Follow up on Tenagra's Grand Experiment

From: Cliff Kurtzman <cliff_at_tenagra.com>
Date: Sat 8 Jan 2000 16:09:39 -0600

As you may recall, back on December 23rd, I sent a post
through to this list about Tenagra's plan to put the
Year2000.com domain name up for auction on eBay. We also
created a program for a $10,000 reward offered to the first
person that suggested the name of the eventual buyer. I
promised the list some feedback on this experiment, and here
it is...

The selling of domain names is usually accomplished through
private negotiation or through a domain name broker.
Putting a domain up for sale on eBay is not the way it is
normally accomplished in most serious cases. We had a
threefold objective in using eBay for a public auction.
Firstly, we realized it was just possible that folks would
bid on it and someone that never occurred to us as a
potential buyer would come in and buy it. Secondly, and
more likely, we realized that such a high profile auction of
the domain name, timed to cooincide with the new year date
change, would likely generate publicity that would have a
reasonable chance of bringing us inquiries that would lead
to a private offline sale. Thirdly, we thought our public
reward offer would likely spread additional interest in the
sale and could lead to ideas of possible purchasers.

The auction was set up for the bidding to end at the end of
the day on January 1. On December 30, we started getting
our first bids in at over $1,000,000. By the time the
auction closed on January 1, there had been two bids
submitted at $10,000,000. This kind of price was, of
course, much more than we had ever expected to receive in
the sale. http://www.domainappraiser.com/ had appraised the
domain at $4,500,000 based on the visibility of the domain
name and the number of links pointing to the site, but
frankly, we'd have been very pleased to receive less, given
that we were about through with using the domain for our
purposes.

The person whom made the winning bid had registered on eBay
back in November indicating a name and company which, in
fact, was a credible buyer of the domain at the $10M price.
But we nonetheless very quickly we became quite suspicious
of the winning bid as the e-mail address associated with the
buyer was not consistent with the name and company
indicated. Further, we received no responses to our e-mails
to that address. We eventually determined that the winning
bid, and in fact likely all the bids, were "not sincere."

We had done a good bit of PR to publicize the auction at
first, but once the bidding started skyrocketing, we decided
not to publicize the auction further until we had verified
the bids. Nonetheless, the press quickly noticed the
winning bids, and soon nearly every newspaper and TV station
in the country was publicizing the apparent record price for
the sale of a domain name, and our phone didn't stop ringing
with interview requests from one reporter after another.
You can find links to dozens of articles about the sale at:
http://www.year2000.com/auction

We remained cautious with the press from the beginning...
"Yes, it would sure be nice if it were true, but we have not
yet verified the bids and are not making plans to spend the
money until we do..." In the end, we determined that the
bids were not serious, and are entertaining private
inquiries at present to find a buyer. Given the history
with this sale, it is abundantly clear that if we do sell
the domain, the eventual buyer is now likely to receive at
least a million dollars of free press about the sale, so we
think that the chances of finding a buyer now are quite
good.

Because of the attention we knew the auction would generate,
we had notified the eBay press office of the auction before
it began. In the end, eBay was left with a lot of
embarassment over the fiasco. Their auction process is
clearly flawed for high profile and high dollar value
auctions, and there are fairly simple procedures that they
could implement to solve the problem. They could have used
this situation to announce that they would take positive
measures (which we suggested to them), but instead seem to
have taken more of a "this kind of thing hardly ever happens
and let the seller beware" attitude towards the whole thing,
and they are getting burned in the press for it.

We liked the sentiments that Steve Cline of InStock, Inc.
expressed: "If eBay is to maintain a modicum of respect and
credibility, as well as viability in auctioning off high
ticket items, then they need to buy year2000.com for the
amount of the high bid. That would be the first step in
showing that they are sincere and capable in auctioning high
dollar products. The second step would be to establish a
validation/verification process for bidders bidding $100,000
or higher. Their current sign-up process is perhaps
acceptable for the vast majority of auctions, but there is
nothing to keep 13 year olds from bidding on auctions, and
of course there have been all too many hoax bids on eBay.
EBay could establish a separate auction category where only
bidders who have a proven ability to pay for their bids can
participate in the auction.

But in the end, we are not disappointed with the results.
Tenagra has significantly expanded its media relationships,
and this is of incredible value to our clients for whom we
provide online public relations services. We've also
received over 800 suggestions for buyers of the domain name
(most often suggested are Bill Gates, Donald Trump, the
Vatican, TIME and LIFE magazines, the artist formerly known
as Prince, the Smithonian, and a law firm looking for Y2K
litigation). As promised, I'm including some of the more
amusing suggestions below:

   "Perhaps eBay should buy the name and use the domain
    name as an on-line auction site for those survivalists
    who wish to unload their unused generators, canned and
    bottled goods, and other items that were stockpiled in
    preparation for a disaster that never materialized."

   "How about the current owner of year1999.com?
    Time to upgrade!"

   "If I had the money to buy it and I did it... I would
    put the photo of the woman I love and write a poem,
    letting everyone know what I feel."

   "Dick Clark should buy it -- hasn't he been at the big
    apple for the last 2000 years seeing in the New Year?"

   "God should buy the domain. He could put it to use
    educating those who thought that the world would end
    in the Year2000."

   "A porn site looking for hits from all the links. A
    disgrace to the nature of the site, but I'm playing the
    odds." (It should be noted that this is not at all
    unreasonable, given that there are about 25,000 links
    pointing to year2000.com, and year1000.com, year200.com
    and year20000.com are all adult sites which were set up
    to capitalize on typo's to our domain name.

   "The company the makes '2000 flushes'"

   "The makers of the bug killer, Raid, will buy it."

   "I think that Monica Lewinski should buy the year2000.com
    site. If she bought the site maybe it would be enough
    incentive for her to turn over a new leaf, or just a place
    for her to continue bragging about the leaf she is on."

And Tom McCulloch from this list sent us his Top Ten Reasons
to Buy Year2000.com:

10. It may be the last time your computer actually works.

9. You can claim royalties on an awful lot of calendars.

8. Get honorable mention in the "Guinness Book of Records"
       for highest price paid for a site name.

7. A natural place to sell left over "Millennium Party
       Goods" at a 50% discount.

6. You can own the site corresponding to the number of
       Dot-Com IPO's issued this year.

5. You can hype "2000 - A Space Odyssey" as a prequel to
       that sure to be re-released hit of yesteryear.

4. If we could convince everyone that 2000 is really the
       START of a new millennium, just imagine what you can
       do with it.

3. Comes with a non-transferable option to purchase
       "Year3000.com" in 2999.

2. It's the only way to keep "computer geeks" awake until
       midnight.

1. You have to do something with your Y2K budget for next
       year.


So that is my experience in being a millionaire. Easy come, easy
go! I hope you've enjoyed some of the behind the scenes info
on what happened.

--Cliff

Clifford R. Kurtzman, Ph.D.
President and CEO
The Tenagra Corporation
http://www.tenagra.com/
281/480-6300






Received on Sat Jan 08 2000 - 16:09:39 CST