Why did 360 spend hundreds of millions of dollars to buy a domain name?

On February 3, there were rumors in the domain name investment circle that 360 had spent a huge amount of money to acquire the domain name 360.com, which caused a lot of speculation. On the next day, that is, on the 4th, 360 confirmed the rumors in the media and indeed acquired 360.com from Davophone, but did not disclose the specific amount. However, the acquisition amount is widely rumored to be 17 million US dollars. If true, then this acquisition price has set a new record for international domain name transaction prices. And I also saw many people discussing in forums where domain name investors gather and in technology media groups, what impact will 360's acquisition of domain names have on the domain name investment market? Why is 360.com so expensive? Why did Zhou Hongyi spend so much money to buy a domain name?

The impact on the domain name market may be concentrated on digital domain names, especially the prices of 3-digit domain names will go up. After 360 acquired so.com earlier, it pushed up the market of 2-letter domain names at that time. After that, when 360 used the double-letter domain name haosou.com, similar double-letter domain names also attracted the attention of investors. So it is certain that this sky-high acquisition of 360.com will also promote the 3-digit domain name market. In the short term, the 3-digit domain name market will see a wave of rising prices.

So, why is a simple letter domain name so expensive?

There is a case that can be used as a reference, which is Ctrip . My former boss, Zeng Rongqun, the president of Yingshidai, once talked to me about how Ctrip acquired xiecheng.com. In 2011, Ctrip finally spent 3 million RMB to buy xiecheng.com from Cai Wensheng. One of the important reasons was that before Ctrip acquired it, the domain name xiecheng.com had 1,800 visits per day. For Ctrip, these lost customers were accurate customers, and the acquisition of the domain name xiecheng.com could retain them. Another point worth noting is that Cai Wensheng began to actively promote this domain name to Ctrip in 2001. At that time, Cai Wensheng's offer was 10,000 yuan. From 10,000 yuan to 3 million, the value of the domain name xiecheng.com has increased 300 times in ten years. The main reason for the appreciation is that Ctrip's brand value is constantly rising, causing the price of the domain name to rise.

Taking Ctrip as a reference, it is not difficult for us to understand the significance of 360.com to 360. On the one hand, according to Alexa data, 360.com has about 2,400 visitors per day. For 360, these are high-value users with very high awareness and demand for 360. It is a pity to lose these precise users in vain. On the other hand, as a large Internet company with a market value of over 10 billion US dollars, 360.com has extremely high brand significance, especially at the moment when 360 is accelerating its international layout, it is more urgent to have an international domain name that is consistent with the brand name. What's more, if 360.com falls into the hands of competitors, 360 will be very passive, and the acquisition of 360.com is also a defensive measure for brand protection.

Therefore, from the perspective of preventing user loss and brand value, the domain name 360.com was destined to become a high-priced domain name since Zhou Hongyi started to develop 360 antivirus software. And if we take 360's recent series of actions and Vodafone 's background into consideration, we will find that 360's choice to spend a huge amount of money to buy back the domain name from Vodafone at this time has a more ambitious strategic intention.

First, focus on search engines and gain pricing power in the search market

Now, if you type 360.com in the browser address bar, you will be redirected to haosou.com, which is the 360 ​​search service page. Previously, 360 launched an independent search engine application "Haosou" to expand the mobile search market. Now, the domain name acquired at a huge cost of hundreds of millions of yuan also redirects to the search page, which seems to send a signal to the outside world: 360 will continue to focus on the search business. Therefore, we can almost be sure that in 2015, 360 will still deepen its search engine business, and once 360 ​​successfully takes 30% of the search market share, the most direct result is that Baidu will lose its pricing power in the search market.

Second, promote mobile phone business and expand traffic entry

In this domain acquisition by 360, one of the most subtle roles is the 360.com domain name holder: Vodafone. This is a world-leading mobile communication network company with a market value of more than 90 billion US dollars and a presence in more than 40 countries and regions including the United States, Japan and Europe. In addition to the domain name transaction, 360 and Vodafone are very likely to have discussed other business cooperation, especially the mobile phone business that 360 focuses on. On the one hand, Vodafone's performance in the Chinese market is not good and it urgently needs to rely on a strong partner to open up the Chinese market. On the other hand, 360 can use Vodafone's many years of accumulated operator experience and rich international channels to enter the overseas mobile phone market. This is a win-win situation.

I believe that with 360's advancement in search and mobile phone businesses, the search engine and smartphone markets may be the most competitive and volatile Internet markets in China in 2015 .

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.