Case Study: Why Musk Acquired Tesla.com for $11 Million

Years before Elon Musk became the 2021 poster child for Bitcoin, he put millions of dollars into another digital asset – a domain name.

In February 2016, Tesla Inc. acquired Tesla.com from Stu Grossman, the long-time owner who had defended Tesla.com in a UDRP case filed by Tesla Industries Inc., not the car company. In an interview that I conducted with Stu, he indicated that the name had become a hassle to own and ultimately took Tesla’s offer to buy the domain name.

The offer from Tesla was, as we found out in 2018, $11 million after Elon Musk confirmed the price tag in a tweet.

Why did Tesla pay $11 million to acquire Tesla.com?

Tesla may be one of the world’s most valuable brands at the moment, but until 2016, the company made do with operating on TeslaMotors.com.

That name is perfectly fine for a motor company, but Tesla’s desire to acquire Tesla.com had something to do with its ambitions as a company, I think.

While Tesla made its name in the automotive industry, it has since looked far beyond cars towards clean energy products that have little to do with Tesla’s flagship car range.

Dropping “Motors” from Tesla’s domain name cost $11 million, but it gave the company the freedom to advance with its plans to branch out.

In October 2016, Tesla boss Elon Musk unveiled a new energy product, the solar roof tile. Not a wheel in sight.

The solar roof tile was accompanied by a powerwall in order to store energy produced by the tiles.

It’s no coincidence that 2016 was the year that Tesla acquired Tesla.com and launched its first product outside of the automotive industry.

Tesla continues to offer both its powerwall and solar panels for sale via Tesla.com. The company has also branched into commercial energy products. Again, a far cry from the automotive industry.

Aside from the fact that Tesla outgrew TeslaMotors.com, it was vital that it acquired Tesla.com as the company became more mainstream because of potential security concerns.

In a 2016 interview with me, Tesla.com seller Stu Grossman revealed that during his tenure as the domain’s owner, “a bunch of spam went out with tesla.com as the (faked) originating address. I think it contained a virus or a link to something bad. That resulted in a bunch of hate mail and a couple of very nasty phone calls to my residence.”

By owning Tesla.com, Tesla has better control over the domain name and the name’s security. While email spoofing is still possible, enabling scammers to send emails disguised as any email address, Tesla.com in Tesla’s hands gives the company security and legal control.

About James Iles

James Iles is a domain name industry writer and publisher of JamesNames.com. You can contact me here, or follow me on Twitter @jamesiles.

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