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Yahoo Domain Sale was Win-Win

Yahoo’s sale of Contests.com was a win for everyone involved.

When Yahoo (NASDAQ: YHOO) sold the domain name Contests.com on Tuesday, the mood was upbeat. It was a relatively big domain sale from a big company for a lot more money than the seller anticipated.

I was surprised to see some people questioning the sale. Larry Fischer made some fair points. TechCrunch went a little overboard, suggesting this was more than just a simple decision to sell an unused domain. (People who read the TC article took it a step further. Two commentors thought it was some sort of inside deal as a favor to the buyer. Gotta love conspiracy theorists.)

Here’s my take: it was a good domain sale. The seller got more than they required and the buyer probably would have paid more.

Yahoo set a reserve of $150,000 and was willing to take that much. The buyer was determined and probably would have gone higher had an internet bidder not pulled out at $360,000. But is $380,000 that bad for this domain?

It’s true that the domain was inserted into the auction relatively late. That may have to do with internal reviews at Yahoo. But the level of promotion inside the domain industry was better than for just about any domain sold at a live domain auction: a solo email blast to qualified buyers. Buyers knew about it and there were many qualified bidders at the auction who decided not to participate. It was very different from Toys.com, in which only a handful of bidders were aware and kept the secret to themselves.

This sale can only be good for the industry. So I’m just going to treat it as what it was: a good sale in which both the buyer and seller are happy.