Bidders High on Drugs.com?
by Lindsey Arent
4:45 p.m. Aug. 5, 1999 PDT
WiredNews.com
There's some really good drugs.com on the market worth a potential US$1 million.
That's the belief of a confident domain-broker who's auctioning off rights to that name.
The auction for what could be one of the Internet's most lucrative domain names is ticking toward its 5 p.m., Friday finish, and Internet real estate types are jittering like junkies over the perceived millions a valuable name like drugs.com could rake in.
Many seem to think it could be the Wal-Mart of the pharmaceuticals business. Others believe drugs.com could turn into fools.gold.
"This is the last time that this name will ever be available," said Jeffrey Tinsley, CEO of GreatDomains.com, the self-proclaimed leading domain name brokerage firm that is running the auction.
"Drugs.com will give the person that buys it the opportunity to be one of the major players in the pharmaceuticals market."
Or not. Some experts contend that although potentially valuable, a domain like drugs.com is worthless without substance.
In fact, as of Thursday afternoon, the high bid listed on GreatDomains.com was $270,000, and Tinsley declined to divulge who had made that bid. Tinsley said he was convinced that all the major pharmaceutical companies were taking a wait-and-see approach before they entered the auction "because they don't want to push the price too high."
Tinsley also declined to identify any of the companies he expects will bid. But a press release from GreatDomains identified more than 20 firms it believes are likely to bid, including Pfizer, Merck, and Sav-On.
With most of the best domain names gone, Net entrepreneurs are scrambling to cash in on the last of a dying breed of catchy, monosyllabic dot-com names. Those with a provocative word are especially lust-worthy.
Drugs.com "is so easily brandable the owner won't need to spend the kind of money that other companies do to generate public awareness.... It has a built-in client base," Tinsley said.
With Drugstore.com's recent $2 billion IPO bonanza a mere flashback, online companies are vying to corner what will be a nearly $2 billion market in online drugs, vitamins, personal care, and cosmetics by 2003, according to research firm Jupiter Communications.
But even with drugs.com's ultimate head start -- a domain name that is easily accessed and remembered -- a name alone isn't enough to warrant success, analysts say.
"In order to succeed, drugs.com needs to build a brand around it," said Jupiter analyst Preston Dodd.
"Right now, it doesn't have any meaning. You’ve got to make sure that everything works properly, you need an infrastructure, and you've got to put a face and a brand to that name. You need to build trust with the customers. All those things have little to do with the name."
While other Net companies involved in health-related ventures, like Healtheon and DrKoop.com, have seen shares surge in first-day trading, most of them are struggling to turn a profit.
But even the specter of red ink isn't enough to deter diehard Net capitalists from jonesing for drugs.com, Tinsley said.
"It's bigger than I even thought," Tinsley said. "There are some huge companies that have expressed interest, and they will be bidding on Friday."
Aside from companies hoping to cash in on the pharmaceutical market, could drugs.com appeal to other, uh, more alternative types of drug enthusiasts? Not likely, said John Holmstrom, multimedia director for High Times magazine.
"I'd imagine that drugs.com is going to be in the legitimate end of the business. No one in our end of the business has $2 million for a domain name."
GreatDomains is running the auction for the domain's original owner, Bonnie Neubeck of Minneapolis, and will take an unspecified percentage of the final sale, officials said. Neubeck could not be reached for comment.
The auction closes Friday at 5 p.m. PDT and can be viewed on the GreatDomains site.