Domain Name Selling Why it Shouldn’t Work

You’ve probably seen domain names for sale for ridiculous amounts of money. Think those names will lead to surefire online success? Before you get tempted to buy one of those names, read this article.

One of the most interesting phenomena on the Internet is the selling of domain names. In some situations it could even be likened to an auction-based system. There was a time in the nineties that it reached ridiculous proportions, with several people becoming millionaires from selling domain names.

Why are these names so expensive? Who are the buyers? Does domain name selling actually backfire sometimes? In what situations has it paid off? A lot of these questions have no clear cut answers, as long as the world has rotated; people have bought and sold “everything,” literally. Domain name selling would be consigned to a scam if it was examined closely.

Most of the names that go for extremely high prices (for this topic anything above a hundred dollars is considered extremely high) are domain names that contain key words that are in demand. Some of the domain names are actually category names. That’s all very well and good so far. But when these practices favor the seller over the buyer, then something has gone wrong with the equation.

Most of my grumbling against domain name reselling stems from the view that, from a branding perspective, it is a failure. Quite a number of SEO proponents argue that having key words in the domain name is good (something I have never agreed with) but the real issue is, the name alone does not make good SEO. If it is good to have the key word in the domain name, why wasn’t Monster simply called Job seekers?

I will be using as reference an excellent book by Al and Laura Ries, “The Eleven Immutable Laws of Internet Branding.” Al Ries considers domain names so important that he uses up two of his eleven laws on how to name your web site. But why am I bothering to bash a totally “harmless” practice? First, because it seems to be catching on in SEO circles; and second, it will definitely add useless costs to the cost of domain name registration and hosting, making it relevant to any one who is thinking of buying that attractive domain name. By the end of this article, you should be able to go through the mental exercise of coming up with an original name of your own.

In branding the most important decision you can make is what to call your product, in this case your web site. This concept seems to have encouraged the buying of “key word rich” domain names. A good translation of the phrase “key word rich” is “generic.” Your SEO expert and you webmaster will probably advise you to name a site which fits that description.

Sadly, most of these domain names are pretty awful; they lack imagination, and a lot of them just copy a description (common adjective) or a class (common noun) and turn it into a name (proper adjective or noun). Yet they are sold for ridiculously high prices; think www.desktop.com, www.mortgage.com, www.womenonline.com, www.seopro.com, www.etoys.com, and I am sure you think, what great names! Well, all failed in the first dot com bust; their names did not help them survive the changing tides.

In Alexa’s current top ranking web sites, it will be interesting to note that there are no common adjective nor common noun website names (the kind of names that are most commonly sold). All websites that are listed as top sites are proper nouns. In any listing of top brands there are no generic brand names (common adjectives or common nouns), yet unsuspecting buyer after buyer is sucked into the mental trap that all it takes for a web site to achieve success is a generic name.

The lure of getting generic domain names is encouraged by some SEO practitioners and is also a product of the herd mentality; SEO “experts” in all their wisdom tout key word rich domain names as essential for high ranking in the SERPs. The key word effect is negated by the fact that hundreds of sites jump on the key word rich name band wagon. The herd mentality is due to the fact that “everybody is doing it, so it must make sense,” without checking the real reason other webmasters buys up generic domain names.

The herd mentality stretches back to the first dot com boom and bust, when hundreds of websites went for generic names like www.shoes.com, www.cars.com and other common adjectives. This trend has carried on to the second Internet boom (and inevitable bust) despite all the indicators that it can be counterproductive at worst and indifferent at best. Personally the only reason I would use a generic name on a website is so as to take advantage of the current “herd mentality” and jack up the resale value.

Have you ever looked for a site you found once, didn’t bookmark or note down, and didn’t find it again? No matter how many key words you typed into the various search engines, you just couldn’t find it? Why didn’t you simply type the name into the address bar? You couldn’t remember it. Why couldn’t you remember it? It was too long, too boring, too generic or all three. The majority of names that are sold have these faults. They are actually forgettable.

Buying names because they have generic key words makes it difficult for web surfers to form a mental association between the name and your site. People find it easier to remember weird and off the beaten path names than they do common place terms and names. Everybody knows how to type in Google.com, but you may as well forget it if you are called search_engine.com — or is it searchengine.net? Or rather searchengineinfo.org? The mistakes that would arise from misspellings of your name would probably get searchers to another page entirely different from one on your website.

Consider www.sexproject.com, www.sex_info.com, www.sexinfo.com, and www.sexinfo101.com. Unfortunately I can’t remember any of them over any period of time; there are so many variations that it is virtually impossible for any of them to register in the mind of any searcher that is typing directly into the address bar. It would take a miracle, literally, for any of these web sites to make an instant impression based on their name alone.

The same cannot be said for www.clickz.com. Compare the name clicks to such websites as www.searchenginewatch.com or www.searchengineland.com (don’t forget that there is still www.searchenginenews.com) and take it for granted that search engine anything in a domain name is sure to be for sale for over a thousand dollars minimum, and to what end? To join the hundreds of sites jostling for sandbox positions in the SERPs? All the above have generic terms in their name, and all the rest with such terms in their names will be viewed as good buys. But isn’t there a mix up somewhere?

When buying a site that has a prior reputation and a prior standing in the market for particular key words (for example Developer shed buying up http://www.seochat.com/ or Google is buying www.jotspot.com) the buyer is actually buying the brand. No matter how cluttered the domain name is with key words, what is relevant is the way the site is identified in the minds of its searchers. Incidentally, the number of surfers is usually counted by using either registered users or daily number of page views.

Now let’s look at the usual situation where a buyer, simply because s/he believes that a domain name is “key word rich” (my translation is generic), buys that domain name from a speculator for a hundred times the original price or even more. With no real idea of what to do next to get the domain name into the minds of users, apart from hoping they will type it into the address bar, such a move is sure to be counterproductive.

Another situation is one that arises when buyers buy a domain name hoping to cash in on another site’s popularity. For example, buying a domain name such as www.my_yahoofinance.net to cash in on a successful brands name is probably copyright infringement. It’s mostly phishers, scammers and also some MFA sites, who participate in this particular type of domain name buying.

Others buy names which closely approximate popular brands to take advantage of misspellings by users (like the user won’t notice). There is a massive difference between the services of www.technorati.com and www.technocrati.com. Of course if you just want a Made for Ad Sense site (or worse, if you are actually a scammer) these names are all well and good. But if you are serious about building a serious long term Internet presence, you may as well forget it.

A recent high profile case occurred between Google and adult search engine Booble. Google sued the adult search engine for “aiming to deceive” with its look-alike domain name. Google’s case ultimately failed, but other situations may not end up the same way. Companies are not afraid to defend their copyrights, and the results may not always be pleasant for the infringing company depending on how that jury interprets the situation.

Here are some ridiculous fees that were paid for “hot” domain names that ended up as spectacular failures (note that at purchase most of these domain names were just that, “domain names”). The name www.business.com was bought for 7.5 million dollars, www.wine.com was bought $3 million, and www.wallstreet.com was bought for $1.3 million. All failed as websites (unimaginable, huh?). Fortunately, those times have ended. Now such domain names are “reasonably” priced to tempt the average webmaster. I mean $1500 is a measly amount to pay for http://www.quickloans.com/ right? Wrong, it will probably fail in as spectacular a manner as those in the first dot com boom.

Over and over again, the most successful brands on and off the net have been proper names. AOL and Yahoo! were the first Internet brands to break into Interbrand’s top hundred lists. The most successful Internet brands created their domain names using basic rules of naming which work for every naming situation.

Yes, some people are much better at naming things (and websites) than others. Over time we will look at these situations and see how best to come up with a domain name that should work, and not cost you anything more than $15 (at the most). Before then, next time you see that “must have” domain name for sale, take a deep breath and consider finding an alternative.

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