The million dollar mystery behind Milk.com

0:00This message comes from NPR sponsor Charles Schwab. Financial decisions can be tricky. Your biases can lead you astray. Financial Decoder, an original podcast from Charles Schwab, can help. Download the latest episode and subscribe at schwab.com slash financial decoder. This is Planet Money from NPR. So, Jeff, last year I stumbled across a kind of mystery that you and I have been talking a lot about. Oh, yeah. Alex, you have been obsessed with this. It is about this website called Milk.com. Actually, let's just pull it up. Right. So I'm going to type in Milk.com. And it's pretty basic looking.

0:47It's black and white. Not many images, mostly text. And the homepage says something about a lactose pipeline. Yeah, apparently this is just a personal website run by a guy named Dan Bornstein. He's got his resume up there and also a page where he puts up his favorite recipes. Like, he seems to be a fan of a dessert called Cornmeal Froggies. Whatever those might be, but my favorite part of the site is the FAQ. Oh, yes. Right, right, right. So, like, question. Is Milk.com a commercial internet service provider? Answer. Moo. Question. How much does an ad cost on Milk.com? Answer. Moo. Does Milk.com have any ties to the dairy industry whatsoever?

1:29Answer. Moo. Like you knew what was coming. The answer to every question. We had many questions. The answer was always moo. Moo all the way down. Right. And so the big question, the big mystery here is that this guy Dan seems to be sitting on some pretty valuable internet real estate. You look at other domain names like chocolate.com. In 2019, that apparently sold for over a million dollars. Or even bagels.com. That sold for$500 ,000 last year. Exactly. This is why I've been so obsessed. When I see milk.com, it feels like walking through downtown Manhattan. There are skyscrapers everywhere, corporate headquarters here, Gucci store over there.

2:14And then I see a little shack. Shack. Milk.com is that shack. What is the deal with Milk.com? Why didn't a developer buy that shack, demolish it, and build a high-rise? Hello and welcome to Planet Money. I'm Jeff Guo. And I'm Alex Mayasi. So if chocolate.com and bagels.com are worth so much, why is Milk.com just sitting there? Why is someone using something so valuable to post his resume and favorite recipes. Today on the show, we dive into the world of internet real estate, where investors gamble on the value of everyday words. And we chase down the owner of Milk.com to find out in this day and age, what is a domain name actually worth?

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3:44No need to panic. With your iPhone, you can tap to pay using Apple Card with Apple Pay. And earn unlimited daily cash back when you do. Apple Card is ready when you need it. Subject to credit approval. Apple Card issued by Goldman Sachs Bank USA Salt Lake City Branch. Terms and more at AppleCard.com. To understand the world of domain names, we called up Rob Schatz. He's like a real estate agent, but for domain names. And he says a lot of his clients are surprised at how much they can go for. So you'll have really smart, really accomplished people who have done a lot. And then they come into this world and they're like, I will pay$50 ,000 for this thing.

4:23You're like, that's a$10 million domain name. And they're like, what? They're like, what are you talking about? Rob works with companies to find the right home on the internet for their businesses. He's helped his clients buy more than 1 ,000 domains in the last couple years. And Rob says if you want a premium domain name, you are going to have to pay up. I'm not kidding. There are massive deals that happen behind the scenes. I think Voice.com sold for$30 million a few years ago. Rocket Mortgage bought Rocket.com within the last 12 months, I think, for$16 million. So these are incredibly valuable assets.

5:00To be clear, most domain names are not that valuable. You can go register one for under like$100. For instance, Alex, you are currently writing the Planet Money book coming out next spring. And I just checked, planetmoneythebook.com is still available. Okay, okay. Interesting. Okay, but you get the point, right? In theory, there are an infinite number of domain names out there. Over the years, we've also created all these alternatives to the plain old dot-com, like dot-biz and dot-ai and even dot-horse. Okay, but Rob says mostly the people coming to him really want a dot-com. And the really valuable dot-coms, they fall into two categories.

5:43The first one, it comes from the early days of the internet. There's keyword domain names, so someone's like buyshoesonline.com, right? That's something that traditionally you could build a really solid SEO presence around. You could rank highly on for Google. Someone types in buy shoes online, you might show up first and you get a lot of free traffic. Rob says a great keyword domain name can fetch like six or even seven figures these days. But the market is changing. Yeah, today people use the internet by opening apps or searching on Google or asking AI. And they're not usually Googling buy shoes online.

6:19They're just going to Nike.com. There's a shift that has started, right, with the way that people are searching for things, where you're seeing less demand on keyword domains that you may have in the past. Instead, there's now more and more demand for what are called brandable domains. Like some of Rob's clients are new startups, so new that they might not have a name yet. And they come to him looking for a short and memorable domain that they can build their business around. So something you could call your company, Zoom.com, you know, Apple.com, Oracle.com, those are increasing in value. It just has to be a good word.

6:58But there are a limited number of good words out there. We talk about the radio test, too. Like, if you set the domain on the radio and you say visit phil.com, you know, for all of your needs, visit phil.com. How's that spelled? Is it F-I-L? Is that P-H-I-L? Rob says sometimes the right domain name, believe it or not, can make your company. There is this story that people in the business like to tell. It's about this struggling startup called DoorBot. They went on Shark Tank, raised zero dollars. But then, with the last of their money, they bought this super short, super premium domain name, paid a million dollars for it, made it the new name of their company.

7:39You have probably heard of this company. They make video doorbells. Their website is ring.com. In 2018, Amazon bought Ring for nearly a billion dollars. And, okay, how much did the ring.com name really matter for that? The founder of the company, at least, has said that it was a really important part of the turnaround. And a lot of companies that Rob works with, they are looking for their own ring.com story. They are looking for a domain name that sounds like the name of a billion-dollar company. Other companies come to Rob looking to upgrade their domain name. He recently helped a banking startup called Slash.

8:17They were using the website joinslash.com. He helped them buy Slash.com. And it can seem like unimportant. I think if you're looking from the outside, you're like, why does that really matter? Right? Join Slash versus Slash. Does that really make a difference? You talk to some founders and they think it makes a tremendous difference, right? From a legitimacy, reputation standpoint. point, if you have that one word dot com, you're a real company. And OK, maybe some of this is also just vanity. But there is a reason beyond vanity that a company might want to drop millions of dollars on a domain name.

8:54Yeah. In economics, the term for this is costly signaling. It's like when you see a Super Bowl ad, you assume that company must be pretty successful if they can pay for Super Bowl ads, you know? Owning a super expensive domain name does the same thing. So we asked Rob how valuable he thought Milk.com might be. Like, is Milk.com one of those coveted brandable domain names? He says, yeah, it is. It's four characters. It's pronounceable. It passes the radio tests. It has positive connotation. Rob says there could be real demand for this domain name. And not just from the dairy industry. For instance, Bread.com, it's not owned by Wonder Bread.

9:35It was bought by a finance company. And a word like milk has a lot of potential. There's a million companies that use milk or just are called milk already. Or Milk Street or Milk Movement or Milk and Honey that like would want to consolidate down to just milk. So there are lots of people that would want this, right? It's just a matter of do their budgets align with what the seller's expectations are. Rob says he could easily see Milk.com selling for hundreds of thousands of dollars, even a million. But instead, it's just some guy's personal website. And the internet is actually full of examples like this.

10:16Try going to happy.com or tv.com. These really premium internet addresses are just sitting vacant. Rob is often reaching out to the owners of these valuable domain names, trying to make them an offer. I sent people whiskey. I sent women flowers before. Just trying ways to get in front of people. I did get a response finally from this woman on name after I sent her a bouquet of flowers. She's still not interested in selling, but she was very thankful. Rob says that when he tracks down an owner, they usually fit into one of three categories. Sometimes it's a big company. For instance, Procter & Gamble has a lot of domains that it's not really doing anything with, like dry.com or scents.com.

10:59But those big companies almost never sell. Sometimes it's a random individual or a small business who might be interested in selling, or they might be too emotionally attached. And then you have domain investors, people who buy domain names so they can resell them for a profit. We called up one of the biggest domain investors. My name is Rick Schwartz, and I'm also known as the domain king. Rick was one of the first to make a name for himself, buying up and investing in domain names. So people started calling me the domain king. And then one day I said, gee, maybe I should register that domain name.

11:39Before he was the domain king, Rick owned kind of the precursor to domain names, 1-800 numbers. People would call, enter their credit card info, and pay by the minute. They were semi-adult in nature. They were more like chat lines, like 1-800-SIR-LOVE, 1-800-MAKEOUT. Yeah, and in the 90s, people were telling Rick that he had to check out this thing called the internet. It's supposed to be the next big thing. So Rick started buying up some keyword domains. And he started with ones that were, let's just say, not safe for work. I bought horny.com, okay? Am I allowed to say that? But I bought that domain, horny.com, for$40 ,000.

12:17Very quickly, Rick made a lot of money by redirecting traffic from his domains to other people's adult websites, basically renting them out. And in 2003, he sold one of his domains. My first big sale was men.com. You literally owned men.com. I owned men.com. And then I sold men.com for 1.32 million. And it was big news. I mean, it was on CNN. It was on outlets all over the world and newspapers. It was a big, big deal at that time. Over the years, Rick has made millions selling and renting domain names. Right now, he owns about 7 ,000. He thinks of them like an investment portfolio. And his portfolio isn't just adult-themed domains.

12:59He owns domains like banker.com and tradeshows.com and delivering.com. Most of these domains are just empty. Rick gets offers for them all the time, but he rejects almost all of them. Let me tell you something. The most important, the most powerful word in this whole English language or any other language is two letters. It's called no. No. No. You have to learn how to say no. When's the last time you said no to like a really big offer? I think I got one last week for seven figures on something, but, you know, it wasn't even something to consider. Yeah. Someone offered Rick$1 million for one of his domains, and Rick didn't even consider it.

13:45Why are you just holding on to it? Why aren't you selling it? Because I'm not going to undervalue my own stuff. Listen, if you have 100 Ferraris in your garage, are you going to sell them for$1 ,000 each? Are you going to wait for the guy that says, oh, I'm a guy that loves Ferraris. I know the value of a Ferrari, and that's the guy I'm going to meet. Rick is the type of domain investor who is waiting for a whale of an offer. And in a perfectly functioning market, you probably wouldn't see so many Ricks out there sitting on undeveloped pieces of prime internet real estate. But the market for domain names is kind of weird.

14:21For one, it doesn't cost very much to hold on to a domain name. You just have to pay the renewal fees, which are around$10 to$100 a year. So people like Rick, they are happy to sit back and wait for years for the perfect buyer to come along and offer the right price. And it might take a long time for that to happen. The market is kind of thin. For instance, a domain like best.com could be worth a million dollars. Or who knows, it could be worth$25 million in the hands of that perfect buyer. Many investors are willing to speculate to bet that holding out for that big sale will pay off. In the meantime, domains like best.com just sit empty.

15:04And to be fair to Rick, he sometimes sells or rents his domains to people that don't have a lot of money. He thinks of himself kind of like a venture capitalist. He wants startups and entrepreneurs to pitch him a great business plan for one of his domains. If they can't afford the domain today, Rick will lease it to them until they can. Okay, so that maybe helps explain why there are so many vacant domains out there. But what specifically is going on with Milk.com? After the break, we track down the owner of Milk.com, and we find out why he prefers making dairy jokes to making a million dollars.

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17:05Okay, so we are talking to what I would consider an internet celebrity. I can't believe we're actually talking to you. Maybe a B-list celebrity at best. I don't know. Yeah. This is Dan Bornstein. He's a computer programmer in San Francisco, and he's basically Milk.com, the website, come to life. He is that person who created an FAQ where every answer was moo. Moo. And okay, here's the story of how Dan ended up owning Milk.com. Back in 1994, he had a work email address, but he was thinking of changing jobs, so he wanted a personal email, which was kind of a futuristic idea at the time. I had no personal email address.

17:48Personal email addresses, like, almost weren't a thing. No Gmail. Yeah, no Gmail. Right, but this is probably even pre-Yahoo, pre-Hotmail. We could only dream of Hotmail back in 1994. Yeah, yeah, yeah, yeah. So back then, if you wanted your own email, you had to get your own domain name. This was fairly early. So, you know, I could have gotten dan.com or daniel.com or... What? Yeah, probably. Like, almost certainly. Almost certainly. It's like, it was a green field. But Dan didn't want his email to be dan at dan.com. So instead, he chose a domain name kind of the same way that I chose my AIM screen name back in elementary school.

18:25Yeah, this whole thing, it is based on a nickname that some guy at work had given him. He gave everybody a nickname and he loved calling people by that nickname, whether they liked it or not. And he knew that like I happened to like chocolate milk, you know, and so he started calling me Milk Boy. And I'm like, Milk Boy. He's like, hey, Milk Boy, how's it going? Milk Boy. Yeah, Milk Boy. I resented it a little bit, but then I sort of decided, OK, I'm just going to own it. So that's it. That is how Dan decided on Milk.com. And at the time, all Dan had to do was apply for it. Right. This was so early that domain names were free.

19:06Back then, the internet had different rules. There was an organization managing domain names, and Dan had to write a paragraph explaining to them why he wanted Milk.com. I basically gave a very short version of the fact that I had gotten this nickname, Milk Boy, and that I thought it would just be fun. Okay, so you told the anonymous bureaucrat, you know that annoying guy in the office? He gave me a nickname. I didn't say it that way. Yes. Okay. And with that, Dan became the proud new owner of Milk.com. He used it to create his personal email address. He also made a website, put up some of his favorite recipes, his projects, his resume.

19:43It basically looks the same today as it did 30 years ago. And over the years, Dan has gotten a lot of emails from people offering to buy Milk.com. So many offers that he eventually put up a page on his site that says, Milk, not for sale. If you're not offering$10 million, I'm not interested. Which is kind of a contradiction. So we asked Dan, is it for sale or not? There's a link on your website that says you will sell it if someone shows up with$10 million. I mean, are you just waiting for a big enough bag of money? You know, that is what a lot of people have. It's a reasonable question. There is a price, but it's like, I'm not trying to get it.

20:26I just want to live my life. Dan doesn't seem to have some kind of secret plan for Milk.com. He just likes being Milk Boy and enjoys having his website at Milk.com and having his email address at Milk.com. A few years ago, he got an offer for around$100 ,000. He said no, but he is open to offers. So what I'll say is that$100 ,000 offer, definitely lowball. $10 million offer, definitely take. Between the two? I don't know. Do you think you'd be more swayed if someone sent you a letter or email talking about all the reasons they would really love to own Milk.com? No, I would be more swayed by evidence of an escrow account with the right amount of money in it.

21:23Oh, okay. Okay. After talking to Dan, I felt a bit torn. There's probably somebody out there who could be putting Milk.com to better use, like for the economy. But if one day I visit Milk.com and it's full of Got Milk ads or it's the website of a tech startup, I will be sad. I love Dan's Milk.com. I find it delightful. It feels like this relic of the 90s when the internet was a quirky neighborhood. There were art projects and niche blogs and personal websites like Dan's. And over time, the internet grew. And they were replaced by gleaming skyscrapers and corporate high-rises. Hotels.com, Facebook, Netflix.

22:06But DansMilk.com is still there. Like a historically preserved building from the internet's early days.

22:23That's right. You heard correctly. Planet Money is coming out with a book. Alex Piasi, you are writing it? Yes, it is coming out next spring. We have been working so hard on it and are very, very excited to share it with all of you. You can sign up at the link in the show notes to hear about pre-sale special gifts and book tour events. This episode was produced by Willa Rubin and edited by Jess Jang. It was fact-checked by Sierra Juarez and engineered by James Willits. Alex Goldmark is our executive producer. Special thanks to Dave Evanson and to the Hustle newsletter where I first reported on Milk.com.

22:58I'm Alex Mayasi. And I'm Jeff Guo. This is NPR. Thanks for listening.

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