Mark Zuckerberg’s Biggest Regret: Not Buying the Domain Name
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Mark Zuckerberg’s Biggest Regret: Not Buying the Domain Name


If you could go back in time, what would you
change? Perhaps you would go back and invest a ton
of money in Google stock back when it only cost 100 bucks per share. Or, maybe you would go back and switch the
numbers on your lottery ticket. What about Facebook founder, Mark Zuckerberg
– what would he change? What can we learn from the CEO of one of the
most valuable companies of all times? Zuckerberg’s answer about altering the past
may surprise you. In light of the recent Cambridge Analytica
scandal, going back in time to change key aspects of Facebook is a hot topic. There have been many heated discussions about
how Mark Zuckerberg might have done things differently if he could start all over again. Yet privacy concerns is not the only major
area of remorse that Zuckerberg feels with regard to Facebook. When asked what he would do differently during
an interview with Y Combinator’s Jessica Livingston at Startup School in 2009, Mark
Zuckerberg was quick to mention he would “get the right domain name.” Zuckerberg: When we did our investment with
Peter, we didn’t even have the domain Facebook.com yet. I mean, that was back when we were TheFacebook.com. I don’t know if any of you remember that. Yeah, that was a winner. Livingston: So back to other mistakes you
made, tell me some more stories about things if you could do them differently now, you’d
do them differently. Zuckerberg: I’d get the right domain name. Livingston: That’s important, that’s important
advice. Zuckerberg: But I think the iterative advice
is even more important because the moral of that story is that we were able to get the
right domain. We just had to work on the service and build
it out, and we ended up paying some large amount of money like tens of thousands of
dollars to get Facebook.com instead of the $35 or $8 whatever the rental fee for a domain
name was back then. I’m pretty sure we used Register.com, which
is a mistake too. But a lot of these mistakes you can overcome
later on if you’re building something that’s actually valuable. It’s a mistake Zuckerberg has repeatedly
mentioned and one that entrepreneurs and startup founders should learn from. If you watched the movie The Social Network
or are a Facebook buff, you may already know that the original name of Facebook was, in
fact, The Facebook. Back when Zuckerberg was studying at Harvard,
a “face book” was a student directory featuring photographs and details of every
student enrolled at a college. So when Zuckerberg created an online, unifying
directory of student profiles in January 2004, it made sense to call it The Facebook. To get the company online, Zuckerberg bought
a domain name to share his creation with the rest of his school and ultimately the rest
of the world. On February 4, 2004, Mark Zuckerberg launched
The Facebook located at TheFacebook.com. Although Mark Zuckerberg had considered calling
the company just Facebook right from the start, the owner of the domain name Facebook.com
at the time, About Face, Corp., understood the value of a premium domain name and wanted
a premium price to consider selling it. Rather than going through the hassle of purchasing
the domain they wanted and derailing the launch date by spending time on negotiations, Facebook
ended up launching on TheFacebook.com for $35 (or thereabouts), which was the standard
cost to register a domain name then. Fast forward a year, and the company was resonating
with users, growing month over month. By December 2005, Facebook already had an
incredible 6 million monthly users. It was in 2005 that the company decided to
make a major pivot in their branding. After a suggestion from Napster founder Sean
Parker, Zuckerberg was ready to ditch the ‘The’ from the name and instead become
just ‘Facebook.’ This name was simpler, more memorable and
sleeker. But Facebook came across a big roadblock:
it didn’t own the domain name Facebook.com and by this point, Facebook had already become
a big hit. Remember the episode of The Office (US) where
Dwight sells the last “Princess Unicorn” doll of the holiday season to Darryl? Toby HAD to have the doll for his daughter. He had $200 to buy it from Dwight – already
significantly marked up from standard retail pricing – but Darryl just moments before
had purchased the very last doll from Dwight. He in turn wanted $400 from Toby because by
selling it he wasn’t going to be able to give it to his daughter for Christmas (and he knew
Toby couldn’t get it anywhere else). Supply and demand. Without a doubt, Toby regretted not knowing
the trend and understanding the value of the doll earlier so he could have saved hundreds
of dollars. Similarly, Zuckerberg says he regrets not
knowing the trend, not seeing the long game, not going with Facebook.com from the start,
and instead building a company on TheFacebook.com domain name. By the time Zuckerberg had the cash to buy
the domain name Facebook.com outright, the online social network was already hugely popular
and therefore, the domain name that Zuckerberg wanted was very expensive because…supply
and demand. The then-owner of the domain name knew that
Facebook was popular and eager to get the domain – and that they couldn’t get it
anywhere else – and could therefore ask for a more ambitious sales price. Facebook ended up paying much more for the
right name than they could have bought it for before they were mega-popular. As for price, sources show that Facebook purchased
the domain Facebook.com for $200,000 from About Face on August 23, 2005. In 2010, Facebook paid an even larger sum
for the domain name FB.com. It was purchased for a whopping $8.5 million
from the American Farm Bureau Federation for use in Facebook messaging. This new, short domain name allows Facebook
to assign a personalized Facebook.com email address for every user. Prior to the purchase, Facebook’s employees
were already using the Facebook.com domain for their emails, so the company had to switch
to another domain, which is why FB.com was acquired. The purchase of FB.com by Zuckerberg and his
team shows that shorter domain names in the same genre are always going to be more valuable
than longer ones: fb.com>facebook.com>thefacebook.com. According to Crunchbase, Facebook didn’t
have the funds to buy a $200,000 domain name back in 2004 since, as of September 1 of the
same year, Facebook had only raised a $500,000 investment from PayPal co-founder Peter Thiel. Although the domain was likely not priced
as high as $200,000 at Facebook’s founding in 2004, Zuckerberg instead went for the cheaper
option at the time. Whether you pay now or pay later, a lesson
for all entrepreneurs is that at some point, you will have to pay for a quality brand. Facebook decided to pay later and paid a lot
more as a result. Thanks to the company’s success, the $200,000
domain name price tag was not too huge a cost, relatively speaking. By the end of 2005, Facebook had secured a
$12.7 million investment from venture capitalists Accel and the company continued their meteoric
rise. Prior to going public on May 18, 2012, Facebook
had raised a truly impressive total of $2.3 billion in private investment rounds. But Zuckerberg has always regretted starting
the company on TheFacebook.com and wishes he had bought the right domain from the start. Facebook.com isn’t the only example of a
domain name increasing in price as a company becomes more successful. Twitter is a great example. Back at the beginning of 2006, Twitter’s
original domain name was Twttr.com, primarily because the domain Twitter.com had already
been registered by another company in 2000. Six months later Twitter’s founders looked
to rectify their mistake and bought the domain name Twitter.com for the price of $7,500. This is a lot when you consider domain names
can be registered for as low for 99¢, but a steal when you consider that premium domain
names sell for $50,000 to millions of dollars today. Ride-hailing company Uber is another interesting
case. Travis Kalanick, the company’s co-founder,
originally named the company UberCab but later changed the name to just Uber, after backlash
from San Francisco’s Municipal Transport Agency over the inclusion of the word “cab.” Kalanick bought the Uber.com domain name in
2010 from Universal Music Group for what was then two percent of the company. However, Uber later decided to buy back those
shares for $1 million, a real bargain considering Uber is worth $72 billion at the time of publication. Wanting to go back in time and change things
won’t help. But learning from mistakes does. If you’re an entrepreneur or building a
startup, learn from Mark Zuckerberg’s regret. When founding your company make sure to think
about buying the best domain name that you can from the start, because the price of a
domain name will only go up if your company becomes successful.

5 Comments

  • Paul Mc

    Great post Michael. Just shared it on LI – this is something that all start-ups and businesses planning to set up new entities really need to pay strategic attention to.

  • MultiECommerce

    Thank you, Michael, for your great video, valuable information that I will use to convince my future domain names prospect buyers.

  • Darrion Lee

    It's legal to buy local business domains if they haven't already bought them? I live in a non innovative area and I see a lot of the business near me haven't bought their exact business domains ….please help!!!

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