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November 13, 2014

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Here's the The Lowdown from DN Journal,
updated daily
to fill you in on the latest buzz going around the domain name industry. 

The Lowdown is compiled by DN Journal Editor & Publisher Ron Jackson.

Why Bill McClure Agreed to Pay $100,000 for Coffee.Club 

A strange thing happened Saturday night (Nov. 1) in the middle of a T.R.A.F.F.I.C. conference Dessert Party on the show's final night at the Fontainebleau Hotel in Miami Beach. While chatting with some friends there was a commotion on the stage of the ballroom where the party was underway. I looked around to see an old friend, Coffee.org owner Bill McClure, and three top executives from the .CLUB registry yelling excitedly about something. It was an impromptu celebration with no live microphones on the stage so it took a few moments to get a handle on what was going on. After piecing together shouts of "Coffee.club $100,000!", "biggest .CLUB deal to date," etc. I went over to find out if what I was hearing was true (after all it was November 1st not April 1st).

I climbed up the stairs to join the group on stage where McClure and .CLUB executives Colin Campbell, Jeff Sass and Michele Van Tilborg confirmed they had completed a deal to send the domain Coffee.club to McClure for $100,000, to be paid out over 10 years at $10,000 per year.

 

Bill McClure speaking during the Meeting of the Chiefs session that closed the final business day at T.R.A.F.F.I.C. East 2014 Saturday (Nov. 1) in Miami Beach.

Cheers! (with coffee of course): We took this shot immediately after .CLUB officials and buyer Bill McClure announced a $100,000 deal for McClure to acquire Coffee.club Saturday night in Miami Beach. Left to right are .CLUB CEO Colin Campbell, McClure, .CLUB CMO Jeff Sass and .CLUB VP, Business Development Michele Van Tilborg.

While the deal was just finalized and announced Saturday night, the two sides had been talking about it for some time. The free financing arrangement was something .CLUB already had in place with their Startup.club offering that is designed to make it easier for entrepreneurs to acquire and build a business on a premium .CLUB domain. Still, paying $100,000 for a new gTLD domain over any length of time is a major commitment accompanied by a high degree of risk. 

On Sunday morning, Bill McClure (right) told 
DNJournal's Ron Jackson he had no buyer's remorse. 

To make sure he didn't have any buyer's remorse, I waited until the next morning, at T.R.A.F.F.I.C.'s Farewell Breakfast Sunday, to get back together with McClure to see if he was still as excited about the deal as he was Saturday night. He was, and after talking with him, I began to understand why he believes he actually cut a pretty good deal for himself. 

In almost all cases, when you buy a domain name, you are on your own to make something out of it. Odds are you won't hear another peep out of a registry or registrar unless you miss a payment or your domain is up for renewal. That will not be the case here. As it happens, McClure is just 

the kind of guy .CLUB needs. He is an end user with a very successful existing coffee business whose new venture will put the .CLUB extension in front of a lot of people. As such, McClure said .CLUB has agreed to spotlight Coffee.club in many of their marketing efforts. Since they are one of the few new gTLD registry operators who have actually spent significant money on marketing (in fact on Saturday they won the T.R.A.F.F.I.C. Award for Best Marketing by a New gTLD, as well as the Most Promising New gTLD award) that is a big value add to McClure, 

There is little doubt that despite making a big sale. .CLUB has as much on the line here as McClure does. McClure and many others at the party, including T.R.A.F.F.I.C. Co-Founder Rick Schwartz, noted that Coffee.club will be something of a "canary in the coal mine" for

.CLUB.  The name is a perfect fit for the coffee club McClure intends to build on it and it will be backed by a guy who already knows his way around the coffee business as well as anyone in the country. So the thought many expressed out loud was that if Coffee.club can't make a new gTLD successful then nobody can. For that reason, every new gTLD operator, not just .CLUB, should be rooting for McClure to succeed.

McClure, who told me he had been thinking about setting up a coffee club for some time, doesn't plan to waste any time in putting his plans for the domain into action. He told me he will have a live site up on Coffee.club within a couple of weeks. He has done that before - a prime example coming just a year ago when McClure bought Bouquet.com at the 2013 T.R.A.F.F.I.C. Las Vegas conference and quickly had a profitable business up and running on it. Of course, that was a .com. Can he do it again with a new gTLD? And what about possibly losing traffic to CoffeeClub.com? The latter domain, registered in 2000, is currently an inactive blog (the most recent posts are dated 2013) that has ownership information shielded by WhoIs privacy. Right now there are just as many questions as answers - so it will be very telling to watch this particular case play out in the months ahead.  

(Posted Nov. 5, 2014)


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