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Understanding The Value of Domain Names


Domain names are an integral part of the way the internet functions, as they directly represent the name  of a web site. Without domain names, a web surfer would have to type in an IP address in the address bar of their browser, which is basically a string of numbers separated by dots. Obviously, these segmented number sequences are much more difficult to remember than the standard web site name, thus domain names were invented.

Understanding the basics of domain names is rather simple, especially for those with adequate internet knowledge and a bit of technical sense. However, trying to judge the value of a domain name is much more difficult. In fact, there are even companies and individuals known as domain speculators that specialize in judging the value of domain names.

There are three basic factors that directly contribute to the value of a domain name: memorability, keyword/SEO optimization potential, and the value of the attached site (if applicable).

If you're curious about the value of a domain name, then you may find the following information to be quite useful.

The Length of the Name

Statistically, domain names that are shorter have been sold for higher profits.  This is because shorter domain names are generally more memorable, and therefore, they become popular more easily than longer domain names.  The length of the domain name is the most important factor that affects the memorability of the attached web site.

In addition, with a shorter domain name, there is a lessened likelihood of typos. 

In today's competitive internet industry, it is nearly impossible to find a domain name that is shorter than six letters. Names like eBay, Ask, Google, Yahoo, Go, and Bing are all perfect example of incredibly popular domain names that are under six letters. Purchasing a domain name that is less than six letters usually requires you to bid on the name at an auction site, or purchase the domain directly from the owner. Either way, these domains are never cheap, and they are usually more than $10,000.

Keyword/SEO Optimization

Another very important factor to consider when judging the value of a domain name is  whether or not the name contains and frequently searched for keywords. For example, although the word “basketball” is much more than six letters, it is a very common term that would most likely yield a lot of web traffic from search engines.

When people purchase domain names, ideally they'd like to put forth minimal effort to begin seeing progress. For this reason, many domain speculators and webmasters only buy domain names that already have a significant keyword value. Thus, it is important to consider the predefined popularity of name before judging its value. For example, while the domain name “boomboombam.com” may sound appealing to some people, it has no keyword value because nobody is searching for that term. When registering domain names, it is best to ensure that your desired name has some inherent keyword value.

Commerciality

Although the term “commerciality” is not technically a word in the dictionary, it is commonly used in the internet industry to describe something with commercial value. If the domain name pertains to something that can be sold or marketed, then there is a very high chance that it will sell for a greater price. A domain name that is related to a popular product would be much more valuable than a domain name that is simply related to a funny phrase or a personal opinion, even if the “non-commercial” domain is shorter.  The more of an opportunity there is to make a profit with the domain, the more likely someone will make a substantial investment to acquire the domain.

Letters and Numbers

Surprisingly, even though domains that contain hyphens and numbers are often more appealing and easier to read, these domain names generally rank lower in the search engines.  Most people do not include numbers or hyphens when they submit a search engine query. Thus, most domain speculators recommend purchasing a domain name that does not contain any hyphens (-) or numbers.

Many people make the mistake of purchasing a domain name like “products4skincare.com” simply because the alternative “productsforskincare.com” is not available. If you run into a roadblock like this, it may be best to move in to a new idea, rather than purchasing a domain name with hyphens and/or numbers. Choosing a domain name that is memorable, contains no symbols or numbers, and includes popular keyword phrases is the best way to ensure that your domain name investment is safe and profitable.

Other Articles:
An Introduction to Buying and Selling Domain Names
How Domain Names Work
The Basics of Domain Name Registration
What is the Domain Name System?
What is a DNS Server?
What Are DNS Records?
Common TLDs and Their Uses
What is a DNS Lookup?
Types of DNS Servers
The Difference Between DNS and Name Servers
The Benefits of Country Code TLDs
How to Create a Name Server
How to Choose the Right TLD for Your Domain
When to Use Domain Forwarding