How much is a domain name worth? Apparently not $275,000, at least not to the Dallas Cowboys football organization.
Earlier this month, the Cowboys organization decided to bid on the domain name Cowboys.com, which was being sold through domain name register Moniker Online Services LLC. Moniker also holds auctions to sell off domain names owned by others.
According to Monte Cahn, co-founder and CEO of Moniker, the Cowboys submitted an absentee bidder form and paid a $499 fee to participate in the Oct. 12 auction.
The Cowboys were interested in obtaining the domain name Cowboys.com, said Cowboys spokesman Rich Dalrymple.
"We decided to go after Cowboys.com because we thought it was an opportunity to get hold of another domain name," Dalrymple said. "There are lots of people who have Web sites that are related to the Cowboys and when we see an opportunity to obtain a Web site name and it's not an unreasonable commitment financially we go ahead and do it."
The Cowboys won the auction but had something akin to sticker shock when they saw that they had bid $275,000 for the name rather than the $275 they thought they had bid, Dalrymple said.
"We didn't realize what the price was. Our representatives misunderstood what the pricing system was, and it was a simple mistake," he said. "So we just said we didn't understand the structure of the auction and we basically withdrew our bid and decided we weren't going to pay that amount."
Cahn said it was possible for the Cowboys to be confused but added that the entire situation was a bit surreal.
"It was probably the most surprising bidding process or bidding situation in one of our live auctions that I've ever experienced," he said. "They submitted an absentee bid form; the price range of the domain name was posted on our Web site in the $100,000 to the $500,000 category and the opening bid started off at $225,000."
Cahn admitted that it was possible his phone representative didn't say the word thousand after every bid and that could have confused the Cowboys.
"Now just like with [traditional] auctions, the auctioneer doesn't typically say 'thousand' at the end of every single confirmed bid on the floor. Once it starts off at $255,000, the next bid goes to $260 and $275 and so on and so forth, but our tapes reveal that $275,000 was repeated on the floor, but the phone representative might not have repeated $275,000," Cahn said. "However it is Cowboys.com, it's a premier domain name, and the minimum bid price was $250,000 and it was known."
Cahn said technically he could have required the Cowboys to honor their bid because the organization signed the auction bid form, but he knew the domain name had interest from other people.
"And if they were going to let a key brand like that go, then it was probably going to be picked up by somebody else that could use the name for Western wear or cowboy dating, and that's exactly what happened," he said. "The domain name bid up between three or four bidders, and it eventually sold for $370,000 to a U.S. investment group. So it turned out good. And unfortunately for them, they don't end up with a key brand that's probably something that's going to be more important for them in the future."
Cahn added that the highest price paid for a domain name at the auction was $2.2 million for Computer.com, which was purchased by an investment company from outside the U.S.