10 Tips for Investing in Domain Names

By on May 8, 2007

1. Attempt to Predict the Future

You may not have the genius of renowned futurist Ray Kurzweil who has been hired by Bill Gates on numerous occasions just to talk, but you can still predict the future of the domain industry. By the time a child born today graduates from college, Kurzweil believes that poverty, disease, and reliance on fossil fuels will be a thing of the past. Ray bases his predictions on the exponential growth in the power of technology, or as he calls it–the Law of Accelerating Returns. We can apply futuristic predictions to valuable domain name investments. Think outside of the box; education & technology, information syndication, social networking, robotics, alternative energy…you get the picture.

2. Stick With the “Dot Com”

This suggestion could be argued, but generally successful investors and domaining old schoolers will tell you that they will put their money on “.com” remaining at the top of the food chain for quite awhile. If you get in the market early for a popular ccTLD (country code top level domain) like .us, .tv, etc.; you may be able to snag a great name. The risk factor for “.com” is significantly less than the other extensions. Maybe we should ask Kurzweil what he thinks.

3. Keep it Short and Sweet

In the world of domains, generally speaking; 2 letter names are a fool’s dream; 3 letter names are king; 4 letter non-sense names are an easy sale; 5 letter names bank a small fortune. You would, however, be hard pressed to find any of those to add to your portfolio. My best suggestion to you is not to stray past two words within a domain name. Memorability, ease of typing and visual aesthetics play a big part in a domain’s value.

4. Keep it Brandable

Make sure the words you choose in your domain flow well together; repeat your name aloud several times to see how it sounds spoken. Ask your friends and family what their first impression of your name choices are. Does your name relate well to the industry or audience the website would be targeting?

5. Keep it Real

We have all seen them, invented names or characters mashed together that form pronounceable syllables–Yahoo, Google, Twitter, Tumblr. While many popular websites today have done well with these odd brand names it would be hard to market a cheaper version of these names to anyone, which brings me to my next point…

6. Have a Buyer in Mind

Before investing your money into a domain name, ask yourself a few questions about your future buyer. Would anyone want to buy this domain name today? What niche industry or population could I market this name to? Is this domain relevant to a small business industry, a single person or a large movement? The more potential buyers the better.

7. Don’t Spend More than Current Value

Do your homework. Research aftermarket domain sales portals such as Sedo, TDNAM, Afternic as well as domain forums for current sales prices of similar names. You can get a good idea of the value of your domain and some insight into how its value may mature in the future. I suppose there can be some exceptions to this tip if you’re Mr. Moneybags and find a name you are just sure is going to be a hit.

8. Don’t Sell Until it’s Ripe

Imagine you’re at the 1923 World Series and Babe Ruth tosses your baseball back to ya with his name jotted down in fresh black ink. A friend of a friend of your second cousin offers you $50 bucks for the ball a week later… you simply don’t sell your green bananas! The amount of people logging on to the internet and developing their own websites increases tremendously each year. If you think you’ve got a keeper, do just that.

9. Develop Relevant Content

Search Engines today are a key element to driving traffic to our names and essentially allow certain websites to be discovered. There are vast amounts of information and domain names that are essentially hidden to the world simply because webmasters do not take the steps to publish and promote quality information. If nothing else, setup a WordPress blog script on your domain name, get some quality web hosting and regularly publish relevant content to your domains.

10. Nurture Your Name

Incoming unique visitors, Google’s PageRank, backlinks and web reputability can add significant value to any domain. While publishing current events and related content to your domain name, manually submit your site to quality web directories. Social networks such as MyBlogLog, StumbleUpon and Bumpzee can also add reputation and send visitors to your name.

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About Mark Fulton

Mark is the Founder of DotSauce Magazine and a full time web developer, domain investor, SEO and online marketing professional residing in North Carolina, USA. Visit MarkFulton.com for information on freelance website development, SEO and consultation services.