June 22, 2011

Social.com Goes for $2.6M to Secret Ukrainian Buyer

Last month, Social.com announced the lucrative domain name was going up for sale after Scott Carter, owner of the URL for more than 15 years, could no longer justify trying to throw business models at it that would stick. Following a false-start auction process two weeks ago, the domain received multiple bids by competing parties vying for the URL, including a bid for exactly $2.5 million on June 6th. The eventual purchase price of $2.6 million was reached on Monday, and just hours ago, Carter received payment. The buyer so far is uncertain, described only as a "Fortune 500 company in the Ukraine", which still leaves us guessing.

Reports of the sale reached DN Journal, a domain name industry site yesterday, saying the purchaser was a company based in the UK (United Kingdom), but Carter said multiple e-mail messages during the process referred to the buyer "as being in the Ukraine", even though not even he knows the identity of the purchaser.

Carter, who says he got the first email from the buyer's broker after they connected via Twitter, reported that message simply stated, "Good to connect. My client who is based in Ukraine is interested to purchase the domain: social.com for $2.5m."

As is common in the odd high-value domain name sales business, other bidders for the name are similarly cloaked in secrecy. Carter acknowledges that he does know their identiites, including multiple US-based Fortune 500 companies, but is unable to reveal them. Final negotiations were only conducted with the eventual buyer after the initial $2.5 million bid, and not against the other parties.

Through the process, until now, Carter has remained silent, waiting for the sale to complete, and become official. His reason for doing so is obvious, sitting on a domain name that eventually sold in the seven figure range.

"I was waiting for the sale to finally close before I said anything," he wrote me this afternoon. "As of about 3 hours ago, the payment finally arrived and the sale is now concluded. What everyone is wondering is who the buyer is? I do not know. Negotiations between the parties involved another broker working for the buyer. Moniker worked directly with the buyer's broker. Moniker has told me that they also do not know who the buyer is."

That a company based in the Ukraine would be interested in the Social.com is another wrinkle in the odd story of this domain name which could be the basis for a new service, a rebranding of one we already know, or just a valuable domain for another player who has some big ideas. The Global 500 Fortune list does not have any Ukrainian companies, and the six Russian companies on the list don't exactly scream out Web tech. So either Carter's contact is not from a Fortune 500 company in the Ukraine, or its a Fortune 500 company based elsewhere with a contact in the Ukraine... or something. Eventually, no doubt, we'll find out.