MP3.com Domain For Sale For $1M+, Is It Worth It? [Michael Robertson]
I recently got a call from the owner of this iconic domain name asking if I was interested in buying the MP3.com domain name. MP3.com was the digital music pioneer I founded which offered free MP3 downloads of initially unsigned bands, but eventually the biggest names in music.
It also sold the first MP3 player in the US, built the first cloud locker with other advances which made it the largest digital music company in the world at the time. It went public on NASDAQ in 1999 and eventually sold to Vivendi/Universal for about $400 million. Vivendi sold the domain name to CNET, which was then purchased by the media conglomerate CBS who called me and told me of a pending auction of their domain names.
While MP3.com used to be a technology and industry leader, it has now withered to irrelevance under a series of new owners. Presumably since I was the founder and CEO of the original MP3.com, CBS called me asking if I would buy it to preempt an auction. They suggested they believed it was worth multiple millions of dollars.
There's no denying it's a memorable and historic domain name. Many people think all it takes for business success is to secure a desirable domain name. They're wrong. Creating a viable business requires more than just a domain name. It's not a shortcut to success. In fact, the cost of digital real estate may hurt your chances of success by siphoning money away from making an investment in the core service. Buying an expensive domain name is like renting a location on Rodeo Drive or Times Square. Plenty of businesses fail after renting a desirable location.
Some might argue that MP3.com is an ultra special domain name, but they'd be wrong. There's plenty of good domain names like music.com, songs.com, tunes.com, etc. Have you ever visited those domains? Do you think any of those are profitable companies? Most of the huge net successes have wacky, made-up terms (Google, eBay, PayPal, Skype, Facebook). To those unsophisticated in business it's all about the domain, but those in business know it's about what comes after the domain.
MP3.com's success was predicated on what we did after you got to the domain. When I started the company, digital music downloads were unheard of. There were music web sites but they had pictures of bands or 30 second clips – virtually none had full song downloads. None of the large net companies were doing music. I decided MP3.com would give free hosting to bands in return for making at least one song available for free, which gave us a legal repository of full-length music files to distribute for free. Our decision to offer full song MP3 downloads which took 20-30 minutes to complete even with the fastest modems was dismissed as foolish. But those decisions and many more controversial decisions such as accepting every artist are what led to MP3.com's dominance in the digital music business, not the short domain name
I spoke to a few former employees who contend that MP3.com would be relevant today because it was far ahead of its time, but I think that's their hearts talking not their minds. While it's true that today's replacements only provide a portion of what MP3.com offered, the world has dramatically changed. MP3.com was about downloads. The world has moved beyond the download to streaming access. If you doubt this, look at the world's largest music service YouTube, which is 100% streaming. The competitive landscape today looks far different as does the opportunity around the audio business.
I politely declined to place a private bid for MP3.com. They mentioned they'd already received an unsolicited 7-digit offer. I was surprised to hear that since I simply don't see the value, but those looking for a shortcut in business will spend stupid money on a domain name. (But you know there's no shortcuts in business, right?) If I owned MP3.com I wouldn't launch a download service. Instead I'd focus on a streaming service something like UberStations which I recently launched. This real-time guide to the entire world of radio plays thousands of stations in a streamlined web experience. Visit the service and you'll see stations update as songs play, plus a nifty recommendation engine which finds other shows or song to listen to from thousands of stations. Not only is this a tremendous improvement in the radio service for users – something the big net companies are not doing, but the domain cost me only $10.
What do you think? What would you pay for the MP3.com domain name? What would you do with it? Am I missing a gigantic opportunity?
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