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Return of the Gold Rush?

Return of the Gold Rush?

May 6, 2002
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" Does the domain name samadams.com then have intrinsic value? You bet! Branding is one of the key values, and best uses, of a good domain name. "

Need (or want) a new domain name? Thousands of 'dot info' domain names are about to join the millions of once-registered 'dot com' names, as well as all of the previously unregistered 'dot biz,' names, plus a veritable alphabet soup of other domains, with extensions like .cc, .tv, and .us:

I read an article this morning at Wired.com that now has me thinking about the current state of domain names. The article was called "Dot-Com Still the Main Domain " and in it, Joanna Glasner described the relatively slow acceptance of the new 'dot-biz' and 'dot-info' domains; many of which are not really 'live' addresses, and those that are often contain no actual, original content, but are in fact used by established businesses and Trademark holders to protect their intellectual property and other interests from 'cyber squatters' and other online extortionists. And speaking of these digital opportunists, it appears that they will be forfeiting approximately 15,000 'dot info' domain names containing commonly used terms that were originally registered with improper or fraudulent Trademark claims. Look for these domains to be re-released in June.

But even with an impending re-release of 'choice' domain names, should we be rushing out to acquire some of these new online properties? In an era where the bloated inventories of many domain speculators are now returning to the 'available' listings after languishing unsold in some dreamer's portfolio, should Webmasters be stockpiling names in the often false assumption that they might be worth more than their registration fee?

What's In A Name?
The "value" of domain names is highly overstated. For example, "Spot.cc" used to run radio ads' promoting domain speculation, claiming: "business.com sold for over 7 million dollars! Buy your domain name before they're all gone!" Their web site stated ".CC is the new rage! .CC Domain names are a valuable asset. People who registered easy to remember .com names early have sold them for thousands (in some cases millions) of dollars. The value of .CC domains increases everyday." As if a .cc domain has any real value...

Now, don't get me wrong, I'm not putting down the company promoting this product, nor the wonderful CoCos Islands that are the "CC" in "dot CC" — in fact, one of my dream vacations is to dive CoCos and enjoy their massive schools of Hammerhead Sharks. It is just every community who wants one can set up their own dot whatever, making this a never ending cycle of domain name availability, driven by the false hope that these names can be later resold for a profit.

What people miss in the fog of perceived profits or false security is that besides .cc, there are well over a hundred "dot whatever" extensions out there today. In my opinion, it is a waste of time and money to chase them; either out of "greed" (someday this will be worth something!) or "fear" (I better register my name before somebody else gets it!). Now a good " dot com" will always demand value - and respect - because it will be seen as an "established" online business. That being said, are all "dot coms" valuable? Of course not!

"business.com," "flowers.com," "weather.com," "golf.com" etc. will always have "value" because they are single word domain names with broad, generic appeal. What they have, in addition to being easy to spell and remember, is tremendous "type-in" value. Let me illustrate with a brief personal story; it's Mother's Day, and I want to send mom some flowers. I DON'T know whom I'll be dealing with, but I figure that if they're smart enough to own "flowers.com" they would get a nice bouquet to mom on time. I type in "flowers.com" and BOOM! Lucky guess! I could order flowers online and send them to mom. [The fact that it would have been EASIER to do so by CALLING 1 (800) flowers is a whole other story mitigated by the fact that I could "see" the sample bouquet online rather than "imagining" it from a telephone operator's verbal description.]

So, a name has value because of its generic appeal. What else instills value in a domain name? Having a highly identifiable brand name for one thing. I will not get into trademark disputes, or whether or not a person named "Sam Adams" has more right to the domain "samadams.com" than does a beer maker, but as a consumer, I expect that if I type in "www.samadams.com" I will visit the brewer's home page. Does the domain name samadams.com then have intrinsic value? You bet! Branding is one of the key values, and best uses, of a good domain name.

What else could make a domain name valuable to someone? I have personally found that a domain name can have value for "emotional reasons." Here's another personal story: I built an AVS site called PORNWORKS. The domain pornworks.com was already taken, so I settled for the next best thing: porn-works.com. I was happy, but not quite satisfied. I knew that porn-works had almost no type-in value, and that anyone who did not bookmark my site, but whom was trying to return "from memory," would miss the hyphen. Thus, pornworks.com would benefit from my marketing of porn-works.com. I don't care about .net or .org, either. If a surfer doesn't enter my site through a link, he'll type in the URL, and he'll end it with dot com.

Was this really a big deal? No. Most of my traffic came from search engines. The few who might try to visit by typing in my URL and missing the hyphen were negligible. However, I wanted to have pornworks.com — it was better than porn-works.com, and well, I wanted it!

For branding and personal (emotional) reasons, pornworks.com was worth up to $2,500 to me. The owner of this domain briefly had a site up, and although I wanted to contact him and offer to buy the domain from him, my "little voice" told me to be patient. Every month I ran a WHOIS search on pornworks.com until one day, it was available! The domain name that was worth up to $2,500 to me wasn't worth the $35 renewal fee to the previous owner. Consider this carefully.

So what then is a domain name worth? It is worth what someone is willing to pay for it. Only someone willing to buy it can tell you the amount. If you want to see what the market will bear, list your domain for sale on ebay. There are also quite a few places that specialize in domain names for sale. Visiting these sites can be entertaining; look at some of the names, and some of the "asking" prices... Should you then purchase domain names on speculation that they will be worth more to someone else? Not anymore, all the good dot com names are gone, and before I paid you "big bucks" for a "good" dot CC, I'd register it as a dot biz, dot info, or something else with marginal (at best) type-in value.

Think I'm crazy? Then visit http://www.whois.net and do a "Deleted Domain Search." Here you will find an endless list of domain names (7,901,225 of them as of today!) that were once registered, but are now available. Most of these names someone bought thinking they would be a great investment, only to discover that they weren't worth the $35 renewal fee... I don't care about .net or .org, either. If a surfer doesn't enter my site through a link, he'll type in the URL, and he'll end it with dot com. If someone takes those other domains and builds the brand, that's fine, I'm the one who benefits, because in the end, the surfer will only remember Porn Works — and then end it with a dot com!

With all of this in mind, unless I was interested in working the search engines with some keyword saturated domain names like 'free-teen-porn.biz' or some such, or had a compelling need for a '.biz' '.info' or any other extension to support a targeted marketing effort, I would find little reason to register such a domain. Still, there is no doubt that whenever any new extensions become available (or re-available) that there will be a market for them — even if it only lasts a short while until the 'domain dujour' rush subsides:


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