What Is A Market? A Simple Story About Depends.com
What is a market? To some people it is a simple question, not worth their brainpower, as they already get it. Those readers can go ahead and tune out, but for many others it is confusing concept. To many highly educated people the term simply doesn’t resonate. They can’t wrap their arms around it. I have an odd and simple example of a market (albeit a limited and illiquid one).
Years ago (back in 1997 I believe) I bought the domain name depends.com for $100 (among the hundreds of domains I bought across the board on all subjects). While the reaction of many might be that I was violating Kimberly-Clark’s trademark, they would be wrong. Their trademark was ‘depend’ (no ’s’) and I never did anything with my ‘depends’ domain to damage or infringe on their trademark. Bottom line, ‘depends’ is simply a word and a great domain.
That said most people know adult diapers as ‘depends’ (with the ’s’) not as ‘depend’ (Kimberly-Clark’s brand name). Not surprising Kimberly-Clark (symbol: KMB) first came to me in February 1998 to try and buy the domain depends.com. They offered $100 USD to “reimburse” me for the registration fee. I only paid $100 for the domain, so I immediately felt their low-ball offer and reasoning (”reimburse”) was not serious.
In September 1999 they offered $500 USD.
In December 2000 they offered $250 USD.
In March 2001 they offered $2000 USD.
In January 2002 they offered $2000 USD.
In July 2005 they offered $4000 USD.
After 2005 I forgot about the domain and their offers. My market only had one bidder, Kimberly-Clark, and I had no time to actively build up bidders. It just was not on my radar screen, which was perhaps foolish because I have made $100,000 USD over the last 8 years selling a handful of domains. A nice part-time hobby if you will.
This summer though an article about a domain auction house caught my eye. I figured that perhaps they could create a market of more than one bidder. They listed depends.com and 7 people bid on it. Here is the bidding:
Bidder 6 Aug/23/07 12:34 PM EST 15,499 USD
Bidder 7 Aug/23/07 12:29 PM EST 14,999 USD
Bidder 7 Aug/23/07 12:28 PM EST 13,000 USD
Bidder 6 Aug/23/07 07:49 AM EST 10,100 USD
Bidder 5 Aug/20/07 01:13 PM EST 10,000 USD
Bidder 4 Aug/19/07 12:23 AM EST 1,000 USD
Bidder 1 Aug/18/07 02:54 PM EST 750 USD
Bidder 4 Aug/18/07 06:55 AM EST 600 USD
Bidder 1 Aug/17/07 05:02 AM EST 400 USD
Bidder 3 Aug/17/07 02:42 AM EST 350 USD
Bidder 1 Aug/17/07 01:34 AM EST 250 USD
Bidder 2 Aug/16/07 07:55 PM EST 200 USD
Bidder 1 Aug/16/07 03:31 PM EST 80 USD
The final sale price was $15,499 USD (small change in the big scheme of things of course).
The auction was anonymous, but WHOIS is not. Today I found out that Kimberly-Clark was the buyer after all these years. A market is ultimately a buyer and a seller agreeing on a price. That’s it.
Postscript: I would be curious to hear from others about their analysis of the biases and opportunity costs of both Kimberly-Clark and myself regarding this transaction. To me, on a very low scale, low dollar amount, this transaction represents “markets” well.
