My uncle bought Bollinger.com as the family domain name in 1994. At the time, he had no idea of what the value of such a URL purchase could become. Over the past several years, however, he has had offers in the tens-of-thousands of dollars from multiple companies, including the well-known Bollinger Champagne Co. Of course, knowing my uncle, he would never sell the domain name unless he was offered an outrageous sum of money—perhaps in the high 6 figures to even a 7 figure number. On second thought, however, a number in the 7 figures might not be so outrageous for some domain names. In fact, the owner of candy.com paid three million dollars for his URL in 2009, and now he’s sitting on a pretty awesome candy site from which I am willing to bet he has made quite a bit more than the sum he sacrificed for it.
I currently own about 10 domain names, for which I paid roughly ten dollars each; because I only paid for a one-year subscription, I’ve thus far invested approximately 100 dollars in this effort. Will my investment pay off? Well, that depends on many factors. Two of the domain names are being developed, and one is up and running, muvdigital.com, which may be the site on which you are currently reading this blog post.
Domain names gain much more value when they are developed into a website, particularly when one devotes a great deal of effort to the site. Simply sitting on a domain name, however, can be a tricky investment, as finding the right buyer is never easy; often times a buyer may just try to find another URL for a better price. Yet owning a top quality premium domain likes cars.com or candy.com can have a huge pay-off, perhaps enough to retire on if you’re well into your middle age years.
Common sense would tell you that the shorter the domain name the more likely it is to be valuable. This is not always the case, as two-word domains can be much more valuable than an obscure one word name. For example, couponreviews.com goes for $1,888 GoDaddy as a premium domain name, whereas a name such as anomalistic.com is only worth $280.
Making up a word for a website may be the way to go as most premium one word names are far out of the reach of any new business’s pocketbook. Sites like cars.com sold for millions of dollars before the web was nearly as much a part of the American life as it is now, so with today’s social media potential, being creative may be the way to go. Unless you have uncommonly plentiful funding for your start-up or new business, go with a made up word or phrase that is relevant to your business. It doesn’t even necessarily have to be directly related to your business—as long as it will lodge an association with your business in people’s minds.
Perhaps the most ironic example is kingpin of today’s domain name market. When I say the phrase “Go Daddy,” what immediately comes to mind? (Alright, other than Danica Patrick.) The point is that the domain name has little connection in meaning with the service offered (some might realize that it is an analogy referring to the fact that they host your website), but it was creative enough to get the job done. Who would have thought that godaddy.com would be such an effective domain name for domain name purchasing and hosting? It should not be difficult for a business to come up with an equally clever analogy in order to buy a much cheaper domain name at roughly 10 dollars rather than shelling out the big bucks for a premium name.
Investing in domain names is tough, but I say go for it and start small. Try developing the websites as well, because this can add serous value to the URL. With web technology’s rapid progress and social media emerging as a dominant form of branding and advertising for all types of businesses, you cannot go wrong with making small investments for your business online. At worst, you will learn from your mistakes and will be empowered to avoid similar missteps in the future.