Business.com domain sold for $345 million

The costliest domain name business.com has been sold for a whooping $345 million. This is the second time the domain has been sold. Business.com was founded by entrepreneurs Jake Winebaum and Sky Dayton in 1999. The two were widely mocked for lavishing $7.5 million on a single Internet domain name — business.com — at the time. It was then the highest price paid for a domain name.

The Santa Monica, Calif., company has cash flow — of about $15 million — that will be but a minuscule portion of Donnelley’s 2006 operating income of $442 million. Traditional publishers are nonetheless willing to pay top dollar for Web-based businesses, given their overall growth rate and the wider consumer shift to Internet habits.

For that reason, the company was pursued by companies including Dow Jones & Co., publisher of The Wall Street Journal, and New York Times Co., which lost out in the auction conducted by Credit Suisse Group.

Some have begun to question the viability of paper phone directories. Earlier this year, Microsoft Corp. founder Bill Gates predicted that “yellow-page usage amongst people… say, below 50, will drop to near zero over the next five years.”

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