Sean Stafford knows the value of domain names and has bought and sold large domain portfolios over the last 10 years. He rebranded his company ComWired by acquiring the premium domain name DNS dot com, which became an important factor to their success. His company later got acquired by Comodo (the second largest provider of SSL security certificates in the world) in late 2010, and today he operates as Director of Services for DNS dot com by Comodo.
1. Why should businesses invest in domain names?
There are many reasons that people or companies should invest in domains. By themselves, domains can be stores of wealth, recurring revenue producers, or sources for qualified lead generation. And one of the main reasons that businesses should invest in domain names is because of the brandability that domains can help achieve.
Take, for example, our own scenario:
About three and a half years ago my business partners and I decided to get into the premium, managed DNS hosting business. We began developing the software and technology to make the system run, we made deals to get servers in different locations, and worked on coming up with a brand and a name for the company. Being a startup, we didn’t have loads of money for a premium domain so we went with one we already owned: ComWired dot com.
ComWired was a made-up name so we knew we had to do a lot of branding around this domain in order to get people to associate “ComWired” with our industry, which was “premium dns.” This is not to be unexpected and we knew a lot of marketing would have to come into play.
When out at a conference or calling someone on the phone, I would identify myself as being from “ComWired.com.” The other party would always then retort: “What is ComWired?”
The situation always unfolded the exact same way. People would always ask what “ComWired” was and I would always explain. Since the ComWired name didn’t allude to anything in particular, this was understandable. But as time went on, my team and I continued thinking: “Wouldn’t it be more beneficial if we had a name that was instantly recognizable from the moment one saw or heard it?”
Enter DNS.com. After about a year of being in the DNS business, we decided to change things up and look for a more “proper” domain. We found DNS.com and we rebranded. Overnight we went from being a normal, relatively unknown DNS company, to one of the leading companies in the DNS world, thanks to the acquisition and rebranding with the DNS.com domain name.
Now when people ask me who I work for, I tell them DNS.com. If they have any knowledge of the DNS world or what DNS is then they instantly know they are dealing with a reputable company and market leader.
And aside from the obvious branding factor, the amount of leads from the domain itself really helped to boost our sales. It makes sense! When someone is looking for a DNS provider one of the first websites they might type-in would naturally be “DNS dot com.”
2. Which type of domain names should a company look for?
The unique goals that a company is trying to accomplish with their domain investment will dictate what domain(s) a company would need. In the previous example I explained how my team and I were looking to rebrand with a new name that would give us more marketability and branding prowess. However, there are many times when a company has an established brand and they are simply looking to invest in domain names to further cement their existing brand or to augment their customer base.
Many times a company can pick up domain names that have existing traffic and forward those domain names straight to their own website and garner sales from the additional visitors. In order for this to pay off, the traffic that is coming to the domain has to be looking for a product or service that is identical, or nearly identical to what the web visitor was originally searching when they visited the forwarded domain.
Many companies have done this with remarkable success in gaining new clients. The best part about acquiring domains and forwarding them to a website is that it doesn’t take much effort and can be a treasure trove for leads/sales.
Other reasons companies should look for domains are to protect their existing brand (.net/.org and singular/plural variations of their brand names), to reserve future potential product names, and gobble up generic domains that might provide an edge to any other companies in the same product/service space. Offense is the best defense, and if you can defensively register domain names that will give your organization an upper hand in the marketplace then you should do so. The low cost of domain registration coupled with the huge upside associated with owning domains in your specific industry or field makes for a very wise investment.
3. How does one know if a domain name is valuable?
Domains are valuable for many different reasons. Some are valuable for their uniqueness, some for the traffic that they generate, some are valuable simply for their vanity purposes (like sean.com or jill.com), and some are valuable for all of the above such as dns.com.
But as a general rule of thumb, I always go with these three attributes:
These are what I use as a baseline when looking at domains for purely investment and when no other metrics (IE: traffic stats) are available.
4. How should companies acquire these domain names?
There are two marketplaces: The primary market and the secondary market.
When you acquire domains on the primary market that means you’re registering the domains by hand because they are freely available to be registered. In a case such as this you can register them straight through European Domain Centre for only the cost of registration and then the yearly fee that needs to be paid in order to renew them.
In a case where a domain is already registered by someone else, you’ll either need to contact the owner directly and negotiate a price or hire a consultant/broker in order to secure the domain on your behalf. A broker works very much like a real estate agent in the fact that he will either find a domain that works for the buyer or contact the owner of a specific domain on behalf of the potential buyer. The broker works with both parties to come up with a price that is mutually beneficial and agreed upon by all. For payment, it’s fairly common for the broker to receive a percentage of the final selling price from the buyer, the seller, or often cases, both.