Bidding for e.co underway.
The charity auction of e.co, sponsored by .Co Internet and Sedo, has started and runs through June 10.
A lot of people have been comparing this auction to that of e.Biz, but I don’t think the comparison makes sense. e.Biz sold for so much because it’s a very common term — eBiz. Just look at the buyer, which owns Ecommerce.com, to understand the value.
So what is the value of e.co? I think most of the value lies in the “eco” or “green” branding of the name. It would make for a great URL shortener for green companies. It would also be a good domain for a portal site about going green. Better yet, a large company might snap up the domain to show off its eco awareness.
Two things that could make this a great auction: it’s getting a ton of press and the winning bidder gets to select a charity (sans religious and political charities) to receive the proceeds (although it won’t be tax deductible).
In order to bid in the auction you need to fill out a pre-qualification form and contract and make a $1,000 deposit.
Jan says
e.co is nice but I wonder what sex.co would be worth…
Joe says
I think you’re right on in terms of potential buyers and uses for e.co. But I’m not sure why you say it wouldn’t be tax deductible. I’ve done some research on this and have come to the conclusion that as long as the charity is a valid 501(c)(3) organization, the donation should be deductible to the extent of the proceeds actually reaching the charity. There are some documentation requirements, but I don’t see any reason it would not be tax deductible…
Andrew Allemann says
@ Joe – you’re receiving something in return, and presumably you’re not “overpaying” for it in the auction. You can only deduct the part of a charitable donation that exceeds the value of what you receive in return.
Of course, I’m only speaking about the U.S. here.
Andrew Allemann says
Joe – I just found examples from the IRS in publication 526:
“At a fundraising auction conducted by a charity, you pay $600 for a week’s stay at a beach house. The amount you pay is no more than the fair rental value. You have not made a deductible charitable donation.”
Joe says
Andrew:
You are 100% regarding your assessment on receiving something in return…This was my initial concern when I first started considering this auction. See IRC s. 170(f)(8). The key to this is valuing what you receive in return – in this case e.co. As I considered my participation, I rationalized that there is currently no premium market for these domains because they don’t yet exist. So I would value what I am receiving as price of registration: either the current value of registering one domain: $30 @ Go Daddy for standard pre-reg or $300 for Landrush reg. At least that’s my position and I got my tax accountant to sign off on it as well. 🙂
Andrew Allemann says
@ Joe – I understand what you’re saying. Hopefully you tax accountant will back you up if the IRS comes calling 🙂
Good luck in the auction.