Entrepreneurs
Meet Noah Of The Internet
Lisa LaMotta, 07.05.07, 12:15 PM ET

Alex Tabibi’s business card features a dog, a horse, a bird, a ferret and a fish.

Call Tabibi, a former oncologist, the Noah of the Internet. His ark: a burgeoning online catalogue empire called UnRealEstate. Formed in 2002 with his brother Carlo, the company sells a slew of products through a collection of sites with generic yet specific URLs--such as Bird.com and Ferret.com--and splits the revenues with product suppliers.

Tabibi's grand plan: to own a blizzard of niche markets online--first in the pet-supply realm, then later covering everything from fountains to solar panels. "We want to be the market leader in whatever niche we enter," says Tabibi, 38.

Sound crazy? After all, Pets.com and a host of other online retailers tried to do the same thing back in the days of the tech boom--and we all know how that ended.

Tabibi believes this time will be different, even if his business model isn't. Online shopping is more pervasive, as are faster Internet-connection speeds. Snatch up the most-searched Web addresses in the right markets--specifically, those with a younger, Web-savvy customer base and no clear leader serving their needs--and you can't help but make money, he says.

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So far, so good. UnRealEstate pulled in $62 million in sales last year, says Tabibi, and should cross $100 million in 2007. About 10% comes from peddling the company's own branded products, manufactured mostly in China. He won't disclose profit figures but says the business is on course to break even some time next year.

A big key to this strategy is buying those Web addresses. Staked with capital from a family real estate business in Los Angeles, the Tabibi brothers bought their first URL--Dog.com--for $500,000. UnRealEstate now includes Bird.com, Fish.com, Ferret.com, Horse.com, Bike.com, Garden.com, Wind.com and Solar.com, among other names. (Construction-equipment giant Caterpillar wouldn't part with Cat.com.)

Some of the URLs cost just a few thousand dollars; others, such as Fish.com, set Tabibi back about $1 million. Two weeks ago, at a URL auction in Manhattan, he paid $95,000 for Fountain.com--a good fit, he thinks, to go with his Garden.com and Greenhouse.com sites. (The synergies between things like ferrets and fish are less clear; any operating scale comes from sharing information technology functions like data warehousing and search algorithms.)

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How to put a price on all those planks in that ark? "There is a large degree of subjectivity that goes into valuing a domain name," says Christian Kalled, director of brokerage for North America for Sedo.com, a domain brokerage firm. "If you ask 10 different experts they are sure to tell you 10 different things."

While Tabibi admits bidding on URLs is as much art as science, he and other masters of their domains do have a few strategic guidelines. First, and most obvious, he wants names that are easily found by Google, Yahoo! and other online search engines.

Next, he looks for the singular form of a word--like Bike.com instead of Bikes.com. Length is important too: Even though a Web address can be 63 characters long, people don't tend to remember or type in snake-length names.

Another variable is whether the name is a single word or a phrase. Single words are worth more-- Garden.com, for example, will come up in searches for garden, garden tool, garden hose, garden tractors, garden furniture and so forth, making it more valuable than any one of those phrases.

"A simple name change can change conversion rates dramatically," says Tabibi.

Monte Cahn, president of Moniker.com, another domain broker, uses 18 different criteria when appraising a site for a potential buyer, including Google's and Yahoo!'s rankings of the site. A site's suffix matters a lot too. "Dot-com is [still] the Cadillac of the domain space," says Sedo's Kalled.

Yet no matter how refined the valuation methodology, the market for URLs remains far from perfect. And that can mean smooth sailing for the Noah of the Internet.

"We got something for $150,000," says Tabibi, barely suppressing a chuckle. "If they had wanted $5 million, I would have done it in a blink of an eye."