beauty products ... also beautiful clothing." But online retail experts immediately questioned whether any site whose name ends in "dot-cc" rather than the ubiquitous "dot-com" is worth seven figures.

Even Jeffrey Tinsley, CEO of GreatDomains.com, which brokered the deal, acknowledged that the moniker is less valuable without the dot-com. "They're going to have to have a much larger advertising budget to plant this domain name in other people's minds," says Michael Goulde, a senior consultant with Patricia Seybold Group in Boston. "I can think of other more cost-effective ways of acquiring customers. I pity the people who put up the venture capital for this." Adds Tinsley: "Everybody wants to be a dot-com. There is still an educational process if somebody is buying a 'cc.' You might end up losing a little bit of traffic to a dot-com."

Clearly, Beauty.com would have been a preferable brand name, but it's already taken - by a company that was bought by Drugstore.com in January for $34 million in stock. "We're thrilled and delighted that somebody is willing to pay that kind of money because it's another validation of the overall space," says Judith McGarry, VP of strategic partnerships at Drugstore.com, of the $1 million purchase. It is also yet another sign of the scarcity of prime dot-com domain names, which still make up 98 percent of the business handled by GreatDomains.

Bank of America Corp.'s $3 million purchase earlier this year of the domain name Loans.com was GreatDomains' largest single deal to date, and last year, eCompanies paid more than $7.5 million for the Internet address Business.com.

The dot-cc suffix originated as a top-level country code domain belonging to the Cocos Islands, a group of islands in the Indian Ocean with a population of 636. David Sams Industries of Beverly Hills, Calif., sold the Beauty.cc domain name, one of about 100,000 that the company has sold this year.

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