Trying to create a deal for a domain

bt25

I have a chance to get the use of a very good domain name for my website. I feel it will have a very positive affect on the uptake of potential customers and is VERY memorable. The domain name is currently not being used as the project it was originally purchased for fell through and the owner didn't make use of it after that point. I have had contact with him and he is interested in my website as a good use for the domain, however that is where the issue is.

He doesn't have any interest in selling the domain straight away, if he did he would get a good price for it which I couldn't cover honestly at this stage. Instead he has asked the following:

"Can you come up with some agreement where you borrow the domain for a certain period of time, and then either buy it (cash+stock or just stock) or return it if your venture doesn't work out?"

[font=Helvetica Neue, Helvetica, Arial, sans-serif]The biggest concern I have here is brand ownership. The domain will dictate the brand and I need to make sure that 1. I'm not getting shafted but 2. that I don't put my time and effort building a brand to then have it taken away at the end of that period.[/font]

[font=Helvetica Neue, Helvetica, Arial, sans-serif]Thoughts?[/font]

bren2002

Get a different domian. He'll always control it and can pull the plug at anytime.

Try one of the alternate TLDs .io .irish etc

Or something imagnative harmonie is a company that uses harmon.ie as their domain.

Sesame

How about this: Pay him 30/40/50% of what he is asking for it at the outset.
1. Return domain name if the project doesn't work out.
2. In 18 months/however long you agree, pay him the remaining 70/60/50% if you want to keep the domain name.

I don't like the request for stock or having to send him a chunk of profits. He sounds like he wants to sell to you as no one else is likely to be interested but he wants to be in on it. The above proposal may appeal to him if his valuation is realistic.

bt25

Sesame wrote: »

How about this: Pay him 30/40/50% of what he is asking for it at the outset.
1. Return domain name if the project doesn't work out.
2. In 18 months/however long you agree, pay him the remaining 70/60/50% if you want to keep the domain name.

I don't like the request for stock or having to send him a chunk of profits. He sounds like he wants to sell to you as no one else is likely to be interested but he wants to be in on it. The above proposal may appeal to him if his valuation is realistic.

You might be right though I do know others are looking for the same domain. That said, he hasn't given me any idea on how much he is actually looking for in money. There is one other point which is that he is a known and from what I can see very experienced company owner located in the states. Is there any value in having him invested in the company?

Sesame

Possibly but do you want his stake to be paid for solely by "lending" you the domain. If its stock, do you really want him owning a percentage with no other investment from him?
Would he provide time/money/connections?
If no, then I can't see any benefit to having him as an investor.
But if he would, and if you want to share it, then meet him and follow your instinct. I do think, if your livelihood is on the line, a real life meeting would be needed to gauge it.

bt25

Sesame wrote: »

if your livelihood is on the line, a real life meeting would be needed to gauge it.

Agree, though I'm in Ireland and he is in America so not as easy though have done the skype version. That aside, you're right. What we're talking about isn't small. Maybe it should just come down to an amount though it will likely have to be a bit more flexible as I don't have the money up front to cover anything really meaningful.

Sesame

If you don't have it up front then a legal promise or something in writing to either return it or pay a certain amount in the future.
If he says no, then I'd look for something else, but I bet he will agree.

Graham

I wouldn't touch an open ended arrangement like this. If you're going to commit significant resources to building a business around a specific domain, it need to be yours or at the very least it needs to be guaranteed that it will be yours.

You could look at domain lease-purchase/escrow, there are a few reputable operators in the space (escrow.com for example). You would agree a price/payment-schedule up-front, the domain would transfer to the lease/escrow company, at the end of the payment period the domain transfers to you. Should you stop paying, the domain reverts to the original owner.

Axwell

Why that domain - is it related to a business name, a product or other?

Why not just go with the same domain name under a different tld if its not going to be a case of passing off and a business name issue?

The whole renting the domain sounds like a headache and he will own and control the domain at all times unless you buy it from him, that gives him too much control and power over your website and brand - avoid!

Atlantic Dawn

Names are for tombstones, if the product is good once the name is easy to spell it will be successful, look at Facebook, Twitter etc, all fairly foolish names from the outset.

mneylon

Leasing domains is a complex process.
There are several specialised lawyers who can help set up a *sane* solution for you, but the domain holder would have to agree to the domain being held in escrow (of sorts) for the duration of the agreement.

Unless you are comfortable with the scenario you'd be better off getting a different domain name and focussing on building a business.

devildriver

As others have said this all sounds a bit complicated for a domain name. Make the domain owner a single offer to buy the domain outright. If the offer is not accepted then look at alternate tlds or similar names.

jmcc

What is the market for your business?

Is it global?
If so, .com TLD is your best option for a domain name.

Is it the Irish market?
If so, use the .ie ccTLD.

I would not recommend the use of an unknown ccTLD like .io or any of the new gTLDs at the moment. While some of the new gTLDs are doing OK, many are not and their web usage and brand recognition is low. (The bullsh*t that ICANN published about recognition of new gTLDs is just that.) The number of domain names in their zones is not indicative of quality or development in the gTLD. Using .irish may be a waste of time for the Irish market as the market is dominated by .ie and .com. Though it was intended to be used for the Irish Diaspora, its usage is low (circa 2K registrations versus over 200K .ie registrations).

You should keep in mind, as others have pointed out, that you are building a brand. A generic domain name may be appealing but the reality is that they are very hard to market and extremely difficult to protect. With a brand, you could possibly get a trademark. That is not so easy with a generic domain name.

Domain hacks like harmon.ie may sound good in theory but they lose traffic to people typing harmonie.ie or harmonie.com. They can be quite problematic and often fail the phone test (can you tell someone the domain name and will they hear it correctly the first time?).

Regards...jmcc

bt25

jmcc wrote: »

What is the market for your business?

Is it global?
If so, .com TLD is your best option for a domain name.

Is it the Irish market?
If so, use the .ie ccTLD.

I would not recommend the use of an unknown ccTLD like .io or any of the new gTLDs at the moment. While some of the new gTLDs are doing OK, many are not and their web usage and brand recognition is low. (The bullsh*t that ICANN published about recognition of new gTLDs is just that.) The number of domain names in their zones is not indicative of quality or development in the gTLD. Using .irish may be a waste of time for the Irish market as the market is dominated by .ie and .com. Though it was intended to be used for the Irish Diaspora, its usage is low (circa 2K registrations versus over 200K .ie registrations).

You should keep in mind, as others have pointed out, that you are building a brand. A generic domain name may be appealing but the reality is that they are very hard to market and extremely difficult to protect. With a brand, you could possibly get a trademark. That is not so easy with a generic domain name.

Domain hacks like harmon.ie may sound good in theory but they lose traffic to people typing harmonie.ie or harmonie.com. They can be quite problematic and often fail the phone test (can you tell someone the domain name and will they hear it correctly the first time?).

Regards...jmcc

Very good point. Where do you get this kind of market info?

Dardania

Does the domain owenr have any trademarks associated with the domain? This is where a potential messy issue could arise...

bt25

Dardania wrote: »

Does the domain owenr have any trademarks associated with the domain? This is where a potential messy issue could arise...

So far as I can tell, there is nothing and they have said the same.

jmcc

bt25 wrote: »

Very good point. Where do you get this kind of market info?

I work with domain names and track every com/net/org/biz/info/mobi/asia, detected ccTLD domains and new gTLD domains and the databases here have been doing it since 2000. (They cover about 485 million domain names and most have been deleted and not reregistered.) I also do monthly web usage surveys of various TLDs to see how websites are being used in the TLD. The last major one in August 2016 covered all domains in the new gTLDs (over 21 million). I also work on mapping TLD registrations by country each month by registrar and by nameserver. The latest com/net/org/biz/info/mobi/asia country breakdowns for registrars are on the front page of the site.

As a rule of thumb, most of the main EU countries use their local ccTLD (.ie for Ireland, .uk for the UK) as their primary/first choice TLD. If you are targeting those markets specifically, it would be best to use a domain registered in one of those ccTLDs. The .eu might be an option to try cover all but in real terms, it has less than 5% of the domain market in most EU countries. The ccTLD/com share in most markets is 80% or more. The .com is also the de-facto US ccTLD (even though it has its own .us ccTLD).

Regards...jmcc