Getting just the right domain name can really add some muscle to your business.
Steroid-pumped David Peterson has some tips on how to do it
Remember the heady days of the dotcom boom? We were constantly being regaled
with headlines on the spectacular prices being fetched by Internet domain names.
These simple strings of letters and dots, originally bought for a couple of
hundred dollars, were changing hands for phenomenal amounts of money.
In one of the most famous cases, the domain name AltaVista.com was sold to Compaq
by its original owners for US$3M around a quarter of a million dollars
per letter. This price was not for an operational business, the purchase of
technology or even for a Web site only the rights to use a domain name.
It seemed that venture capital backed dotcoms were willing to pay almost any
amount asked to secure prime pieces of cyberspace real estate, and it didnt
take long for the domain names goldrush to begin in earnest.
The rise and fall
Thousands of individuals with dreams of easy riches
panned for gold online hunting for unclaimed domain names
and then buying them up a dozen at a time in the hope of being able to make
their fortune reselling them.
Some formed new venture capital backed dotcoms to excavate unclaimed domain
names by the hundreds and thousands, certain that they would unearth nuggets
that would secure a handsome return on their investment. Some of these went
in with a strategy, such as cornering the market on place names, reasoning that
sooner or later someone would want to create a Web site for every city and town,
and would be willing to pay top dollar for the corresponding domain name.
Others were more indiscriminate, attempting to register every word in the dictionary,
or every possible combination of three letters. Others registered names of companies,
products and rock bands ... although many of these ended up in court in trademark
disputes. Established companies with brands to protect also moved in quickly
to buy up any domain name that might conceivably be related to their products
before the cybersquatters got to them.
After the goldrush
Although domain names themselves varied widely in
value, the service of domain name registration was found to be largely undifferentiated.
As the very nature of the Internet permits ready price comparison, registrars
found themselves competing mainly on the basis of price with the result
that registering a domain name became steadily cheaper. This pushed up demand
still further and, before long, virtually every conceivable combination of words
had been registered as a domain name.
It seemed like the domain name market would continue to go from strength to
strength but no goldrush can last forever. In this case, the death blow
came in the form of the big new economy crash. Suddenly, those spendthrift,
venture capital backed dotcoms disappeared. As the shared hallucination that
had driven up stock prices dissolved, so did the corresponding shared hallucination
that had driven up domain name resale prices.
With virtually no-one left to pay the prices that domain name speculators were
asking, many went out of business overnight. Others were quicker to adapt to
the changing market and dropped their prices accordingly but even they
faced crisis when their domain names fell due for renewal and they found themselves
too low on cash to pay their bills.
Portfolios were allowed to lapse and domain names suddenly became more plentiful
again. (Even today, .com domain names are expiring at a rate of more than 15,000
per day.) With supply up and demand down, the domain-name boom town
quickly became a ghost town.
So as you listen to the wind bang the old saloon doors and watch the tumbleweeds
roll down main street you may well be wondering what this all means for you.
Register a domain name (cheaply)
If you want to register and start using an unclaimed domain, a quick trip to
the Network Solutions Web site (www.netsol.com)
with your credit card will secure the name of your choice for US$35 for one
year or up to US$175 for a 10-year lease.
However, it pays to shop around. Since the deregulation of the domain registration
market, there are dozens of registrars in operation, almost all of whom offer
cheaper prices than Network Solutions. Additionally, some registrars operate
through affiliates who pass on their wholesale rates with only a slight mark-up
thereby offering even cheaper prices. For example, the registrar ItsYourDomain.com
sells domains for US$14.95, while one of its affiliates offers an identical
service for US$8.88. Other companies, such as GoDaddy.com, go as low as US$6.75
for bulk purchases.
Strictly speaking, you are not buying a domain name only the rights to
use it for a period of time. Before this period expires you can renew it or
let it lapse, freeing it up for someone else to register. If you wish to sell
your domain name, you can charge any amount for the transfer of ownership rights
provided that you can find someone willing to pay and the new
owner will take over the lease.
The domain name industry is regulated by ICANN, the body responsible for certifying
companies as domain name registrars. ICANN maintains a list of accredited registrars
All of these have the authority to assign domain names for the top level name
spaces of .com, .net, .org, .biz, .info and .name. For country code name spaces,
however, you will need to contact a registrar that has been authorised by the
naming authority for that country. In the case of Australia, for example, its
www.aunic.net; for New Zealand,
and for Latvia, its www.nic.lv.
A more complete list of country registrars can be found at www.iana.org/cctld/cctld-whois.htm.
Whats it worth?
A domain name is only worth as much as someone is willing to pay for it
which in most cases is not much. Most domain names listed for auction on eBay,
for instance, are passed in without a single bid. Even dedicated domain name
market places like AfterNic.com are showing little sign of life, with only a
few dozen domain names sold per month from the 1.7 million listed and
most of these for less than $400.
However, good prices are still achievable for good domain names. Over the last
few months, jobs.com was sold to TMP Worldwide for US$800,000, free.tv for US$100,000
and industrialsupplies.com for US$47,250 but these are the exception
rather than the rule, and no- where near the stratospheric prices of a couple
of years ago.
For a fee, companies like greatdomains.com will supply you with an appraisal
of the worth of your domain name, but these should be regarded with caution
as the appraisal price may not be achievable in the current market.
Some domain name speculators seem unaware of the changes that have happened
in the market or maybe they are hoping that everyone else is. An enquiry
I made after one domain name was greeted with a request for US$150,000. I simply
waited for three months for the domain to expire and bought it from OrderYourName
What makes a good domain name
A good domain name should be short, memorable
and brandable. A long domain name one over 12 letters may be difficult
for your customers to remember, may be misspelled and can be difficult to fit
on a business card. Generic words should also be avoided. Domain names like
books.com are short, memorable and can be great for building Web site traffic
but can be difficult to build a brand around.
If your Web site is for a business, people have been conditioned to expect that
your domain name will end in .com or .com.au. Registering an address in a different
top-level name space, such as .net, .biz or .cc, may seem like a good way to
get the name that youre after if the .com equivalent has already been
taken. However, its likely to lead to more headaches than benefits in
the longer term unless there is a strong online branding opportunity in doing
so like burri.to or 2nur.fm.
Lastly, never, ever try to use a domain name that incorporates another companys
trademarks. An epidemic of cybersquatting registering domain names for
famous brands and holding them to ransom in the late 1990s was brought
to an end by the introduction of a dispute resolution system by ICANN to facilitate
confiscation of domain names from miscreants.
More handy hints
Where can I buy and sell registered domain names? There are a number
of marketplaces on the Internet that are popular for doing this. Many general
auction sites like eBay.com have sections for domain name auctions, and there
are also dedicated domain name marketplaces like AfterNIC.com and GreatDomains.com.
If you would prefer a private sale to avoid listing and brokerage fees, you
may want to consider listing in public newsgroups like alt.domain-names.forsale
and alt.domain-names.wanted. You may also be able to buy directly from the owner
if they are willing to sell.
What can I do with domain names Im not using? If youve
registered a number of domain names for which you dont have any immediate
use, you may as well get some value from them rather than letting them sit idle.
Putting up a for sale page, or redirecting visitors to your main
Web site, makes more sense than leaving prospective customers staring at a site
not found error message. To set up Web hosting for each one is likely
to prove expensive, but cheaper alternatives do exist. DomainRedirect.com, for
example, provides a free service to point your domain names to an existing Web
site or Web page.
The domain name I want is taken can I get another one like it?
This is a common problem. If youve had a great idea for a domain name,
the chances are that someone else has too and has already registered it. But
before resigning yourself to registering your domain in some out of the way
corner of the world like Burkina Faso, you might like to pay a quick visit to
a site like DomainIt.com (www.domainit.
com/keyword-search.htm) or namedroppers.com, which have handy domain name
suggestion tools. Say, for example, that you wanted to set up a Web site about
a date in history such as November the 13th but your preferred
domain name november13.com had already been taken. Typing in November
13 at DomainIt would return a long list of potentially suitable available
Who owns that domain name? When you register a domain name, the registrar
will ask you to provide contact information that will then be on public record.
If you go to a site such as checkdomain.com or domainsearch.com and type in
a domain name, you can find the name and contact details of the owner. Although
you may be concerned about the privacy issues of having this information published,
it is best to be honest when supplying your contact details. There have been
many cases of registrars cancelling registrations and reselling domain names
when an actual person could not be contacted to settle legal issues and ownership
Who used to own this domain name? Does your domain name have a history
that could help or harm its future? The Internet Archive (www.archive.org)
has a series of historical snapshots of many Web sites dating back to 1996.
While researching this article I thought Id do a spot of domain name speculation
myself, to experience first hand the current state of the market. To summarise,
I registered nine, four-letter .com domain names that I had found on an expired
domains list (www.domainduck.com).
In theory, the names should have had a high resale value, but even after extensive
promotion in all the usual places (and even a few innovative ones) I have only
had one offer for $30 which was then withdrawn.
So, if anyone has any use for a short, punchy and reasonably priced domain
name let me know. Alternatively, as Im unlikely to renew them, you could
wait until they expire in March 2003 and pick them up for US$8.88.
David Peterson is a principal consultant at Peterson IT Consulting (www.PetersonITConsulting.com)
providing eBusiness and consulting services. He can be contacted by email