$6M Offer for Cricket.com: Rejected
Communicate.com rejects $6M for premium domain name.
Domain name firm Communicate.com (OTCBB: CMNN.ob) rejected a $6M offer for the domain name Cricket.com, as stated by an article in Kiplinger magazine.
The article by columnist Andrew Feinberg picks Communicate.com as a “smart speculation” but also uncovers more details regarding the growing firm. The article is likely the reason Communicate.com’s stock price soared 38% the prior week to close at $2.70 per share. With microcap stocks, a little bit of buying activity can move stocks quickly.
As stated by the article:
-Communicate.com is planning a name change (smart move, it doesn’t make sense for what the firm has become)
-The firm owns 1,100 domain names
-The firm turned down $6M for Cricket.com since it wants to develop the domain. ESPN paid $35M for CricInfo.com, a leading cricket site.
-Feinberg argues the firm is probably worth 50% more than the previous $1.97 trading price since of the value of its domains, the $7M it has in cash, and that its leading site Perfume.com did $10M in revenue last year. Of course, much of that 50% has been realized over the past week.
-Feinberg points to the strong management team as a key indicator of future success
-The firm plans to raise $15M to $40M in a stock offering in the first half of 2008
Cricket.com used to be a parked page with ads for mobile phones and a disclaimer that it wasn’t affiliated with Cricket Wireless. Cricket Wireless is a popular low-cost wireless service from Leap Wireless (NASDAQ: LEAP). I wouldn’t be surprised if Cricket Wireless made the $6M offer for the domain. The firm’s domain name is MyCricket.com. No joke.
The parked page put the firm in sketchy legal territory, so it is good to see that it now has a “coming soon” page at the domain.
In May of 2007 I predicted that Cricket.com could sell for over $1M. Look for pay-per-click revenue to decline as Cricket.com was the firm’s top grossing parked domain name. But it’s all part of the firm’s strategy: parking is just a way to generate revenue while developing domains into destinations.
[Please see disclosures.]