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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.

Multi-Million Dollar Marijuana.com Sale Made Possible By Escrow.com's Domain Name Holding Services

You probably heard about the sale of Marijuana.com (including both the domain name and the popular forum built on it) last November in a deal reportedly worth $4.2 million. That 

would be a lot of cash for anyone to lay out at one time, including the profitable company that bought Marijuana.com, WeedMaps Media, Inc. (a firm that serves  the medical cannabis community). We've learned that, thanks to a service provided by Escrow.com that a lot of people are unaware of, WeedMaps was able to acquire the site without laying out that massive bundle of cash all at once. 

WeedMaps used Escrow.com's Domain Name Holding Services (available for transactions valued at $75,000 or more) that allows buyers to stretch out payments over a

period ranging from a few months to five years (the exact time frame is determined in negotiations between the buyer and seller). During the payoff period, Escrow.com holds the domain but the buyer has full use of the asset while completing the payment schedule that, once done, results in the domain being transferred to the new owner.

Just as mortgages make it possible for people to buy houses that they could not buy if the full price had to be paid up front, Escrow.com's Domain Name Holding Services is making it  

much easier to complete sales agreements for high end domain names. Justin Hartfield, the Chief Web Officer of WeedMaps, told me flat out, "We would not have done the deal if these services didn't exist. Since the purchase price was so big, we were able to work directly with Escrow.com which helped with making sure both parties were on the same page in terms of contracts."

Well-known domain broker Andrew Rosener of MediaOptions.com said he has also used the service to make a lot of high end deals happen. "Since Escrow.com launched their Domain Holding Services, MediaOptions.com has completed many deals which otherwise would not have happened," Rosener said. "I've done transactions using the holding service ranging from $7,500 which will be paid over 24 months to one transaction for over $3 million which will be paid over a period of only two months. In both cases, the domain holding service gave us the financial flexibility that the buyer needed in order to complete a deal.  It removes all the risk from structured payment deals and Escrow.com has been able to tailor their service to fit my client's needs and follow the terms of my contract."

Of course a buyer still has to believe a domain is worth the money they are paying for it, even if they have the luxury of paying for it over time.

Andrew Rosener

Hartfield has no doubt that the payments his company is making for Marijuana.com will provide an attractive return on its investment. "Through acquisitions like Marijuana.com and our own in-house initiatives like GrowShops.com, WeedMaps Media has evolved into a full-fledged advertising platform with the capability to deliver enough targeted traffic to attract national and even international brands to advertise on our network of sites," Hartfield said. 

It's another testament to the value of category defining domain names, unique assets that Escrow.com's holding services have put within the reach of more buyers. That, of course, is good news for sellers too.

(Posted Jan. 12, 2012) 

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