Mike Kugler has been so anxious to own a newly released domain that he and a group of investors with Quad-City roots invested a half million dollars to buy it — making Internet history in the process.
Rock Island native Kugler, a computer software and electronics engineer now living in Branson, Missouri, and his partners acquired the Vacation.Rentals domain earlier this year under their new company Vacarent LLC. The $500,300 deal is believed to be the largest recorded sale of a generic top-level domain, or gTLD, according to Donuts Inc., which sells domain names.
Last week, Vacarent's new website Vacation.Rentals went live and Kugler and partners have high expectations of becoming a leader in the vacation rental industry.
"I've been chasing this for two and half years," said Kugler, the company's founder and CEO. He also co-owns Hunter's Friend Resort in Branson with wife Handan as well as a software company.
Along with Kugler and his wife, the company's investors include his brother and sister-in-law, Dean and Marybeth Kugler, of Davenport (Kalus Enterprises); Mark and Michelle Hendrick, of Davenport, (ITM Investments); Jim and Wendy Sherrill, Van Horn, Iowa; Marshall Hart, Danville, California; and Bill Whelpley, Kimberling, Missouri.
Vacarent bought the platinum name Vacation.Rentals from Donuts Inc., the global leader in high-quality, new top-level Internet domains. The deal was brokered by Brooke Hernandez of Uniregistry, an accredited registrar with the Internet Corp. for Assigned Names and Numbers, or ICANN.
The new generic domans were first announced a few years ago by ICANN.
"They're starting to take off now," said Kugler.
The new generic domains expanded the Domain Name System from 22 generic domains (such as .com, .net., .org) to more than 1,200 new names and strings. The move was designed to increase competition, innovation and choice in the domain namespace. The most popular gTLD is .guru, which launched in 2014.
"There are literally hundreds of gTLDs such as .attorney, .restaurant, .rental," said Kugler, who jumped right on the chance to buy vacation.rentals.
When the domain went up for sale last fall he was on the telephone in 10-15 seconds offering to buy it. Listed for $650,000, "I countered and said 'If you do $500,000 cash, I'll take it.' It was something that when we got it I was shaking literally," he recalled.
He added the extra $300 on top of the half million offer because at the time $500,000 was the largest sale price of a gTLD.
Kugler said people are so accustomed to using a .com address in their internet searches but with the new generic domains growing "They're going to have to drop their .com addiction."
He and his partners expect vacation.rentals to compete with the industry's leaders such as AirBNB; VRBO, which is owned by Expedia; and FlipKey, which is owned by Trip Advisor. "We're going to muscle our way into there and we'll be No. 4," he said.
Kugler said research shows that so many websites key on the phrase "vacation rentals" that it is the most frequently searched term online for vacation properties. He added that the exact search for "vacation rentals" has 165,000 hits a month. But "loose term matches" (such as "Orlando vacation rentals," "family vacation rentals" or "vacation rentals that allow pets") have as many as 127 million hits a month, he said.
"We're excited to leverage our name and our website to benefit both property owners and vacationers," he added.
As Vacarent launches its new website and online rental business, Kugler said they are planning a different business model. Vacation home owners and property owners will be able to list a location online for a $225 annual subscription rate. Travelers will face no fees to use the service, he said.
Kugler not only brings his experience as a software and electronics engineer in Silicon Valley but his own knowledge of the vacation rental business. He and his wife have owned their 16-room resort and a dozen condominiums in Branson for the past 15 years and used many of the "big guys" sites to find guests.
His brother, Dean Kugler, is an artist and co-owner of Red Box Design, a design-build company in downtown Davenport. While he leaves the website business to his brother, he said the partners had full confidence that Mike knew the potential for their new domain and website. "He's on the IT side, he's done multiple websites and resort web sites," he said "We're just the investors. But this one is even a new level for him."
He also sees the potential growth possibilities of their new venture. "We will start coming up first on searches because it's more generic (search)," he said.
According to Matt Overman, senior vice president of sales at Donuts Inc., which sold the domain, said the Vacation.Rentals team is "is offering an exciting differentiated solution for property owners and vacationers."
Anticipating that hundreds of thousands of searches will find his site a year, Mike Kugler added "We intend to be in there as a big player and really make an impact."