Most people who know me (most of my friends on Facebook, for example) know me from my days at Afternic.com. I was President, then GM, of Afternic.com from 2002-2007. My brother and I purchased Afternic.com for a little over $100,000 in December of 2002, worked on it for about 5 years, and sold it to NameMedia in 2006 for a happy ending. I worked for NameMedia for almost a year during the transition.
I often get asked to tell our story because in some ways it is dramatic and parallels the Internet industry stereotypically. Afternic 1G was purchased by Register.com for $48 million in stock – obviously an “Internet bubble” transaction. Then came the bust, when my brother and I stepped into the story, and then several years of steady growth from a lot of fun work with a great team.
(We used to call our Afternic the New Afternic but that would be confusing now so I’m calling it 2G, implying that NameMedia’s current version is 3G… naturally.)
Now I’ll start from the beginning.
In the middle of 2001, my brother Michael and I had developed a small domain name exchange called NameBuySell.com. (I’ve always liked the business listing site BizBuySell.com so we copied their name somewhat.) It was my third website, his first. I’m still not sure how he talked me into developing a third website when my first two were not making any money. We never thought NameBuySell.com would be more than a side business. We just needed a place to market our own names, most of which were acquired in the .us landrush. The popular sites were Afternic.com, GreatDomains.com, and Sedo.co.uk and they were generally having a lot of trouble coping with the dot bomb. We thought their decline presented a market condition suitable for growing our side business.
We worked nights and weekends developing the site. Michael wrote most of the copy and designed the business rules. I did the rest.
We operated NameBuySell.com for about three months, growing to 200 members and 20,000 listings. Members seemed to like it and we were making constant improvements. Then one of our members pointed out an announcement from Register.com: they were shutting down Afternic.com.
Having just finished my executive MBA about a year earlier I was full of motivation to make some win-win deals so I picked up the phone and called Register.com to talk about possibly referring their members to NameBuySell.com for some kind of referral fee. I was thinking we might offer them 100% of the then $5 annual membership fee we received from all new signups. Register.com steered the conversation to a complete acquisition.
I’ll reminisce about the acquisition negotiation in another post. It was very unusual with some funny twists.
