It's every domain seller's dream: Bill Gates himself at the other
end of the phone line: "OK, you have 5 minutes," he says. "Tell me
why I should invest in your domain."
Do you know enough about domain value to answer Bill's question?
A proper understanding of what makes a domain name valuable is
essential not only for marketing your domain names to potential
buyers (like Bill Gates), but also for adeptly choosing which domains
to register, lest you end up with a domain portfolio only a mother
could love.
If you're a stodgy Old-Skool Domainer who's been around since the
fabled days of dot-com glory, you may already be familiar with
concepts such as ease of retention, commerce potential, length,
extension value, and avoidance of numbers and hyphens... But it's
not just size and extension that matters.
In today's domain market, the critical concepts are traffic,
brandability, and search engine compatibility. Let's look at each
of these in more depth:
1) Traffic:
On the Internet, more traffic is better. And it's expensive these
days: Yahoo and other directories charge $299 just for listing, banner
ads are all but ignored, and for some keywords the price of a single
click from a paid search listing exceeds $10! Thus, the targeted
traffic that your domain receives may well be the single greatest
driver of value. This is especially true for descriptive generic
domains that attract browser type-ins, and (to a lesser extent) for
expired domains that used to be developed websites. A handy formula
for estimating the value of your traffic is:
Traffic = # visitors x click-through rate x per-click bid amt.
Value (eg. traffic quality) for relevant keyword
If that's too complex, you can always skip the math and get a real-
world estimate of your traffic's value by using a Domain Parking
service designed to monetize traffic (eg, www.sedoparking.com).
2) Brandability:
Do you remember when we all thought the leading online bookstore
would be called Books.com, the #1 computer seller Computers.com,
and the leading online pet store Pets.com? Do you buy your food
from Grocery Store(TM), fill up at Gas Station(TM), and then have
lunch at Fast Food Restaurant(TM)? Thanks to advances in mass
brain-washing, most of us think of brand names when we need to
have these needs met. The Internet will increasingly follow the
real world, and brand names supercede generic domains in importance.
However, the good news for domain investors is that there will
always be new brand names being created, and these new brands will
need an Internet presence. If you have a knack for coming up with
catchy, succinct, and evocative names, you may hit upon "Centrino", "Froogle", or "The Clapper" before the big boys do. Just don't be
too greedy with your asking price: a brandable domain only takes
on its value after somebody has burned a few million promoting it.
Until that point, the company will opt for another name rather than
pay an extortionist price for the .com.
3) Search-Engine Compatibility
The art of Search Engine Optimization has gone from being a chapter
in Web Design books to a multi-million dollar industry. One of the
tools of the trade is a keyword rich domain name, which often takes
the form "Keyword-rich-domain-name.com".
Does this really help? The jury is still out, but try a few searches
for yourself, and you will notice that many of the top results contain
the keywords as part of the domain names. I have a theory for why
this works: It's no secret that Google looks at the text of incoming
links to help determine what a site is really about. The theory is
that people will give their links descriptive text (eg, "Quality
Domain Name Appraisals" instead of "Sedo.us/appraisal.php3"). But
in reality most people link using the domain name. So if your domain
name is "domain-name-appraisals.com", you will benefit from being
described with those keywords each time someone links to you.
So, that should give you a few good arguments to make to ol' Bill.
And while you've got him on the phone, please don't neglect to mention
that he can find more great domain names at www.Sedo.us!
Until next time, happy domain hunting!
Matthew Bentley
Sedonist-in-Chief
P.S. If you'd like a more detailed examination of how these factors
and others affect your domain's value, check out Sedo's Appraisal
Services at https://sedo.com/appraisal.php3