Worth more than the company on it, but easier to take than real estate
Voice.com sold for 30 million dollars. A record in a database someone else keeps, changeable by a forged letter or a warrant. The asset is real, but the title is not in the holder's hands.
Voice.com sold for 30 million dollars.
June 2019. One word, five letters and there is no website behind it.
More than most companies will ever be worth.
That’s the highest public price that has ever been paid for a domain name on its own.
The seller was a publicly traded company called MicroStrategy. The buyer was a blockchain startup called Block.one right after it got a more than one billion dollar capital raise.
A domain with such a value goes straight to the company’s balance sheet besides trademarks and real estate, something that the company owns.
In reality, however, the company only owns one record in a database. In a database that is run by someone else.
The .com works because the registry that handles the database points the domain name where it is being told.
This registry is a company seated in Reston, Virginia and it holds an agreement with the US Department of Commerce. Owning voice.com or any other .com simply means that the corresponding record in the registry’s database holds you as the usage rights holder.
This setup has two major consequences. On one hand, the ownership of a domain is purely a matter of a record in a database. On the other hand, this record with the proper procedure, or even with an abusive one, can be changed.
In 1995 someone managed to take over sex.com with a forged letter. The registrar accepted a fake document, as the court later stated, without communicating with the owner. When the case reached the Ninth Circuit in 2003, it stated that the domain name is property that can be bought, sold and stolen. And it was stolen exactly as a domain can be stolen at all. The registry changed the corresponding record.
In October 2020, the U.S. Department of Justice seized 92 domains with a warrant. No server has been taken down. Nobody stepped foot in any building. The reasoning behind the seizure was one single straightforward sentence. All the 92 domains are “owned and operated by United States companies”. According to this, since the domains are held by American companies, they belong under American jurisdiction.
A domain name always points wherever the registry directs it. The final decision, however, is not in the hands of the domain usage rights holder, but rather in the hands of the legal authority to which the registry answers.
So this is what the balance sheet cannot tell you.
The ownership rights of real estate are protected by the laws of the land on which it sits. But the ownership over the usage of a .com domain depends on whom the registry answers to, that is another country’s jurisdiction. Should a court decide on the ownership of the domain rights, it can do it without ever touching any server.
The title over a domain name runs through ICANN, the registry and the registrar. The domain usage rights holder does not control any of those. The essence of the asset, in fact, is this institutional and legal background. Even if you pay an eight-figure number or you’re part of a due diligence auditing team.
The paid amount and the acquired rights were both holding real value.
What the buyer actually bought is the right for his name being registered as the user of the domain in the registry. And this should hold until the registry or an authority above it decides otherwise.
Magyar változat: [zona.hu/a-domain-tobbet-erhet-mint-maga-a-vallalat/]