Someone educated me on this type of thing a while back. Chat.com - and other highly reusable URLs - is a non-deteriorating asset that has a value on OpenAI's ledger somewhere. It's not like they bought $10,000,000 worth of catering or fuel or labor even buildings. Because someday, the owning entity can sell it for about what they spent on it. And I imagine there is some kind of financial instrument to take out a loan with the domain as collateral. My point is, it's not really like they "spent" the money as much as they just parked it in a domain name.
GP said highly reusable URLs. Roughly by definition, it's enduringly desirable. It is valuable in a way that say, Kmart dot com is not, since it has an open-ended set of uses. I chose the Kmart example because that domain is associated with a specific brand that's universally known to be irrelevant, which caps its value to whatever cash one could make "redirect to affiliate links" generate with random legacy traffic it gets. You wouldn't use it for a dating site, or even for a grocery delivery startup.
A 'temporarily reusable' tier might be something like "DVD dot com" or "rtx dot com" or something -- presumably there's a lot less money in DVD than there was 20 years ago, and presumably raytracing won't be an exciting high-end thing people are excited about 20 years from now. They're valuable and quite reusable at one point, but could become low-value by the time the company decides to unload them.
I'd say any single syllable common english word .com url has a high intrinsic value that will not go down unless english stops being the de facto lingua franca of the internet.
That will throw a nuclear bomb on the whole .com. Things are already not that good with the US being able to seize .com. I don't think ICANN pulling something off will make it better.
In Q3 2024 Google spent $7.2B on "Sales & Marketing Expenses". The data is not broken down more granularly. If 50% of that is pure "Marketing Expense" then you'll see that the scale of the market these players are competing for is worth $3.5B PER QUARTER in operating expenses to attract customers.
Based. I hope they plaster this on billboards everywhere. Bring back the dotcom. I'm tired of seeing people advertise names and then hearing them whine that someone else advertises for the name on Google or that people search the app store and find some kind of wrapper.
Yes, but not for the same reason. IMHO the stupid part would be because they can't get a trademark on a completely generic term, so 1000 competitors and knockoffs would be diluting their brand equity and SEO.
New Coke was actually a terrific marketing decision. Before New Coke, Pepsi was about to take over. New Coke made people realize how much they loved the old coke.
A 'temporarily reusable' tier might be something like "DVD dot com" or "rtx dot com" or something -- presumably there's a lot less money in DVD than there was 20 years ago, and presumably raytracing won't be an exciting high-end thing people are excited about 20 years from now. They're valuable and quite reusable at one point, but could become low-value by the time the company decides to unload them.
Not that huge.
Though you are correct it is a durable asset. (As are buildings.)
They spent more than $15.5 million, according to the article
15M is like one month of salaries for 500 engineers, so like 40% of their whole eng. team
https://www.sec.gov/Archives/edgar/data/1652044/000165204424...
If you add a $15M one time capital expense to this then it doesn't even appear as a rounding error on this cash flow statement.
Acquiring a long term asset acting as a pillar of your marketing strategy then it begins to look like a very good deal.
But how do we measure it? How can we tell that it was successful / good idea or not?
Even things like what is the difference between "chat.com" and "chat.ai"?
Would "chat.ai" for 1M be more efficient than "chat.com" for 15M?