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The Value in Today’s Domain Names

08.20.2018 / Posted in Articles, Digital Marketing

The Internet has come a long way, baby.

Back in the days of the World Wide Web—a term that’s mostly retired, but we remember it well—people agonized over finding domain names that spelled out full words, had few nonletter characters, and on and on. And if someone had taken the name they wanted, they often paid for it—and dearly. In 2007, vacationrentals.com sold for $35 million. Just a few years later, in 2010, carinsurance.com went for $49.7 million.

Gulp.

Why pay so much? At the time, companies’ prospects heavily depended upon the ability of target audiences to easily type a URL into the browser address field—and get the right website the first time.

Banking on corporate desperation, crafty types gobbled up choice domain names—we called them squatters, back in the day—and held them so that they could charge a premium over the standard registration rates. Squatters netted thousands of dollars to turn over domain names that had no associated websites or web presences.

Today? Not so much.

How We Value Today’s Domains

The market today values domains less for their exact configurations of words and styling and more for their associated search-engine rankings and popularity. For a domain to sell for a premium—at least to a savvy buyer—it needs to have a long life on the web and great SEO. How does it get this secret sauce? It gains it through a lot of hard work and financial investment: Extensive content developed for and hosted on the domain over a sustained period—and plenty of advertising and marketing driving people toward it.

Domain squatters today can’t just squat—they’ve got to put in a little more elbow grease than that. Yet if they do, they can still net a pretty penny.

In short, domains are worth their search rankings. The days of paying a premium just for the exact words in the URL you want—with nothing else pumping up the value of that URL—are falling by the wayside. A domain with a less than ideally worded URL, yet with the right search rankings and visibility, is worth more than the perfectly worded URL with nothing behind it.

Why Has the Basis for Domain Valuations Changed?

Here’s the reason for the shift in value: Today, people rarely open a browser window and type a URL into the address field at the top. (Once upon a time, back in the nascent days of Google and the rest, they did.)

Today, people open browsers, click straight into the search-engine field on the page (if their cursors aren’t there already, prompting them to type), and tap in keywords related to what they seek to find, whether that’s a company name or a type of thing: Facebook, Amazon, Mexican restaurants near me, babysitters in Magnolia Grove, and so on.

The search engine then generates lists of results that match their keywords and they’re off to the races. (Yes: People do search for “Amazon” just to get a search engine to give them a link to https://www.amazon.com. Sigh.)

Search-engine companies are smart, see? They want people to use them, rather than go straight to an address, because the search rankings—and their associated advertising dollars—are how they get paid. They’ve designed their home pages and mobile apps to dump you straight into their search fields for a reason.

And in the process, they’ve decreased the importance of perfectly wordsmithed URLs for websites.

How to Assess Your Domain

Is this good news? Yes and no. Yes, you need to stress far less than you once did about having the perfect URL—one that’s short, easy to spell, has few numbers or nonalphabetical characters, and even, to some extent, that has the perfect domain extension (.com over, say, .net).

Yet it means you need to stress more than you once did about building great content and getting great exposure for your website. Adding value to your domain requires quality information that’s frequently updated and continually optimized for search engines to see and to read. Also? It includes paying for digital advertising. (Hat tip to the search engines, no?) And that’s not all. The list goes on.

More than ever, for people to find you, you need to have a fantastic ranking in search engines’ algorithms. And getting there? It’s not easy, fast, or cheap.

A little overwhelmed? Need help? Contact FrogDog today. (We’ve got you.)

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