6 ms·

How Groupon Bought The Domain Groupon.com

50 points by AndrewWarner 16y ago

a2tech 16y ago
Not really a very cool way to get the domain.
d4ft 16y ago
Wow, is .25MM cheap for a domain name.. ever? I can't think of a scenario in which it would be. Could anyone enlighten me as to the economics of this?
- Mc_Big_G 16y ago
  It's cheap when your business is valued at $1 billion.
  - JonM 16y ago
    Yeh, but it wasn't valued at that when they bought it.
    - city41 16y ago
      Which the article directly addresses: "I think we bought it in May 2009 or something like that for maybe $250,000, which seemed like a lot at the time and now it seems cheap."
- AndrewWarner 16y ago
  I think he meant that it's cheap in comparison to what they built. They built a business with huge revenues. When I asked him if he could at least say that Groupon generates over $100 million, I think he laughed and said that $100 million is small.
  - djb_hackernews 16y ago
    Hmm. I did some math here-> http://news.ycombinator.com/item?id=1338758 http://news.ycombinator.com/item?id=1338758 a while ago. I figured 175M revenue. If 100M is small, I must have been way off.
- d4ft 16y ago
  I mean I get that Groupon is a huge business. I guess the question is are domain name prices relative? If, for instance, this was a public company, and this was disclosed, I would be a pissed off shareholder. Is it better than taking the corporate jet on a family vacation? Yes. Does that make it a good business investment? Don't know. Obviously Groupon is not a public company, but it seems like you could get a much higher ROI on a quarter of million dollars invested in the primary product as opposed to domain name. Maybe not, just my 2 cents.
  - qq66 16y ago
    For trendy consumer startups like Twitter and Groupon, I can imagine that the name does affect word-of-mouth. But in general, I think most products could be called anything and succeed. Meebo is an idiotic name but they have millions of users because their product is solid.
    - pbhjpbhj 16y ago
      I upvoted you but I disagree completely. Names are of vital importance. Meebo may sound idiotic to you but it's rhythm and sound fit the web-2.0 ethos, it's short, easy to spell, easy to share, lends itself to verb-ising, including "me" suggests personal communication and "-bo" links with other site name (I've never heard of it, but I'm guessing it's a myspace/bebo mix based on the name) ...
      - qq66 16y ago
        I think most opinions of names are post-hoc rationalizations. I think that if Meebo was a failure we would all think it was a stupid name.
        pbhjpbhj 16y ago
        When Snickers started in Britain everyone expressed the idea that it sounded stupid and Mars Co used this as part of the advertising angle ("[corny French accent]'av' you got the snickers?"). Was/Is it a better name than Marathon? Don't know. Also are you really claiming that you're the only person able to avoid post hoc analysis? Or indeed that you're immune to it. Perhaps you only think it sounds stupid because you think the product is stupid or because of the style they use to market it.
- alex_h 16y ago
  I was surprised by this. Sure, 250k is tiny compared to the current value of Groupon, but they were also in a superior bargaining position and had crafted a situation where the domain was practically worthless to the original owner. I would have thought they could have talked him down to <100k
- paolomaffei 16y ago
  Well, for sex.com or x.com it is :)
Mc_Big_G 16y ago
I believe dropbox did exactly the same thing. The lesson here is that you should get a trademark in addition to the domain. Essentially, this makes squatting pretty useless without the trademark.
- vegashacker 16y ago
  Well, $250,000 for a non-executed idea isn't a bad payout.
  - Mc_Big_G 16y ago
    Absolutely. However, it's an edge case.
- there 16y ago
  only because groupon said they were going to launch a business with that name, so the owner couldn't launch a similar business with the same name. he could have still squatted on the domain with an ad-filled landing page. if they tried to claim the domain (via an arbitration panel through the UDRP) by asserting ownership of the trademark, they would lose because the domain name was registered before the trademark was applied for.
- pbhjpbhj 16y ago
  >The lesson here is that you should get a trademark in addition to the domain. Trademarks (in the UK) are both a registered and an unregistered right. You get a trademark by using a mark that is suitable to identify the source of goods or services. A website, for example, is a service and so their is an automatically established IP right for the original owners. Marks are registered in a particular ["Nice"] classification and only protect against other following uses in that same classification. Strictly (at least in Europe, AFAICT) someone else can use your mark in your field of commerce too provided there is no cause for confusion as to the origin - eg disparate geographical locations. But cost of lawyers and the assumption of confusion tend to rule against this.
- ohashi 16y ago
  I love how ridiculous this statement is. Someone owns a domain name and then another person creates a company and files for a trademark and the original person is the squatter. Violating their intellectual property. I call bullshit. To get that domain through UDRP they shouldn't stand a chance if registration date of the domain is before trademark or use. It couldn't be registered in bad faith no matter what they were using it for. Of course, there are all sorts of terrible judges on UDRP panels and it's like russian roulette.
ig1 16y ago
Um. They should speak to lawyers right now, the UK has something called "Groundless Threats" protection for trademarks. The guy in question could quite possibly sue Groupon for a substantial amount and get the domain name back. Groupon knew the guy had the name and the intention to use it for a coupon service, and they then went ahead and registered the guys (unregistered) trademark with full knowledge that the guy was planning on using it (+ with the intention of forcing him to give up the domain). They then used the trademark to make him give up the domain. How could Groupon's lawyers not have warned them that this was a bad idea ?
- shpxnvz 16y ago
  Did the guy really have rights to the name? In the U.S., for instance, you have to actually use the mark in trade in order to establish a right to it - simply having thought of a use isn't enough. Is there no similar requirement in the UK?
  - ig1 16y ago
    It's an interesting question, and I think one that would have to be decided before a court. Certainly trademarks for prelaunch products have been granted protection before if there's a clear intent for usage (for example the iPad). Given this guy had a specific plan and turned down a substantial amount of money for the domain, that's likely to play in his favour proving that he both had intent and that the brand had value. However in this case he doesn't even need to prove his usage was trademark worthy, the Groundless Threats doctrine just requires you to be threatened unfairly, which given it seems pretty clear from the interview that the trademark was registered in bad faith (knowing a competitor was going to use it) it seems likely to be covered. If a court finds he was made to sell his domain under duress from a groundless trademark threat then they could invalidate the sale and award substantial compensation. (ianal)
- notahacker 16y ago
  I'm guessing the high price they paid included some agreements to relinquish any potential IP claims. If it literally happened as described in the interview and the seller took the legal claim at face value they'd have surely settled for a lot less for the domain.
dotBen 16y ago
Two thoughts come to mind: 1) I wonder if they would have got the domain via the first contact if they had offered $250k, or even $125k there and then (ie no trademark route). When people email me about domains "asking if I'm interested in selling" it's usually because they are looking to pay $500 range. If it's worth $250k to you, use a lawyer and then the other person knows you're serious. I would have thought almost all unused domains are for sale at $250k. 2) No one seems to be thinking about the risk here, which is that they invested a lot of time, effort and money into the Groupon brand (inc trademarking it) but they didn't own the domain. That seems like quite a risk because, despite common assumption, you are not entitled to a domain just because you own the trademark (the other party could have other circumstances). Mr A R Mani legitimately owned and held armani.com until they had to privately buy him out and this dude could say he was building a community for roof-top gardeners (Gro Upon.com). Put up a dummy site for that and their case is tough.
silvia77 16y ago
Question: what if you have a launched business + the trademark to the name and someone still owns and won't sell the .com URL? We own the .co and all other extentions but the .com is preferred, would you go about thr same way groupon did it in this case?
- jackowayed 16y ago
  You can't force them to relinquish it. They should know that because you have the trademark, they can't launch anything with that name. They're probably just hoping that the longer they wait, the more invested you'll get in the name and the more you'll be willing to pay.
  - paolomaffei 16y ago
    Are you sure they can't just call themselves "name.com"?
- deleted 16y ago
  [deleted]
- notahacker 16y ago
  If the current owner registered the domain before you launched the business then you cant possibly prove "bad faith" and he has no need to compete with your trademark to earn parking fees from people that mistakenly link to that URL instead of your own. Have you approached the owner? If it's the domain I think it is then the current owner has a fairly large number of other which suggests he'll be quite happy to let it go if you make it financially worthwhile and quite happy to sit on it and earn parking income until then.
TotlolRon 16y ago
groupon.com Created on: 29-May-02 As domainers would say - ding-ding-ding we have a winner!
paolomaffei 16y ago
tl;dr Company doesn't offer enough for a domain that's their own company name .com. Domain name is probably worth less then $25k. Company launchs and grows really big. Company trademarks the domain and manage to buy it for $250k. They manage to call it a success.

50 points by AndrewWarner 16y ago

Not really a very cool way to get the domain.

d4ft 16y ago

Wow, is .25MM cheap for a domain name.. ever? I can't think of a scenario in which it would be. Could anyone enlighten me as to the economics of this?

Mc_Big_G 16y ago
It's cheap when your business is valued at $1 billion.
- JonM 16y ago
  Yeh, but it wasn't valued at that when they bought it.
  - city41 16y ago
    Which the article directly addresses: "I think we bought it in May 2009 or something like that for maybe $250,000, which seemed like a lot at the time and now it seems cheap."
AndrewWarner 16y ago
I think he meant that it's cheap in comparison to what they built. They built a business with huge revenues. When I asked him if he could at least say that Groupon generates over $100 million, I think he laughed and said that $100 million is small.
- djb_hackernews 16y ago
  Hmm. I did some math here-> http://news.ycombinator.com/item?id=1338758 http://news.ycombinator.com/item?id=1338758 a while ago. I figured 175M revenue. If 100M is small, I must have been way off.
d4ft 16y ago
I mean I get that Groupon is a huge business. I guess the question is are domain name prices relative? If, for instance, this was a public company, and this was disclosed, I would be a pissed off shareholder. Is it better than taking the corporate jet on a family vacation? Yes. Does that make it a good business investment? Don't know. Obviously Groupon is not a public company, but it seems like you could get a much higher ROI on a quarter of million dollars invested in the primary product as opposed to domain name. Maybe not, just my 2 cents.
- qq66 16y ago
  For trendy consumer startups like Twitter and Groupon, I can imagine that the name does affect word-of-mouth. But in general, I think most products could be called anything and succeed. Meebo is an idiotic name but they have millions of users because their product is solid.
  - pbhjpbhj 16y ago
    I upvoted you but I disagree completely. Names are of vital importance. Meebo may sound idiotic to you but it's rhythm and sound fit the web-2.0 ethos, it's short, easy to spell, easy to share, lends itself to verb-ising, including "me" suggests personal communication and "-bo" links with other site name (I've never heard of it, but I'm guessing it's a myspace/bebo mix based on the name) ...
    - qq66 16y ago
      I think most opinions of names are post-hoc rationalizations. I think that if Meebo was a failure we would all think it was a stupid name.
      - pbhjpbhj 16y ago
        When Snickers started in Britain everyone expressed the idea that it sounded stupid and Mars Co used this as part of the advertising angle ("[corny French accent]'av' you got the snickers?"). Was/Is it a better name than Marathon? Don't know. Also are you really claiming that you're the only person able to avoid post hoc analysis? Or indeed that you're immune to it. Perhaps you only think it sounds stupid because you think the product is stupid or because of the style they use to market it.
alex_h 16y ago
I was surprised by this. Sure, 250k is tiny compared to the current value of Groupon, but they were also in a superior bargaining position and had crafted a situation where the domain was practically worthless to the original owner. I would have thought they could have talked him down to <100k
paolomaffei 16y ago
Well, for sex.com or x.com it is :)

Mc_Big_G 16y ago

I believe dropbox did exactly the same thing. The lesson here is that you should get a trademark in addition to the domain. Essentially, this makes squatting pretty useless without the trademark.

vegashacker 16y ago
Well, $250,000 for a non-executed idea isn't a bad payout.
- Mc_Big_G 16y ago
  Absolutely. However, it's an edge case.
there 16y ago
only because groupon said they were going to launch a business with that name, so the owner couldn't launch a similar business with the same name. he could have still squatted on the domain with an ad-filled landing page. if they tried to claim the domain (via an arbitration panel through the UDRP) by asserting ownership of the trademark, they would lose because the domain name was registered before the trademark was applied for.
pbhjpbhj 16y ago
>The lesson here is that you should get a trademark in addition to the domain. Trademarks (in the UK) are both a registered and an unregistered right. You get a trademark by using a mark that is suitable to identify the source of goods or services. A website, for example, is a service and so their is an automatically established IP right for the original owners. Marks are registered in a particular ["Nice"] classification and only protect against other following uses in that same classification. Strictly (at least in Europe, AFAICT) someone else can use your mark in your field of commerce too provided there is no cause for confusion as to the origin - eg disparate geographical locations. But cost of lawyers and the assumption of confusion tend to rule against this.
ohashi 16y ago
I love how ridiculous this statement is. Someone owns a domain name and then another person creates a company and files for a trademark and the original person is the squatter. Violating their intellectual property. I call bullshit. To get that domain through UDRP they shouldn't stand a chance if registration date of the domain is before trademark or use. It couldn't be registered in bad faith no matter what they were using it for. Of course, there are all sorts of terrible judges on UDRP panels and it's like russian roulette.

ig1 16y ago

Um. They should speak to lawyers right now, the UK has something called "Groundless Threats" protection for trademarks. The guy in question could quite possibly sue Groupon for a substantial amount and get the domain name back. Groupon knew the guy had the name and the intention to use it for a coupon service, and they then went ahead and registered the guys (unregistered) trademark with full knowledge that the guy was planning on using it (+ with the intention of forcing him to give up the domain). They then used the trademark to make him give up the domain. How could Groupon's lawyers not have warned them that this was a bad idea ?

shpxnvz 16y ago
Did the guy really have rights to the name? In the U.S., for instance, you have to actually use the mark in trade in order to establish a right to it - simply having thought of a use isn't enough. Is there no similar requirement in the UK?
- ig1 16y ago
  It's an interesting question, and I think one that would have to be decided before a court. Certainly trademarks for prelaunch products have been granted protection before if there's a clear intent for usage (for example the iPad). Given this guy had a specific plan and turned down a substantial amount of money for the domain, that's likely to play in his favour proving that he both had intent and that the brand had value. However in this case he doesn't even need to prove his usage was trademark worthy, the Groundless Threats doctrine just requires you to be threatened unfairly, which given it seems pretty clear from the interview that the trademark was registered in bad faith (knowing a competitor was going to use it) it seems likely to be covered. If a court finds he was made to sell his domain under duress from a groundless trademark threat then they could invalidate the sale and award substantial compensation. (ianal)
notahacker 16y ago
I'm guessing the high price they paid included some agreements to relinquish any potential IP claims. If it literally happened as described in the interview and the seller took the legal claim at face value they'd have surely settled for a lot less for the domain.

dotBen 16y ago

Two thoughts come to mind: 1) I wonder if they would have got the domain via the first contact if they had offered $250k, or even $125k there and then (ie no trademark route). When people email me about domains "asking if I'm interested in selling" it's usually because they are looking to pay $500 range. If it's worth $250k to you, use a lawyer and then the other person knows you're serious. I would have thought almost all unused domains are for sale at $250k. 2) No one seems to be thinking about the risk here, which is that they invested a lot of time, effort and money into the Groupon brand (inc trademarking it) but they didn't own the domain. That seems like quite a risk because, despite common assumption, you are not entitled to a domain just because you own the trademark (the other party could have other circumstances). Mr A R Mani legitimately owned and held armani.com until they had to privately buy him out and this dude could say he was building a community for roof-top gardeners (Gro Upon.com). Put up a dummy site for that and their case is tough.

silvia77 16y ago

Question: what if you have a launched business + the trademark to the name and someone still owns and won't sell the .com URL? We own the .co and all other extentions but the .com is preferred, would you go about thr same way groupon did it in this case?

jackowayed 16y ago
You can't force them to relinquish it. They should know that because you have the trademark, they can't launch anything with that name. They're probably just hoping that the longer they wait, the more invested you'll get in the name and the more you'll be willing to pay.
- paolomaffei 16y ago
  Are you sure they can't just call themselves "name.com"?
deleted 16y ago
[deleted]
notahacker 16y ago
If the current owner registered the domain before you launched the business then you cant possibly prove "bad faith" and he has no need to compete with your trademark to earn parking fees from people that mistakenly link to that URL instead of your own. Have you approached the owner? If it's the domain I think it is then the current owner has a fairly large number of other which suggests he'll be quite happy to let it go if you make it financially worthwhile and quite happy to sit on it and earn parking income until then.

TotlolRon 16y ago

groupon.com Created on: 29-May-02 As domainers would say - ding-ding-ding we have a winner!

paolomaffei 16y ago

tl;dr Company doesn't offer enough for a domain that's their own company name .com. Domain name is probably worth less then $25k. Company launchs and grows really big. Company trademarks the domain and manage to buy it for $250k. They manage to call it a success.