The co-founder of Fibit disclosed in a recent interview that he bought the <fitbit.com> domain name for only $2,000 — a surprisingly low price for a company that recently announced it was being acquired by Google in a deal valuing the company at about $2.1 billion.
Given that short dot-com domain names often sell on the aftermarket for tens of thousands of dollars or more, the Fibit acquisition seems like quite a deal. Indeed, as of this writing, the most expensive reported year-to-date sale of a two-word domain name is <bettingtips.com>, which sold for $150,000. And that domain name is 11 characters long, as opposed to the 6-character (and therefore presumably more valuable) <fitbit.com> domain name.
In an interview with Guy Raz on NPR’s “How I Built This” podcast, Fitbit co-founder James Park talked about the domain name acquisition as a quick deal that avoided many of the issues that arise in a typical prolonged negotiation. He said it was part of the company’s overall and interesting decision to select the “Fitbit” name in general.
Here’s how Park describes how Fitbit picked its name and acquired the domain name:
It's never easy to name a company and it's even more challenging just because of domain names, right? That's something that's typically a lot of the limiting factor in naming a great company. So we would spend hours and hours and days just going through different permutations of names — some awful ones as well.
At some point we got on to a fruit theme, so we were thinking like “Fitberry” or “Berryfit” or “Fitcado” or you know just some just some really awful names. The “Fitcado” — history might have turned out a lot differently, for sure. So I was just taking a nap in my office one afternoon — I think I was actually napping on the rug because I was so tired — and I woke up and it just hit me it was “Fitbit.”
And the next challenge was actually the domain name. The domain name was not available and it was owned by this guy in Russia. You know like, oh my god, how are we going to get this domain name? We'll just email the guy and see what happens, and he said, “Well how much are you willing to offer?” I said, “Oh god, I don't know, how about like a thousand bucks?” He's like, “Ooh, how about 10,000?” And I said, “Oh, I don't know, that sounds like a lot. How about 2,000?” And he's like, “Oh, OK, 2,000 — deal!”
I think it was literally like two or three emails that we sent back and forth in this negotiation.
Park said the domain name acquisition came to provide “definitely a good return” (obviously!) on the tiny $2,000 investment.
While it certainly seems like Fitbit got quite a steal on its domain name, I am never surprised by the aftermarket sales prices — low or high — of domain names. As I repeatedly advise clients when helping them buy or sell domain names (when filing a dispute, such as under the UDRP, is not an option), appraising a domain name, unlike real estate or other assets, is at best a challenging endeavor.
Many factors often determine the ultimate value of a domain name, including the owner profile, site content and usage, length of ownership, comparable sales, traffic, and more. But, ultimately, luck and timing may be the most important factors in any domain name sale.
