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What are Domain Names Really Worth?

Stephen Logan

by Stephen Logan on 20th July 2009

Anybody who has tried to setup a website will understand the difficulties you can face trying to procure the domain name. Getting the perfect .com, .co.uk, .org or any other variation isn’t always as straightforward as we’d like. With so many online businesses, competition for some names can be particularly stiff.

Sometimes a name is so perfect you just have to have it. However, if somebody already owns it and you have other companies vying with you to purchase the dream URL, you can expect to shell out some significant amounts of money. Although, perhaps not quite as much as the new owners of candy.com.

For sweet sellers, candy.com represents the pinnacle of online opportunity. Easy to remember domain names should pick up plenty of direct traffic from inquisitive types. The only trouble is would you really spend $3 million on it?

After buying the domain a short while ago, Candy.com has now gone live and will no doubt try to recoup that initial outlay as soon as possible. However, is $3 million too much for what, at the end of the day, is just a name? That’s a lot of sweets that they need to sell in order to just cover initial outlay. The site itself isn’t exactly the most cutting edge or original and look for it on any search engine with phrases like “sweets online” or “buy sweets online” and the “candy” equivalents and you’ll draw a blank; so what is the appeal of the domain?

Of course, it’s fickle to suggest that what is effectively a new site could be top of the search engines already; that just isn’t going to happen. However, when you’re paying so much for the domain itself, the design, SEO and advertising should be in place to ensure the very best visibility. Fortunately the size of the sale has garnered some significant coverage, including a post on TechCrunch this morning, so marketing is freely available for now. However, the days of such huge fees being commanded for domains must surely be coming to an end?

It’ll be interesting to see how the company fares and how soon it can overhaul that initial deficit and start turning over profit. But this story certainly does highlight the need to define your boundaries when it comes to setting up a website. You need to know how much to spend and where to invest money best in order to gain the optimum market exposure.

If you end up spending most of your budget on the name, then what do you have left for site design, copy and SEO? All of which are incredibly important to the success of any website. A name is only as good as the site it promotes. People may find you easier through direct searches, but if what they find isn’t up to standard they won’t stay. Topping the search engines and creating successful paid search campaign are the only ways to ensure the best long-term online exposure; as such attention should always be placed on maximising site optimisation.

An easy to remember name for an easy to forget site is no good to anyone.

Stephen Logan

Stephen Logan

Stephen Logan is our Senior Content Marketer at Koozai. With four years experience writing exclusively for the search engine marketing industry, he has amassed a wealth of industry related knowledge. He will be breaking news stories and contributing compelling SEO related stories.

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