$5 million spent on a domain? Here’s why.

Recently Slots.com sold for 5.5 million dollars, when the general public looks at a domain sale of six to seven figures it erupts feelings of envy, mysticism, curiosity and plain head scratching disbelief. Much to the delight of companies such as Godaddy.com people go out in droves registering hundreds to thousands of domains treating the url’s like virtual lottery tickets. Let’s be realistic, companies do not sink thousands of dollars into an investment unless there is a calculated ROI, here we explore the reasons such as SEO value, branding power and conversion.

SEO – Needless to say one looks at a short, intuitive .com and sees obvious immediate value, but the real underlying benefit is in the Search Engine Optimization edge an owner gains. When you target a keyword(s) to rank for in Google what you are doing is attempting to gauge your prospects as they are having an internal conversation. Long story short (and what many people in the domain industry miss) is domains get you to the front page of Google for that term in a shorter amount of time. Many Internet marketers who read this are going to say, “Nonsense, there is no proof of this.”. Sorry, but I have tested this with my own domains, PurchaseDomains.com after a week of development was on the front page of Google for “purchase domains” competing with Godaddy.com, Sobriety.org was on the front page for “sobriety”, wildstyles.com on the front page for “wild styles” and the list goes on. As a result, these companies are not really buying domain names, they are purchasing the potential for massive amounts of traffic. “Slots” the word by itself is typed into Google 200,000 times a month, should the online gambling company Bodog optimize Slots.com correctly they will be more than just chuckling all the way to the bank. Understand this and you are ahead of the game on ninety percent of people blowing money on domains that serve only to drain their pockets.

Intuitive Branding – Did you know an estimated 15% of all Internet traffic is derived from misspells? Owning a short, intuitive .com can largely remedy this issue, on top of that return visitors who do not bookmark (and trust me, a majority of traffic still do not even know what a bookmark is) have a much higher chance of returning to a site if it easier for them to recall. CheapFlights.com, Hotels.com, Fly.com, what they have in common is that they are short, intuitive, brandable and easy to remember. A majority of my site’s traffic derives from return visitors, I want to make it as easy for them to punch up my website as possible.

Conversion – Perry Marshall, an authority in Google Adwords advertising, said from experience he has realized a lift in traffic conversion from owning the exact term domain of a keyword(s) he sought out. The closer your site comes to the internal conversation a prospect is having in his or her head, the closer you come to a click. If your domain, title and description line up with the thoughts and intentions of a user I promise you will see higher conversions that result into dollars. In fact, I know a few companies that own a domain for every term they go after, they find utilizing this technique allows them to target and become authoritative for multiple keywords.

Where does that leave me? – The most common argument I come across is, “I do not have that kind of money for a domain, I would rather sink my funds into development and marketing.”. While the domain is useless without marketing and development think of it this way, would you prefer spend the next ten years and oodles of money into a name such as slots.com or my-company-domain.net? Also, keep in mind that like real estate this is a one time purchase, it is the house you will be living in for quite some time, perhaps you should spend a little more than ten dollars? I can guarantee your competitors are and besides, the domain can be used as a company asset and later sold as such or flipped, good intuitive domains will only go up in value.

If you have a domain name in mind and need help acquiring it or want help analyzing keywords give us a ring, you can find me at NameConnect.com any time during the day or night prowling for good generic domain names.

John Daly is the CEO and founder of NameConnect.com aDomain Name Broker , he has brokered millions of dollars in domains including FileSharing.com, Outgoing.com, Custody.com, Katie.com and many more. He consults for small, medium and large companies look for advice on domains strategies, investments and search engine optimization.
photo credit: Phil Guest

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