“Choosing the right domain name is much like selecting a suitable plot of land on which to build your first home. Your domain is an investment. Seek out a nice neighborhood that is well priced and shows real promise for the future. Have confidence in the name you have chosen.”- Kristoffer Howes, President & CEO
Listed below are 8 carefully selected factors to consider when purchasing a domain name:
“TLD” or Top Level Domain
This is the extension that appears at the end of a domain name, such as .com, .ca, .net, .org, etc.
All other factors considered equal, a .com name will (often) sell for nearly four times (4x) the otherwise equivalent domain, registered in any other common global extension. Global extensions include .net, .org, and .info.
The .mobi extension, utilized for content to be delivered to mobile devices, is rapidly gaining value and popularity.
Some country specific domains, such as .co.uk and .de (Germany) are very prestigious, and can, in certain instances, command high prices.
It is hoped that one day the .tv extension will be used in connection with Internet enabled TV. Until hardware, distribution, and media companies are able resolve profit-sharing differences, sales of these domains will only occasionally result in high prices.
Number of Words
Single “real word” domains (no misspellings or abbreviations), especially in easily monetizable Internet industries, can be enormously valuable; particularly when accompanied by the .com extension.
Two word domains, without misspellings or abbreviations, are also quite valuable if the domain name is easily monetized, and the TLD is of high quality.
Values plunge when considering domain names with three words or more.
Content
Domain names containing misspellings, abbreviations, hyphens, special characters not found on a standard keyboard, or other text oddities often have very little value.
Domain names containing a phrase that is trademarked are very likely worth nothing. The registered trademark owner could be in a legal position to summarily confiscate the domain from you.
Can The Domain Name Be Monetized?
Website monetizing is the process of converting existing traffic into revenue. For example, Google Adsense is a popular method of monetizing a website. In this application, how attractive is your domain name to motivated online consumers? Will the name itself generate traffic?
The extent, to which a domain name can be monetized, has a major influence on its value.
Domains in the Sex, Financial, and Health industries often top the list in terms of high value sales.
Generic vs. Non-Generic
Generic domains are generally more valuable than non-generic ones.
A generic domain name is one that contains only real words (ones you can find in a dictionary), and has no contribution from proper names (first or last).
Generic .com domain names in highly monetizable industries are immensely valuable and are, for the most part, very difficult to secure.
Number of Letters
Three letter .com names can be the most valuable, even if they mean nothing.
Four letter .com names usually need to be pronounceable to have any value. They do not need have to be real words found in the dictionary (cool sounding four letter .com names can be very brand able, even if they are created).
When your domain name reaches five letters or more, the value is driven by the quality of the word or words (generic vs. non-generic, monetizable vs. non- monetizable, etc.).
When surpassing 8-9 letters, the value tends to decrease substantially unless the domain name is highly monetizable.
Branding
Domain names that are easy to say and remember, easy to type in, highly reflective of predictable monetizable content, and/or generate a lot of “type-in” traffic (people typing your domain name directly into the address box in their browser rather than finding your domain via a search engine) are highly sought after. These domain names may sell for significant sums of money.
E-Market Size and Profitability
This factor directly impacts how easily the domain name can be monetized. Products and services that do not lend themselves to the e-marketplace (directly, or indirectly through selling ad space) will (most often) have little value.
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