I admit it, I missed out on hundreds of thousands of dollars in the late 90’s because I felt brands were more important that generic domains. I was very wrong. It’s a simple concept. People have to learn brands but already know the generic or vocabulary words. For the first 15 years of the Internet people used the toolbar and typed away. But as all things do, times have changed. Google has taken over the toolbar and more and more users are using search engines to navigate rather than roll the dice and typing in.
The following is my opinion, supported neither by data or specific facts. It’s merely a culmination of watching domain sales reports and auction results at Namejet and Godaddy and seeing obvious changes in prices. Generics continue to sell very well but many are being used for a different purpose than in the past. They are being used as brands rather than to sell the item the word represents. The Kayak.com approach. Brands that have nothing to do with original purpose of the word but rather because they are memorable. They are not being used to sell the item represented by the domain but being used because you’ll remember the word. Words that can easily become a brand without being too defining are in high demand. One word and two word domains that easy to remember are being snapped up at ever increasing prices.
What’s starting to cool are the product specific domains. BikeBrakes.com type names that can only be used for one purpose. To sell or represent that item. Kayak.com obviously can be branded for other uses but KayakPaddles.com is limiting. When someone asks me the value of a domain I often say it has lower value because it is limiting. Even if the limit can still be very profitable, it is still limiting. Limiting because the amount of buyers for that domain is reduced to the people that want to be in that business. Limiting because people aren’t typing in product names anymore. Limiting because Google is slowly giving away special treatments for exact match. A name that is neutral has no limit. It’s why names like Shout.com are so valuable. It means nothing so it can mean anything.
When I value a domain I look at two key components. How much money can be made with that domain? What will they sell, how high a priced item is it, and will the domain improve the sales? Second, how memorable is the word? Is it short, and is the domain limiting? It’s a whole other can of worms if its not a dot com because you will automatically be fighting the dot com from the beginning. You want to build brands and you don’t want to start from below ground level. Dot com is ground level.
In short. Generics are still the way to go but I think it can be described better than using the word generic. Domains that are one word and easily said, spelled, and memorized have always had value. But now there is a subset of names that can be branded into any type of business that are even more desirable. More desirable because the parking money is gone and the emphasis has gone back into the potential branding of the domain.
Very astute and I strongly agree with you here. SalesForce.com comes to mind as one of the more generic-cum-brand positioned names. Really like that. Yesterday Elliot posted a list of domains and to me, Monument.com was the best because it rep’d the very thing you describe – a generic term with the potential to be cross associated with a ton of different things. Noone needs to be reminded of that what they are doing online can be described in the most generic terms. Giving it a little branding edge has to be a good thing.
I think that over the next several years perfect brandables like Kayak.com and Shout.com will have the biggest percentage price increases. There are only one or two hundred short words that sound really cool, have no spelling issues, and that people can easily build emotional connection with.
The current value of a name like that seems to be mid 6 figures. Increasing demand and shrinking supply should push prices much higher in the future. Salesforce and Quidsi have already accumulated over a dozen names like that each. A hundred companies buying just one/two domains like that will bring supply to literal zero. Then we will see how much it will cost to buy Mint.com quality name.
How about Amazon and Yahoo…..been around since almost the beginning using generic words for secondary meanings. When a generic word is used in this context and used as a trademark it is said to “have taken on secondary meaning” which gives it stron TM rights because of the uniqueness in which it is used.
One thing I think you are overlooking is that BikeBrakes.com will have a much better conversion rate to sales than Bike.com could ever have, all things being equal on the site, promotion, etc… This is why long-tail domains get both higher CTR and higher RPC in parking. It is more relevant and thus more likely to lead to sales.
You are limited though as you said, but if you can make a million dollars selling bike brakes, who cares about the rest? 🙂
What you’re referring to in trademark parlance is what’s called an ‘arbitrary’ mark (see http://goo.gl/UObGG ).
Classic example is ‘Apple’ for computers — one having nothing (inherently) to do with the other.
And you’re right, that these do have increasing value.
Quote: This is why long-tail domains get both higher CTR and higher RPC in parking.
Did not write that right at all. 🙂 I meant, because of the high relevancy the CTR is higher, and because of the same reason the conversions to sales are greater.
Agree with the overall message but don’t agree that two-word generics can’t be brandable and valuable also. OrangeSoda.com has nothing to do with soda or orange. They are an online marketing company. That’s just one example.
Tony,
I completely agree with you. By no means did I mean to say that two word dot coms weren’t great for branding. They have certainly had a big increase in value over the last 2 years. Color Noun dot com are great assets to have.
Nice to see you agreeing with me Shane.
I agree that generic .com’s are the only way to go. All others are a complete waste of time, resources and money. I believe that all new gtld’s will all eventually fail like .mobi, .aero and .cat.
Worth noting that the latest SEDO sales report showed 8-character domains as the character length with the most sales.
point in hand, keep.ca
There are some one word .com like Lawsuits.com that will always maintain their value given that they can only be branded in one sector of industry. Lawsuits cannot be used in any other sector than law, that is clear. They are asking $300,000 for this name (name only, no business or website) and it will only increase in price. However with most other one word .com, I see your point.
Very well written article and one of the best to pay attention to for those new to the business.
Moped.com did the exact same thing, they don’t sell mopeds. They are a tech company focusing on messaging.