Why domain names can be a good investment!
If you know the value of the market you are invested in and have clear creative and well researched ideas then you will realize how lucrative domain name investment can be. We have seen a number of generic finance related domain names being sold and have recently uncovered a £14k investment made by a private buyer in debt consolidation domain names.
The Value of Finance and Debt Related Domain Names
It’s true that debt consolidation is one of the hottest terms especially in respect of PPC’s (Pay Per Click) and we believe the buyer saw the huge potential in these domains getting free traffic from people guessing the domains when they are looking for debt consolidation or debt free i.e. people that are looking for debt consolidation will enter debtconsolidation.co.uk in the toolbar rather than searching for debt consolidation on a search engine. Both debt consolidation and debt free are amongst the most searched for terms on the internet and you would therefore expect a percentage of people looking for these terms to guess the domain. Many domain investors use the overture search rank as a key to the potential value of a generic domain. i.e. if a lot of people search for a term then a smaller proportion will second-guess what the domain name will be.
A good generic domain name can also help with search engine placement. Further research shows debtconsolidation.co.uk used to be at the top of google for debt consolidation but someone must have failed to renew! www.debtconsolidation.co.uk is already on the 1st page of msn.co.uk for debt consolidation out of 17,265,739 results. Debt Consolidation is a very hard term to get to the top of especially only after website was recently launched. (Website is still temporary!). So I believe domain name has played a big part in it. This seems especially true for msn.com search engine. Try searching for debt consolidation loans on msn and look at all the domains that are top! Only 1 in the Top 10 doesn’t have debt consolidation loan in the domain name!! That’s the beauty and the value of a generic domain!
Valuing a Domain Name
This tends to be another complicated area for domain names however it is always dependent on the party initiating contact i.e. if a buyer contacts you indicating interest on one of the names you own then you have control of pricing. If it’s the other way round then they have control unless if you have validated data that proves worth of the domain. There has been groundbreaking innovative tools such as estibot that will breakdown domain Value, letter combination, Domain Authority and the most crucial of them all, Traffic. There’s other metrics involved as well which are not as crucial. When you are valuing a domain for a business as well as looking at how much people will pay for a PPC it is also worth looking at how much they will pay for a successful application. This is really where the true value can be seen.
We are therefore confident that generic domain names (that are business related) are definitely good investments for the future and it’s wise to buy before others realize it too! We will definitely be looking for new ones that come available.
I think some of the bigger companies aren’t on the same page yet. It is too difficult to get approval for a purchase off someone who doesn’t understand the potential value. Often they also outsource their internet advertising so there is no one in the business that understands the internet.
So to summarize a domain name can have considerable value if it is able to generic free relevant traffic to your website. Also as the internet grows and users become more sophisticated in how they search then we would expect the value of domain names to increase further.