Even though it only lasted two or three months, there were a lot of twists in the story of how my brother and I purchased Afternic.com in 2002. It was a comedy of errors that in the end worked out great for everyone.
I had called Register.com to discuss a referral deal when they turned the discussion towards purchase. Of course, I said, “how much?” and they said make an offer. They had announced they were shutting it down, so I said that means they must value it at about nothing. Right? Somehow, we agreed on an amount around $400,000.
Only one problem: we didn’t have the money. I had an MBA but no track record in business and in hindsight I was naive about how hard it is to raise investment quickly. The biggest bank in South Florida laughed at the idea of borrowing funds for a website, so that option was off the table. My rep there didn’t get it – she thought I wanted something like a home page. LOL. Friends and family were not interested. I did raise $25,000 from two former classmates in my executive MBA program but one of them – the one who put in $20,000 – got cold feet and I refunded her investment about two months later.
I thought I was going to have to cancel the deal. My brother and I discussed how it might go when we told them. Then, out of the blue, Register called. Said, very sorry, but after legal review, they could not sell us the user list – the database – because of the privacy agreements with their customers. They were canceling, not us!
We agreed to leave the database and the software that ran the website out of the transaction. It would become a domain name only transaction (plus some email marketing service for some emails to the old customer base). And they would drop the price about 75% to around $100K.
Deal! I was able to handle that with a home equity loan, which was easy to get back then.
Turns out even that refunded investment was a twist of good luck – we had needed just that much money for just that period of time to cover an earnest money deposit before my home equity line funds became available!
Michael and I thought we already had a better website on NameBuySell.com – I just had to rebrand it – so we didn’t value the technology that ran the old Afternic.
Register agreed to email the old user base up to 12 times for a fee each time. We used two emails and passed on the rest.
I finished up a software development contract developing the software for an embedded Linux USB module for aircraft for Gables Engineering in Coral Gables, FL about one week before we closed the transaction. I became the first full-time employee of the New Afternic, working from a spare bedroom in my house in Plantation, FL.
I rushed to rebrand NameBuySell.com to Afternic.com in one week. We came up with a promotion to sell all memberships for $1 to celebrate our becoming the New Afternic.
I was extremely nervous because none of my websites had ever had to handle as much traffic as Afternic.com would get. Turns out one managed server running PHP/MySQL replaced several servers running Cold Fusion for Old Afternic. And it worked great.
We owned the #1 site in the US for aftermarket domains according to Alexa.
