We were hearing the rumblings for a little while, that business.com was up for sale. Now, Santa Monica, CA based business.com has been sold to R.H. Donelly Corp. for $340 million, according to WSJ. Donelly publishes yellow pages and white pages directories, in print and offline. WSJ calls it a huge payday, but we beg to differ!
Business.com is the shopping.com for businesses. It is a B2B focused search engine, which lists several categories of services such as legal and healthcare, as well as business related goods – office furniture etc. Revenue is generated through pay-per-click ads.
Started in 1999, after a highly publicized purchase of the domain name business.com for $7.5 million, the highest ever paid for a domain name, Business.com has raised a total of $75 million in venture funding from the likes of Benchmark Capital.
So what did the founders and investors make for all the money they put in? We know the founders bought the domain name for $7.5 million, and an additional $75 million of venture money went it. We don’t know what the friends and family round was, or the seed money raised, but lets say they raised a total of $85 million. On a $350 million sale, we are talking 4x return over 8 years. Positive ROI to be sure, but at about 20% payback for the investors, not that huge!