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Under Construction
Building a brand the old-fashioned way
By ERIC ELLIS
December 2, 1999
Web posted at 6 a.m. Hong Kong time, 5 p.m. EDT
Have a think about the best investment you ever made. I mean of the financial nature--not the human investment of your wife, husband, kids or even your home.
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Chances are it didn't earn you 5,000% in two years. That's the return a far-sighted--and extremely lucky--investor has just received for an Internet domain name. A Santa Monica company paid Houston publisher Marc Ostrofsky $7.5 million for the domain name Business.com.
Admittedly, it's a pretty good website address. But that's a lot of cash. Rewind the clock a couple years and I might have been writing the same column about the shoe being on Ostrofsky's other foot. That's when he paid an ISP in Europe $150,000 for the same site. As Ostrofsky told The New York Times, "I had more than my fair share of people telling me I was out of my mind."
Sure, that was a bucketload then, but now there's 5,000 more buckets. The question now is, does eCompanies, the crowd that bought Business.com, sit on the domain and wait until someone else comes along and offers to pay, what, $100 million for it?
Or does it develop the website as an e-commerce platform?
For the answer, log on to Business.com and see what they say. "We plan to make Business.com the Internet's preeminent business brand," says Jake Winebaum, eCompanies' co-founder.
Winebaum's press release quotes a friendly analyst to say that the name Business.com is 75% of the brand-building process. But it's going to take a lot more than $7.5 million to turn Business.com into e-commerce's "preeminent business brand."
Crystal ball-gazing Internet analysts say business-to-business e-commerce will be worth $1.5 trillion inside five years. But Netizens don't simply log on (yet) to Business.com because they instinctively know that's where they'll find good deals. Brand-building is way expensive. Just ask all those Net companies that will spend their latest round of venture-capital megabucks on an ad spot during the American Super Bowl, television's most expensive slot.
Hard-core Netizens like to crow that the Net signals the death of old media like print and TV. But check out the techie ads in your newspaper or on the box. That's called brand-building, and it's the reason why old-media companies are having some of their best years yet, just as they are supposed to have one foot in the grave.
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