Everybody’s looking for the typo, or a misplaced decimal. Could a domain really be worth $300-400 million? Could the Wall Street Journal have made three typographical errors in one article? Doubtful, the headline did use the word “jackpot.”
And pouring money into that jackpot to purchase Business.com might be WSJ parent company Dow Jones. So this isn’t just people familiar with the matter. It’s a true inside scoop.
WSJ reporter Dennis K. Berman also says local news giant The New York Times Co. is probably the main competition for winning bid. At least, Berman says, “according to people familiar with the matter.”
Get a call from upstairs, did we Dennis?
Business.com was last bought in 1999 for $7.5 million, a sum, even at the height of the dotcom bubble, critics thought was ridiculous. At a price of a third of a billion dollars, that’ll be, if someone actually pays it, quite the return on investment.
That’s a profit of 5000 percent. At least, I think that’s what the calculator says.
But that may be right for a company growing at 50 percent year-over-year, pulling $15 million annually. Or, as one commentator has noted, 20 years of earnings up front may seem a little steep.
So why is it commanding such a price? (Shhh. Don’t say “bubble.”)
Marketing Pilgrim‘s Andy Beal, who admits to being one of the multitudes of scoffers in 1999, says, “you’d have to suspect that the domain name and branding is playing a large part in the valuation.”
That, and perhaps the success of Google has something to do with it as well. Business.com is a search engine, and the search engine business is booming.
“Essentially, the search engine could be the dream acquisition of many publishers, since its focus is on the business world, and businesses understand the importance of paying for search traffic and authority links now more than ever before,” says SearchEngineJournal‘s Loren Baker, who has a nice discussion going in the site’s comments section.
