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March 27, 2008
B.C. firm shifts from domain-name game

Seattle Times technology columnist

Excerpts from the blog

Communicate.com of Vancouver, B.C., is undergoing an extreme makeover with the Wednesday acquisition of tiny San Francisco startup Auctomatic for $5 million $2 million cash plus $3 million in Communicate stock.

The deal marks a turning point for Communicate, which is shifting its focus from wheeling in domain names to building commerce sites and widgets, using Auctomatic technology. Auctomatic started out developing tools for eBay power sellers.

That's not all. Communicate also announced Wednesday that it's changing its name to Live Current Media.

Silicon Valley pundits were all over the news release Wednesday morning. I wonder if it's because they're enthused about Communicate or Auctomatic, or because the deal looks like a win for ber-hip startup financier Y Combinator, which funded Auctomatic.

Communicate/Live Current has 15 employees, including a few in Seattle. Auctomatic's five employees are going to work at the headquarters in Vancouver.

Communicate/Live Current's over-the-counter stock closed up 5.95 percent to $2.85.

There's more to come, according to Communicate/Live Current Media President Jonathan Ehrlich, who briefed me on the deal Wednesday.

Ehrlich said the company is planning to buy more startups over the next year or two to build an e-commerce business on its choice portfolio of Web domains.

"We have big appetites and are aggressively trying to scale this business," he said. "I think acquisitions of one sort or another are probably in the cards over the next 12 to 24 months. We want to grow this business as aggressively as we can."

It's probably a great time to be shopping for Web 2.0 startups, but how much can a 20-person outfit buy?

The company has about $5 million in cash, Ehrlich said, but it's reviewing options to increase its buying power. That includes selling a few domains, moving the company onto a larger stock market with a new public offering and taking an infusion from private investors.

Over the next six weeks, "We'll be making some decisions about how to put more gas in the tank," Ehrlich said.

My guess is it will turn to investors. Activist investors pushed the company last year to bring in new management and figure out better ways to monetize its portfolio of about 800 domains.

That led to the strategy of building a network of e-commerce sites on the 30 or so best domains, as well as the push to acquire technology and talent. It also brought in Ehrlich, from Canada's Indigo Books & Music, as well as a new chief executive and development officer.

So far the company's best domain has been perfume.com, which it has monetized with a basic online store. Another promising domain is cricket.com, especially for markets in India and the U.K.

As the company expands, it may build up its office in Seattle and add new offices in cities such as Los Angeles and New York. In Seattle, it employs a marketing person and one of the five Auctomatic employees.

The company's new strategy was also telegraphed last month when it hired Wanderspot, a Seattle Web design and engineering company started by veterans of Jobster.com, as a strategic adviser to build the destination sites. I wonder if Wanderspot will be acquired next.

The source article can be viewed at: http://seattletimes.nwsource.com/html/businesstechnology/2004308926_brier27.html?syndication=rss

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