Why should we invest in domain names: Best Natural Promotional Tools Online

in Domain Names Entrepreneurship Tech News by Francis Simisim — May 7, 2009 at 12:00 PM | 6 comments

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I’ve been investing in domain names since I’ve started my whole web 2.0 exploration. At first all I focused on was getting great names for my 2.0 projects, however as I got to explore the web, I found that domain names buying and selling is a big business.  I’ve recently started investing in great domains which I think will grow exponentially in terms of value. Here’s some reasons why I found investing in domain names is a must:

Your online property

Remember during the days when we say property, it means land. Well today, in the digital era, domain names is the same as digital property. Like real properties:

• You can build up your domain names for your own (personal) use, commercial, business etc.
• Having an easy to remember domain name is better (tech.com vs techfilipino.com), like real properties have more popular addresses (with more car and foot traffic).
• The more traffic (visitors to your domain name) the higher your value is.
• Sell Advertisement Spaces, sell products or services online and offline.
• High demands (with decreasing supply) from domain name investors, companies and individuals

Resale value

One of the most common ways of earning money online with domain names is thru reselling (or Domain name Flipping). Recently Ad.com was sold for $1.4 million, for the fact that the buyer believes that they could flip the domain name at a higher price. Domain name value can be measured by different ways:

• Domain name length

• Domain names that have less characters (e.g. ad.com vs advertisement.com) commands a higher value. But Search Engines today, seems to give more points to more keyword rich domain names (I’ve written about it before here LINK).

 

• Top Level Domain (TLD), Country Code Top Level Domain (CCTLD)

• Right now, TLD’s commands a higher resale rate as opposed to CCTLD’s (.com vs .com.ph).

• Domain name Spelling and remembrance

• We would see a lot of short domain names, however with some misspelled letters. Domain names closer to the right spelling (or the right spelling) are given more value. Being easy to remember also adds points to it.

• Traffic and in links

• This means how many people visit your domain name and how many websites are giving you links to your domain name. The more traffic and links means more points in search engines which gives you more traffic thru search engine searches.

These are just examples of how domain name values are derived, but obviously there are more to how this could be done. There are no official way of calculating the value of a domain name, the market is pretty much open and values are derived by your own perceived value, professionally assessed value or seller’s offer. One of the highest recorded resale of a domain name is by fund.com which was sold at a high value of $9,999,950.

Becoming Scarce

As Good Domain names are traded at really high values, it is becoming scarce. As a matter of fact, several programs have been made to check on domain names that is available by using common dictionary words or by popular keywords. Domain names are so scarce, that all (TLD) 2 character domain names are unavailable, while 3 – 4 characters have only a few left and doesn’t make sense (either with a number of a ‘-’) .

But scarcity means that we could resell the domain name at a much higher rate and that people would perceive the value higher. And there are still some few good keyword domain names that can still be registered (although longer, usually 2 – 3 word domain names).It’s best to be aware and invest now while there are still some good domain names with great keywords to get as opposed to later when you would have to buy your domain name from a person X times the price.

Easy and Paperless Transfer

Like real properties, you are given a deed for each property that you own. The best thing is that you don’t need to keep that deed as it is kept for you online. All you need to keep is the receipt of registration to have a proof of registration.

When you are going to sell your domain name, all you need is to transfer. Transferring domain names are really easy and there are 2 situations which you’d be facing when transferring domain names:

1. When transferring a domain name within the same registrar (i.e. transferring my domain name from a GoDaddy Account to another Godaddy account). You only need to use the transfer function with GoDaddy which allows you to transfer your domain name to account for free.
2. When Transferring a domain name with another registrar (i.e. transferring my domain name from a GoDaddy account to 1&1 or eNom account holder). All you need to have is your unlock code which must be requested from your current registrar. You first pay for the request for transfer and then follow the instructions that will be emailed to the domain name holder. Once done, it would take around 2 – 3 working days before the domain name is fully transferred to the buyer.

Online Presence for companies

With recession comes stiff competition, with people have less spending power the more exposure we get the better chances that they’ll be our customers. It’s pretty much having the presence to remind people to come visit you.

With the rampant use of the internet, expected growth of internet users (increase of more than 20% worldwide), and increase of time spent by regular people online, it will definitely become the best places to market. And using domain names to market in search engines is the best way to do so. For example, kfc.com (kentucky fried chicken) could also buy the domain friedchicken.com to allow them to get the people searching for fried chicken to visit their website. Using generic keyword rich domain names will allow you to be easily searched and given much more points in search engines.

These are just some of my views on why we should invest in domain names, it is a growing market with lots of opportunities. I believe sooner or later domain names will increase in value exponentially, and that more and more people will be looking for great domain names. Whether your target is to earn from domain names or use it to boost your online presence, Domain names are the best natural promotional tool online. Invest now while there are still some good domain name finds, otherwise be prepared to pay ridiculous amount of cash later on when the market stabilizes.

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