What determines the value of a name? "The market," says Neubeck, who recalls receiving e-mails from people who were incensed that she was unwilling to sell them drugs.com for $70, the typical cost of registering a domain name.
Drugs.com was auctioned on Universal City, California-based GreatDomains.com. As of last week the site was taking bids on more than 115,000 names; leading the pack was loans.com, with a current bid of $1.25 million. According to statistics kept by the broker, the average domain name sells for $14,500. "Generally we sell more names out of what's called the bargain showcase," where names are listed for $500 to $1,000, says customer-service manager Daryl Antoine.
An unnamed Internet developer just said yes to drugs.com late last week, and bought the domain name at auction for US$823,456. A flurry of eleventh-hour bids drove the price up more than $500,000 that afternoon, after the domain name languished on the auction block for nearly a month. The CEO of GreatDomains.com, the brokerage firm that ran the auction, said that the buyer is "a well-known player" in Internet business. His name will be revealed Friday when he returns from a trip abroad.
"He's buying it to use it," said Jeffrey Tinsley, who pocketed a commission of $82,345, 10 percent of the selling price. "He's not a speculator at all.... He's got plans for the name."
Several pharmaceutical companies placed bids on the domain, Tinsley said.
GreatDomains conducted the auction on behalf of Eric MacIver, an Internet entrepreneur from Mesa, Arizona. MacIver, planning a start-up pharmaceutical distribution Web site, purchased an option to buy the site in May from Bonnie Neubeck, a Minnesota businesswoman.
MacIver, who celebrated his 21st birthday and the sale with a limousine-driven night on the town Saturday, abandoned development plans for drugs.com because of strict pharmaceutical sale regulations. Though Tinsley had said he would not be surprised by a multi-million dollar bid, MacIver said he was happy with the price.
"We were hoping for over a million, but we were more or less expecting between $750,000 and a million," MacIver said.
MacIver, who dropped out of Northern Arizona University after his sophomore year, would not say how much he paid Neubeck for the rights to the domain.
GreatDomains has more than 55,000 domain names for sale on its Web site, including Loans.com, with a $480,000 bid; Slim.com, with a $200,000 bid; and Shoppingmall.com, with a $150,000 bid.
"I hope it goes for what wallstreet.com went for, and then some," said Steve Newman, executive vice president of GreatDomains.com. Wallstreet.com sold to an online casino in April for a whopping $1.03 million.
But the auction closes 28 July, and, as of Monday afternoon, no one had even bid the minimum of $150,000. The offering leaves some analysts questioning whether drugs.com may be a bit too, well, generic.
"I wonder if the name is so general as to not communicate any brand names, so I'm not sure how valuable it is," said Lauren Levitan, an analyst with investment firm BancBoston Robertson Stephens.
For any of the giants of the US pharmaceutical industry (Bristol-Myers Squibb's market value exceeds $140 billion), tossing down $1 million for the domain name "would be less than peanuts," said Hamant Shah, a pharmaceutical market analyst with HKS and Co.
If one of the big drug companies bites, it will likely be to expand its mail-order business. Many have operations that fill common prescriptions -- asthma inhalers, birth control pills, diabetes insulin -- through the mail. It's the same lucrative business that upstarts like Drugstore.com and PlanetRx are after.
Reluctant to lose their mail-order business to Web shops, pharmaceutical companies are exploring ways to expand into e-commerce, said Cheryl Skolnick, a pharmaceutical industry analyst with BancBoston.
Still, drugs.com is proving to be a tough sell.
"We're still nowhere near what we expected it to get," GreatDomains CEO Jeffrey Tinsley said. The problem is, even a simple URL like drugs.com may not be worth the investment required to develop a big-time e-commerce site.
Analysts say companies may be better off using their own brands -- no matter that the names might be confused with accounting firms. What's more, most of the big pharmaceutical companies already own household names worth billions of branding dollars -- like Tylenol, Viagra, and Rogaine.
Besides, Shah says, no one knows whether online drug retailing will ever catch on. State and federal regulations might cause setbacks. And suffering patients won't wait for a FedEx delivery.
"It's not like buying a CD or a book. There's the potential, but nobody knows how much," Shah said.
Despite the doubting analysts, Neubeck and fellow domain-name investors think there's a great market for their names. GreatDomains said Neubeck has received unsolicited offers of more than $100,000 for drugs.com, and the site gets more than 4,000 hits every day. Sure, some of those Web surfers are junkies looking to score some smack.com, but Neubeck estimates that about half are seeking legal drugs.
"Whatever drugs.com sells for will be a bargain," Rick Schwartz, president of Domainseller.com, a domain-name speculation and development firm, said in an email. "The mainstream hasn't figured out the power of the domain yet."
Schwartz claims he has spent $1 million to gobble up more than 3,000 domain names in the belief that electronic real estate will one day go through the roof.
Of drugs.com's potential, Schwartz said, "Two million dollars, $5 million, $10 million, $50 million -- it's all a drop in the bucket if you understand how to use the Internet to sell product."
Neubeck, who sold her horse and her husband's Porsche to invest in the Internet and Web-domain speculation, hopes the gamble pays off big.
"I figured this was the way business is going to be done in the future," she said.