Online marketing technology company pays seven figures to get better domain name.
SumoMe has purchased the domain name Sumo.com for $1.5 million and will rebrand to the name Sumo.
The domain name last changed hands for $150,000 in 2008.
The deal includes a large upfront cash payment of $500,000 plus equal monthly payments over 5 years. Escrow.com is handling the escrow.
I caught up with the Austin, Texas-based online marketing technology company this week to learn more about its domain name acquisition.
DNW: SumoMe has been around for a while, so how long have you been interested in the Sumo.com domain name?
Sumo: We started to pursue the name in April 2010 to improve brand value, recruiting, and to be the de facto Sumo brand. Our co-founder and CEO, Noah Kagan, was one of the first employees at Facebook (went through TheFacebook > Facebook.com transition) and Mint (went through MyMint.com > Mint.com transition), so he is no stranger to the value of a strong .Com.
It has taken nearly 7 years to acquire it. Initially, the owners were unresponsive so we found an intro through a mutual contact on LinkedIn. Conversations were ongoing, but the owners would stop responding for months on end. We even hired 3 brokers to help push this through, but none were able to get the owners to budge.
We purchased sumo.ly and sumos.com, but didn’t want to settle for second best and Noah kept persisting. Ultimately, he offered them $1.5MM and a strict deadline to motivate them to close.
DNW: Are you changing the domain from SumoMe.com to Sumo.com or just using it as a forward?
Sumo: We are changing the domain to Sumo.com and rebranding from SumoMe to Sumo, which includes an updated logo and updating most mentions of SumoMe on our site and external mediums. We will be redirecting SumoMe.com to Sumo.com.
DNW: Has there been customer confusion because you didn’t own Sumo.com?
Sumo: This was a strong motivator for us. Several sites popped up after us in the SaaS space that utilized “sumo” in their name. We were the original and now we are positioned as the original.
DNW: How did you justified the cost?
Sumo: In the long term it improves our brand value and positions us as the original Sumo brand.
Great acquisition! Will pay out for the buyer and also a nice return for the seller if he bought it for $150k.
Now, they are not going to say they threatened the former owner. But, I am sure they thought about it. Or, maybe they did. Especially, since the former owner used sedo ppc.. (dumb idea for a valuable domain.)
10 times return over 10 yrs is very impressive. If he had bought apple shares in 2008, he would have had a 6 times return.
$ 150k in 2008 was a risk considering the world economy was falling apart at the time.
Am I remembering right as these guys starting out as appSumo ? There’s some good reading about Kagan with his Facebook stories out there too : http://www.businessinsider.com/how-noah-kagan-got-fired-from-facebook-and-lost-185-million-2014-8
I’ll bet that along the way that they were offering far less than this end price . . . at least 10-20% less 😉 I’d bet. Great sale and thanks for the follow up story Andrew.
Oh and sorry about your luck Nat Cohen 🙁
Andrew Allemann says
I’m sure Nat took the $150k, invested it in more domains, and made plenty of money.