Buying domain names

A buyer needs to exercise much thought before buying a domain name. The domain names that command the highest value are short, without hyphens, and possess a .com, .org or a .net extension. These were, and are, the most prized domain names. Their value is higher if they happen to be names of generic activity like music, media, hotel, guitar etc.

However, all these domain names were registered in the heady days of the net, often by speculators who resold them for large sums. Today, this activity has declined on the net, but great domain names are still hard to come by.

There are several points that must be kept in mind while selecting a domain name – either for registration or repurchase. A running company must select a domain name that is an extension of its brand name. For example, the domain of Pepsi should be Pepsi.com, and that of Boeing should be Boeing.com. This way it will generate the best synergies from its offline and online properties.

Individuals, who do not own a brick and mortar company and are setting up virtual companies, should select those domain names that best reflect the nature of their business. For instance, a company that wants to provide information about the use of air filters should have words like air filters or clean air in the domain name.

The second decision that a company needs to make is about the domain extension. The most popular domain name extension is still .com, followed by .net and .org. However, country codes command great respect in countries like China, UK, Germany and Japan. It makes more sense to have the country codes like .uk, .sg and .au if the registrant is living in England, Singapore or Australia.

The company then needs to select the domain name registrar. ICANN, which is the umbrella body of the Internet, has authorized over 50 registrars to register domain names. Most of these registrars are based in the US though a few are based in Europe and other parts of the world too.

The oldest registrar is Network Solutions, and it still charges $35 to register a domain name for a year. But other registrars like GoDaddy.com charge much lower rates. Most registrars have commissioned scores of resellers to register domain names for a commission. These resellers too offer highly lucrative registration rates – ranging from $7 to $12 per year.

The first choice of a company or individual should be an ICANN-accredited registrar whose names and addresses can be found at http://www.icann.org/registrars. These registrars can be used to register a domain name irrespective of where they are located or the prices they charge. Of course, it is always advisable not to waste money, and select a registrar whose rates are lowest on the net.

The same cannot be said of resellers. Their stakes are much lower, and they can close shop and vanish any day. There is also a fear that when this happens the individual or company will lose its registered name. This is not true. A name once registered is stored in an ICANN registry, and cannot be re-registered till it has lapsed. Also, all resellers are required to unbind the registered names once they decide to wind up. On unbinding, the names automatically return to the parent registrar.

The registrars are fiercely jealous of their possessions. They don’t want companies to transfer domain names to other registrars, because each domain name becomes a captive source of revenue. Often, registrars lock up registrant information, making it impossible to change domain name servers. This also happens with resellers who don’t provide proper administration windows. The domain name holder is therefore always at the mercy of these resellers.

That is why it is important to register the domain name with the bigger registrars. A good yardstick to establish the credibility of registrars is by checking the number of domains registered with them. A common complaint is that the big registrars do not service their customers well. This is not always true, because most of the administration commands are automated. However, there may be occasions when the smaller registrars will go the extra mile and offer more facilities to generate more business.

Buyers need to be more cautious when it comes to buying used names -- that is domain names that are put up for resale. One domain name that must be avoided like plague is a domain name that has been blacklisted by search engines. All buyers must remember that almost eight out of 10 new visitors are search engine referrals.

A domain name that does not figure on major search engines – despite having been used for years – is an example of such a blacklisted domain name. It must not be bought, because search engines blacklist those domain names that try to spam them or indulge in other unfair means to boost their search engine rankings. A good place to check the antecedents of rogue domains is the Wayback engine.

Another point that must be kept in mind while buying a used domain name is the name itself. It should be short, easy to recall and associated with the buyer’s business. It should be listed on the main search engines, ideally among the top 20, and on search directories like Yahoo. This will save the buyer much difficulty in driving the initial traffic.

There are several sites that provide names of used domain names. Some of these sites are free like DirectNIC or DomainDuck. There are also several subscription sites like DomainsBot and FallenDomains that provide a list of domain names. Pool.com and Snapback put up a list of hot domain names, and go all out to acquire them for the buyer as and when they lapse -- for a fee.

E-Bay is another place to try your luck. Several resellers list domain names on e-bay for auction. The other important domain name auction site is GreatDomains.com.

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