Inside the Candy.com Deal

Morning Folks!!


Everyone always wants to know how big deals like this happen. I will start by saying that besides having the right domain names it happens by not wasting your time with every person you get an email from. You’ll be wasting your time answering spams from domainers for the rest of your life. A party that is truly interested will contact you over and over again. They will tell you who they are. They will be professional. And, you can’t piss off someone that really wants what you have and it rolls right off their back. They have a bigger mission than getting pissed off. So once they get pissed off, you know there was nothing there from the get go.


So Greg contacts me for the first time on February 8th of this year. Normally I would blow it off. Especially since it was a Hotmail account. But he signed his FULL NAME, his COMPANY NAME and his contact info. So he gets upgraded and at least gets a reply. I tell him we are in Multi Million Dollar territory and he says they have a budget of $500k-$1M. I tell them that I get an offer for $1 Million every month and my price is $3.5M.


Little by little after a lot of 'No's' we find out what is important to each of us. The circumstance that we each face. By March 18th we have a deal. But it is a long way from a deal to a DEAL. As you can see 2.5 months since the lawyers got it. But to hammer out a REAL agreement that PREVENTS future litigation, takes time and patience. Every item needs to be addressed and a remedy provided if you don’t want to end up in court someday. So the hard work is here. While you agree to the major points, the lawyers are the architects. They have to construct a solid agreement that can hold up under scrutiny and prevent any unforeseen circumstance and address what happens. To me, this is the KEY to any deal that is not just a cash transaction.


Besides the 2% off the top, I also have a provision in case Hershey’s or Mars or whoever wises up and acquires Greg’s company or the domain at some point down the road. There are a lot of moving parts in a deal like this. Lots of give and take. But the more moving parts you have the more flexibility you have in places where one can give some thing up that has little importance to one party while having great value to the other party. If price is the only thing you are negotiating with it is much more difficult. Not as much fun either.


When we finally had the agreement setup we still needed an escrow company that could work with us, knew domains, and was secure. Moniker worked up a custom escrow agreement in concert with our lawyers. They were the lynch pin in all this. But we could not worry about that part until we got everything else nailed down.


So from here, we will see. Should be a fun journey.
Have a GREAT Day!
Rick Schwartz





24 thoughts on “Inside the Candy.com Deal

  1. Gazzip

    Sweet deal, sounds like you got it very well covered in case of all eventualities, even if its bought out by one of the big corps later on – wow
    Could you give us an idea of how much traffic candy.com was getting undeveloped ?, nobody ever seems to want to mention traffic figures on these big ticket sales.
    Thanks for sharing

    Reply
  2. Rob Sequin

    Rick,
    In general, after price, what is most important to you in a deal like this?
    What terms will you refuse to negotiate away?
    Thanks.

    Reply
  3. JBlossom

    Great deal. As owner of shore.com I am encouraged that the market is picking up again. If you have ideas on how best to sell it in this market I am open to them.

    Reply
  4. raj

    Thank you for sharing! It is thoughtful of you; it helps the industry when its leaders take the time to share.

    Reply
  5. Paul DiCecco

    Hello Rick,
    First of all Congradulations!
    I have been apporached by a management firm which represents Steven Tyler of aerosmith since I own StevenTyler.com. I am wondering if you would be so kind as to give me any advice as to how to manipulate a deal without loosing the name to a wipo case.
    Sincerely,
    Paul DiCecco
    PS: I also own about 300 domains some of which are very good and maybe we might be able to do some business.

    Reply
  6. M. Menius

    “A party that is truly interested will contact you over and over again. They will tell you who they are. They will be professional.”
    Ditto that. Rick, it’s time for your book (at least a volume 1). Really. You have accumulated many varied domain deals & experiences that have the makings of a potential best seller.
    Someone will eventually break through into the mainstream. Your story is particularly not one dimensional, but is multi-dimensional. The initial vision. The early investments. The conferences, networking, and foundation laid for future deals. The high dollar sales each with its own unique characteristics and individual story behind it.
    The general public are fascinated with the internet. And domaining, I think, is beginning to shake the old undeserved stigma. The reason I follow you efforts is you have tangible results. Specific stategy at work, and guiding principles that you have followed to maximize your investments. Such as patience, timing, the ability to walk away. And to calculate the potential value to a unique end-user/buyer. Which is obviously a refined skill.
    Many pieces that have come together. To consolidate those experiences and present them in a book format could become something special. A demarcation point on the domain history timeline.
    Domain investing parallels many other investments particularly in regard to analysis of risks, intelligent speculation, seizing opportunity while the window is there.
    Your million dollar deals are hard to come by, and don’t happen by accident. People want to see the inner workings and to grasp the grand design. It fuels dreams. Someone needs to lay this out.

    Reply
  7. Jessica

    I got this:
    1. Be polite in your dealings – whether you have a $10-prospect or a $10,000,000-prospect.
    2. Be professional.
    Thanks, Master Rick.

    Reply
  8. Altaf

    Thanks for sharing the insights of the deal. We know how articulate you are in dealing with”DEALS”.
    We may only Wish you all the best.
    Have a nice time!

    Reply
  9. Danny Pryor

    This is great stuff … and it comes right as I’m working on partnering with an attorney to take our company to the next level.
    Old axiom in business: make sure to have a good CPA and lawyer. ;-)

    Reply
  10. C@T

    Who will get the .CANDY TLD ?
    What happens when CANDY.COM appears in the Alternate .COM servers ?
    What happens when http://CANDY/ is resolved by customer’s CPE DNSMASQ software in many WIFI routers ?

    Reply
  11. UFO

    Re C@T
    If you own a high value .com then its probably a good idea to take out a trademark in a number of classes, such as 9 for computer downloads, I think telecoms services and a few of the IT services in classes 40+ (services) I’m not an IP attorney but I believe that domains such as candy.com trademarked could successfully stop TLD’s bearing the candy etc word in those IT services. A simple test of confusion is the ability to have com.candy against a prior marks candy.com.
    You can’t trademark candy for confectionary but you can for internet and IT services. Could be a worthwhile insurance option to create some barriers…
    But, anyone getting a whole TLD such as candy would need to spend many millions on advertising to even have a hope of trying to get people not to type in whatever they say and stop them putting a .com at the end of it. Like if they advertised go to”www.shop.candy” then people would type shopcandy.com and shop.candy.com.
    So, in reality its better to own the .com URL than waste millions on ineffective marketing. That’s what makes .com so valuable.
    One thing I would say to the new party of the domain, is start getting some highly branded marks, get brands, have the URL and start taking some market share with the potential to take more (or erode their margins) then the bigger fish will come by. Also, make no doubt about it, file trademarks in confectionary classes and they will check you out, the big guys have investment houses doing research for them and they know what’s going through the USPTO (You see them on your IP logs sniffing around).
    Anyway, Candy.com is one of those great and interesting businesses that you are likely to see in management courses… sort of like a ben & jerrys icecream scenario but from a different perspective.

    Reply
  12. Interested

    Did you get the 3.5 million all at once or over 10 years? What if this company eventually filed BK – what would you do?

    Reply
  13. Interested

    Of course, I would never think this company would ever have any problems! They will do quite well I would guess! Just wondering how this deal went down more – getting all your cash at once or not? Other factors, etc.

    Reply
  14. Via

    HI Rick:
    I read of your sale on http://www.OceanfrontDomains.Com and, after I finished laughing from the opening 30 second video, I cried realizing that yet another great domain is now so highly priced that I will never again be able to afford it. Congrats on your sale!

    Reply
  15. John

    Nice sale.
    I too have a .com that I won’t part with but for the right price. Interesting how even the”big” sale houses want to flog diamonds for the price of glass. Anything for the sale I guess. Good luck in your future.

    Reply
  16. Jay

    Great is the word, everyone has been talking here about this sale. But it should be all about you; such an amazing seller.
    Cheers to another million dollar plus baby, and we at AfterMarketJournal.com has another story to talk & report about.. ;)

    Reply

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