Google pays $25 million for ‘.app’ domain
NEW YORK (MarketWatch)—With a winning bid of $25 million, Google Inc. GOOG, +0.53% beat Amazon Inc. AMZN, -1.21% and others to control the top-level web domain ending “.app”.The company won an auction Wednesday on ICANN, the nonprofit that oversees the Internet. The $25 million sum is the most paid so far in an ICANN auction, according to a spokesperson.
Icann lists 12 other applicants bidding for the domain, including Amazon EU S.à r.l., Amazon’s European hub.
In its application filed under Google-owned Charleston Road Registry Inc., the company stated that the domain “will provide application developers with the ability to customize domain and website name application offerings to signal to the general population of Internet users that .app websites are indeed related to applications and application developers.”
ICANN auctions off generic top-level domains as part of a program aimed at increasing competition in the space.
Google Inc. still has to sign the registry agreement, go through pre-delegation testing and trademark protections before it can be made available to the public, the spokesperson said.
The Nasdaq that peaked and plunged 15 years ago was a very different stock index
This is an updated version of a slide show first published in April 2014.Fifteen years ago, tech stocks peaked and started to come screaming back to Earth.
These days, they’re enjoying another upswing. The U.S. stock index known for being tech heavy — the Nasdaq Composite COMP, -0.49% — on Thursday traded within 1.2% of the all-time closing high hit on March 10, 2000.
Some market watchers might be thinking, “Uh-oh. Here we go again.” But the Nasdaq has changed in many ways.
It’s less tech-heavy, valuations aren’t at dot-com era levels, and Nasdaq companies are much larger and fewer in number, according to a 2014 white paper from the Nasdaq OMX Group and more recent data.
Plus the last tech boom’s CEOs, such as Microsoft’s MSFT, -0.47% Bill Gates and WorldCom’s Bernie Ebbers, have given way to today’s leaders, who include Apple’s AAPL, -1.50% Tim Cook and Google’s GOOG, +0.53% Sergey Brin. That then-and-now quartet is shown in the adjacent graphic.
Read on to learn more about the changes, as well as what they mean for today’s investors.
Remember WorldCom? How about Sun Microsystems? They ranked among the top 10 Nasdaq stocks by market capitalization before the dot-com bust. WorldCom and its chief, Bernie Ebbers, were felled by a massive accounting scandal, while Sun was gobbled up by Oracle.
The top 10 now includes Apple AAPL, -1.50% Facebook FB, -1.79% Google GOOG, +0.53% GOOGL, +0.60% and Amazon.com AMZN, -1.21% Fifteen years ago, Apple hadn’t yet launched the iPod, much less the iPhone, iPad or Apple Watch, and Google wasn’t yet a publicly traded company. Facebook CEO Mark Zuckerberg was in high school, and Amazon had been public for less than two years.
Who’s stayed in the top 10 after all this time? Microsoft MSFT, -0.47% Cisco CSCO, -1.34% and Intel INTC, -1.19% — albeit with diminished market capitalizations.
The Nasdaq Composite COMP, -0.49% remains a tech-heavy index, but it’s significantly less laden with purely tech stocks than it was at the peak of the dot-com bubble.
Information Technology companies accounted for 43% of the Nasdaq as of Wednesday’s close, down from 57% at the end of 1999. It’s an exact flip for IT and other sectors over the past 15 years, as other sectors now make up 57% of the index, up from 43%.
Software — “prepackaged software” is actually the exact government label for that industry — fell to 10% of the index from 24% over a 14-year period starting at the end of 1999. The biological products, cable TV and pharma industries all came to have more weight over that period, ranking among the top seven industries.
It’s still correct to describe the Nasdaq as a tech-heavy index, but another option is to say “growth heavy,” said David Krein in an interview last year. At that time, Krein was head of index research at Nasdaq OMX Group Inc. NDAQ, -0.95% which runs the Nasdaq exchange.
It’s not hard to find folks here and there perceiving the formation of another Internet bubble.
However, we can take comfort in the fact that the Nasdaq Composite’s overall valuation is still much lower than it was 15 years ago. The index’s price-to-earnings ratio was an “otherworldly” 152 at the end of 1999, according to the Nasdaq OMX Group’s white paper. That ratio stood at 26 on Thursday, according to FactSet data.
In addition, the P/E ratios for certain closely watched companies aren’t back to 1999’s bubblicious levels. Yahoo’s YHOO, -0.38% P/E was 787 back then versus 36 more recently. Apple AAPL, -1.50% was at 37 versus today’s 17.
“Valuations today are clearly lower, by virtually every measure, than they were in 1999,” Nasdaq OMX Group’s Krein told MarketWatch.
MarketWatch’s Mark Hulbert sounded a similar note in a recent column, saying the Nasdaq is nowhere nearly as overvalued today as it was 15 years ago.
The Nasdaq Composite consists of roughly half as many companies today, with the number of components diving to 2,568 from 4,715 in 1999. Nasdaq companies are now generally larger and older.
Regulation often gets the blame for the decrease in publicly traded U.S. companies, which also has hit the New York Stock Exchange. Critics of the Sarbanes-Oxley Act of 2002 say that post-Enron-scandal legislation simply made it too expensive to be a publicly traded company, while the law’s supporters emphasize it’s helped to restore trust.
There remain 500 stocks in the S&P 500 SPX, -0.30% and 30 members of the Dow Jones Industrial Average DJIA, -0.45% of course. That’s because those stock-market benchmarks are created by committees, while the Nasdaq Composite represents the value of all stocks listed on the Nasdaq Stock Market.
Yes, you can laugh or cry about Pets.com and other dot-coms that turned into dot-bombs. But going bust isn’t the No. 1 reason that a company is no longer in the Nasdaq, according to the white paper. The top reason for deletion from the Nasdaq has been merger-and-acquisition activity.
In some cases, two Nasdaq companies merged, with one listing going away. In other cases, components would be acquired by companies not listed on the Nasdaq, leading to fewer listings for that exchange.
M&A activity resulted in the disappearance of 54% of stocks on a market-cap basis, and 46% of stocks based on the overall number of deleted stocks. That’s for the 14-year period starting at the end of 1999.
“This runs counter to the popular belief that in the collapse of the tech bubble most of the Nasdaq stocks were ‘dot-coms’ and deleted due to bankruptcy,” the white paper states.
While the overall number of Nasdaq companies has dropped sharply, it isn’t all about a rush to the exits due to M&A, bankruptcy or other factors.
There have been plenty of newcomers since 2000. Google and Facebook FB, -1.79% are probably the best-known IPOs from this period. What about Twitter TWTR, -2.69% ? Well, it listed on the New York Stock Exchange.
The NYSE has achieved some tech-listing wins over its rival exchange, as a MarketWatch blog post noted. Trading issues marred Facebook’s IPO on the Nasdaq in 2012, and that influenced some tech companies to pick the rival NYSE, said one expert quoted in that post.
About 20% of the Nasdaq Composite’s weight by the end of 2013 was owed to companies that had staged initial public offerings in the prior 14 years. That’s 710 companies, according to one draft of the white paper.
The Nasdaq Composite on Thursday came within 11 points of the 5,000 level. The index has not approached that psychologically important round number in a decade and a half.
As Friday trading kicks off, the Nasdaq Composite has two records in sight: Beyond the March 10, 2000, record closing level of 5,048.62 stands the all-time intraday peak of 5,132.52, notched on that same date.
The Nasdaq Composite gets attention in news reports each day, mentioned alongside the S&P 500 and Dow, but Nasdaq OMX Group’s then–head of index research Krein emphasized that the Nasdaq 100 NDX, -0.48% is the index with massive assets tied to it.
One of the largest, oldest ETFs — the PowerShares QQQ Trust QQQ, -0.44% also called the Qs or Cubes — tracks the Nasdaq 100, which is made up of the top 100 nonfinancial firms listed on the Nasdaq exchange. This ETF houses $40 billion in investor money.
But if you’re making a bet on tech, it doesn’t make sense to bet only on firms that just happened to list on the Nasdaq exchange, argued Dave Nadig, ETF.com’s chief investment officer. The three biggest providers of ETFs all have tech-focused plays as well, such as State Street’s Technology Select Sector SPDR XLK, -0.35% the Vanguard Information Technology ETF VGT, -0.53% and the iShares U.S. Technology ETF IYW, -0.49% which is ETF.com’s top pick among U.S. tech plays.
