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#Domain money : Did 56.com really sell for $7.2 million ?

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Chinese company Sohu paid an alleged $25 million dollar price tag for 56.com, a web site for visitors to share videos – much like a Chinese version of YouTube.

Out of these $25 million, how much was the valuation of the two digit numeric domain name?

While some would like to see all of the amount spent on the acquisition of the business count towards the domain’s valuation, that number is considerably lower.

According to George Kirikos who shared the information on Twitter, the domain’s valuation was listed at $7.2 million dollars.

How did Kirikos come up with that valuation for the sale of the domain 56.com?

According to documents from the Securities and Exchange Commission, Sohu reported the following:

Impairment Losses – In 2019, Sohu recognized a $7.2 million impairment loss for a domain name related to the 56.com Website, mainly due to enhanced restrictions that Chinese regulatory authorities imposed on the broadcasting industry, which had an adverse effect on the operation of the 56.com Website.

According to George Kirikos, this is a clear indication that to sustain an “impairment” the original payment for the domain would have to be more than $7.2 million dollars.

Not a bad price for the company’s founders, that most likely paid 5 to 6 figures USD for the domain 56.com.

Kirikos expanded on this information in a post at NamePros.


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Comments

2 Responses to “#Domain money : Did 56.com really sell for $7.2 million ?”
  1. As I posted in more detail later (see for example at: https://www.namepros.com/threads/56-com-written-down-by-usd-7-2-million-implying-it-cost-at-least-that-amount.1187624/ ), it wasn’t a pure domain name transaction (they paid a rumoured $25 million for the 56.com domain and website combined several years ago). But, one can infer that Sohu did value the domain component highly, given that they’ve written it down by so much. It had to have been on their books for at least that much previously, to take such a write down.

  2. BullS says:

    Do you really believe anything coming out from China is true?

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