Reauction of Toys.com goes for $5.1M.
It’s not over yet (subject to court approval), but it looks like Toys ‘R’ Us will be purchasing the Toys.com domain name for $5.1M. The company outbid National A-1 Advertising in an auction that was live blogged on DirectNavigation.com. (DirectNavigation.com is written by Larry Fischer, who attended the teleconference auction in his role with Faculty Lounge Partners.)
The domain originally sold for $1.25M in an auction that Toys ‘R’ Us participated in. So it begs the question, why four times as much now?
Sources tell Domain Name Wire that there was some horse trading in the initial auction. Faculty Lounge Partners bought Toys.com and Toys ‘R’ Us bought eToys. We’ll see what kind of horse trading went on when we see the original auction’s transcript next month.
The eToys estate isn’t the only winner today. Faculty Lounge Partners will get a break-up fee of about $150,000 $37,500 plus legal fees. $37,500 is 3% of Faculty Lounge’s bid of $1.25M.
I bet eToys (The Parent Company) creditors will be wondering how the law firm Pachulski Stang Ziehl & Jones LLP blew the initial auction. [Update 2-28-09: It has come to my attention that the law firm may not be on the hook for the results. They were there to collect offers and run the auction, but a separate party was supposed to get buyers. I’ll get more details and update this story.] If Toys.com sold for 4 times what it did in the original auction, were the other domains sold below value? All the law firm had to do was send a press release about the original auction and the results would have been drastically different.
Here’s a time line of the Toys.com saga:
February 5, 2009: Domain Name Wire first reports about the closely held auction for domains from The Parent Company, owner of eToys.
February 6, 2009: Based on tips from multiple sources, DNW suggests that the buyer of eToys.com and related properties is Toys ‘R’ Us, which attended the auction as “Eagle LLC”.
February 6, 2009: Domain Name Wire learns that at least one company that wasn’t at the original auction intends to challenge the Toys.com sale.
February 12, 2009: After receiving court approval, Toys ‘R’ Us announces it was the buyer of eToys.com.
February 18, 2009: DNW learns that Toys.com will be auctioned again and the previous auction winner, Faculty Lounge Partners, will be the stalking horse bidder.
February 26, 2009: All bidders complete asset purchase agreements, Toys ‘R’ Us, National A-1, and Frank Schilling among the bidders.
February 27, 2009: Toys.com sells for staggering $5.1M.
Followed it on twitter as it was happening in real time.. Was an interesting day.
Definitely one for the record books.
Top 10 !
Andrew, Larry wasn’t alone ๐
Shows what happens when end-users duke it out at auction. Most domain auctions aren’t pitched to end-users, more’s the pity…
wow this shows that End users do “get-it”
Fantastic!
My premium domain buytoptoys.com will now sell at least $500k ๐
I bet Mattel, Fisher Price, or even FAO Schwartz might pay more then $5mill. And iam sure they have no clue this name was even for sale.
Or how about all the video game giants with deep pockets?
Did Amazon know about this auction?
I doubt it!
“Did Amazon know about this auction?”
Yes, Amazon.com was at the original auction.
“My premium domain buytoptoys.com will now sell at least $500k”
Yep, here comes an onslaught of forum posts “toys.com sold for 5.1M, buy mycrappytoy.com domain!
I knew toys r us would get the name,
Only real company in the bidding who actually had a genuine use for the name ๐
I bet they just forward the name and benefit from the traffic, but is there $5.1m worth of traffic/business ?
LOL Andrew how true. There is a Grand Canyon of disparity in value between a mega generic dotCom and any one of its longtail 3rd generation cousins.
$5mill is a good deal. They can throw up a simple site and make money within 2 mins.
Anyone know what was Frank Schilling’s top bid. Just curious.
jp; reported as 2.9 million.