Uber important to own the right domain name
Getting the right domain for your trademark can be a major development. If you’re a little unsure about how much a domain is really worth, it’s always a good idea to get help from the experts. As this true story shows, it’s not just small companies that encounter pitfalls in the domain world.
Most of us associate the name Uber with the company that sells taxi services all over the world. But long before Uber became a globe-conquering brand, the domain uber.com belonged to a social network that – despite large investments – went to the grave in 2008.
One of the biggest investors was no less than Universal Music, and when the social network collapsed, it was the music giant that held on to the domain name uber.com.
We jump to 2010 now, when entrepreneurs Travis Kalanick and Gareth Camp launched their smartphone app Uber, the internet based service for taxi-rides and carpooling. Obviously they wanted to claim the coveted name uber.com, but because it was already taken they instead had to settle for ubercab.com.
It wasn’t perfect, but both entrepreneurs felt that they had found a strong, stable domain.
It didn’t take long, however, before UberCab ended up in a legal dispute with public transport authorities and local taxi companies in its home town of San Francisco. Because they were not licensed as a taxi company, using the word “cab” in their name was judged to be deceptive.
Uber Technologies Inc. then offered Universal Music 2% of the company in exchange for the domain name uber.com. The deal was snapped up by Universal Music. Done deal!
When Uber sought a new round of investment in 2014, the company was valued at an extraordinary $17 billion. Unfortunately, Universal Music were not able to rake in any of this money because they had, one year earlier, sold back their 2% holding to Uber – for $1 million.
The thing that’s easy to forget is that $1 million for a four-letter .com domain is a reasonable price in today’s market, especially one that could be used in many different languages and has obvious branding potential.
Of course it’s always easy to be wise after the event, but if Universal Music had been a little more aware of the domain industry then they would have understood that its value was considerably more than $1 million.
Uber has had an unstable start to life on the American stock exchange, but even so they are valued at $82 billion at the time of writing.
It makes you wonder if anyone at Universal Music ever sits down with their pocket calculator and works out what that 2% shareholding would be worth now. We can help them with that…it’s $1,640,000,000.