tom.com -Sold!

What price tom.com? Webb-site.com begins its coverage of the IPO by revealing the price that the company paid for its shiny second-hand domain name, setting a record for a domain purchase by a non-US buyer, and potentially a world record.

Tom.com - sold!
19th February 2000

If you think that tom.com is a catchy name, so did a guy called Tom, many years ago. As any webmaster knows, all the 3-letter domains went long ago. If you want one today, unless you get lucky and find one that has accidentally lapsed its registration, then you will have to pay top dollar.

That's exactly what the Hutchison/Cheung Kong spin-off has done. Webb-site.com has discovered that they bought tom.com for US$2,500,000 (HK$19.45m) on 7-Dec-99 from a company called Vortexx 2000 LLC, a company registered in the state of Nevada, USA, and doing business as Phoam Technologies.

A founder of Phoam is one Tom Meyer, one of the architects of the web-language known as Virtual Reality Modeling Language, or VRML. According to published documents on the history of VRML, Mr Meyer once had the catchy e-mail address, tom@tom.com. Mr Meyer declined to comment on the sale.

The price compares with the reported US$3.3m which Compaq paid for the domain altavista.com in Jul-98 and the record US$7.5m paid by business incubator eCompanies in Nov-99 for the domain business.com.

However, in exchange for the domain, Vortexx also received an option to subscribe for new shares in Tom.com Ltd at the IPO price worth US$1.5m (HK$11.625m at a fixed rate of US$=HK$7.75). Vortexx exercised the option on 9-Feb-00. The number of shares it gets will depend on the final IPO price. If this is set at the top of the range (HK$1.78), then Vortexx will get 6,530,898 shares. If you believe what the press is reporting about a grey market price of HK$7 per share, then that translates to a profit of HK$34.09m, increasing the total proceeds to HK$53.54m (US$6.88m). To break the world record set by Business.com, the price will have to go to $7.75 per share.

Even at US$2.5m, this is a record price paid by any non-US buyer for a domain name. Of course, getting people to remember the name is only half the battle.

One domain that Tom.com Ltd doesn't own is, ironically, the Chinese version, tom.com.cn, which is owned by Beijing Cinet Information Co Ltd. That company runs a set of domain names for free web-mail purposes.

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Tom.com - sold! 19th February 2000

Tom.com - sold!
19th February 2000