Imagine sitting down at a computer in 1998 and clicking into a domain name registration site. There weren’t many of them back then, and this was at least a year before anyone had even heard of GoDaddy.com. You type in “golfballs.com” and up pops the message “this domain name is available”. Bingo. You just struck a million-dollar jackpot.
Why? Because today, even as an undeveloped domain name, you could not possibly buy this name for anything less than mid-6 figures in my estimation. But put an e-commerce site on top of it and you immediately own the gateway to the entire golf ball industry. And what’s that worth? About $1.2 billion per year. And that’s every year, for as long as people continue to play golf.
This is what happened to one visionary Louisiana man, who saw before him something about the potential of the internet, and generic domain names in particular, as a sales platform that none of the major golf ball manufacturers at the time – Titleist, TopFlite, Pinnacle, Maxfli, etc. – seemed to have had any concept of.
When I first started building simple little websites as a hobby in the late 1990s, one of the companies I clearly remember from that time was GolfBalls.com. Like Amazon, they had an affiliate programme so many of the golf websites I used to visit had a GolfBalls.com banner. They sold cheap golf balls, including lake golf balls.
Fast-forward 20 years, and GolfBalls.com is still in business. So let’s ask the question, who is (or are) GolfBalls.com?
The domain name itself was registered in May 1998, but the story begins a few years earlier, in 1995 to be exact, when Tom Cox, a golf club manager at Le Triomphe Golf Club, Lafayette, LA, was looking for ways to promote the club’s membership and wedding reception business. One week he was interviewing a group of hardware and software developers to get a website built for the club, and the same week he met a scuba diving company that was proposing to recover golf balls from the lakes on the golf course. A light bulb lit up in his head and he had the idea of building a small website to sell lake golf balls online. That simple idea, and the perfect, exact-match domain name he was able to register 3 years later, gave rise to a business that started as a hobby, yielding $17,000 in revenues in 1996, before quickly growing to $200,000 in 1998, and $1,000,000 in 1999.
Over the years, due to competition from outside of the US, the business shifted from selling used golf balls to selling new golf balls, clubs, shoes, clothing and so on, becoming more of a mainstream online golf store in the process. They also started selling logo golf balls and by 2008 counted most of the Fortune 50 companies among their 8,000 corporate customers. By then they were generating $10.4 million in revenues and getting 7000 visitors/d to their site. What proportion of that number was direct navigation visitors (i.e. people who just typed the domain name in their browser) is not clear, but by having such a relevant domain name and business, it’s no surprise that they also ranked very high in the search engines (and still do) for ‘golf balls’ and many related search terms.
The fact that none of the major golf ball manufacturers in the mid- to late 90s was sharp enough to see the value of owning the domain name GolfBalls.com is no surprise. The same thing happened in many industries. If one of those companies had had the foresight to register the name when it was available it would have cost them less than $100 – the price of a few boxes of Titleists – to, in effect, ‘own the industry’. But the focus of most companies back then, as now, seemed to be on branding their own names, an expensive, multi-million dollar process that has to be repeated year after year. How ironic then that every time anyone says the phrase ‘golf balls’, whether on the TV golf coverage or in casual conversation, they are reinforcing the ‘brand’ of GolfBalls.com. The domain name is the product is the brand. Natural branding, they call it. Natural visitors, highly targeted and acquired without advertising, arriving at the website every day, and a name that appreciates in value at the same time…
So what would it cost a golf ball manufacturer in 2017 to acquire the domain name GolfBalls.com if it ever came up for sale again? By my reckoning, several weeks of Justin Thomas’s earnings…which is a whole lot more than $100 the last time I checked!
So there you have it; scuba divers, tech geeks and a man with the vision to connect the dots: sometimes one man’s trash really is another man’s treasure.
Sources: BusinessReport.com, JeffersonHennessy.Blogspot.com