Point/Counterpoint: Will Search Decrease Domain Name Values Over Time?
A friend of mine who works on a search engine startup was curious to hear about my interest in domain investing. After learning that I made substantial investments in the field, he smiled as he asked, “won’t domain names decrease in value over time as web users rely more on search and less on type in?” He continued to describe a future world where all items were bought through a shopping search engine and no one cared who the ultimate source of the merchandise was (nor would anyone care about their domain name) as long as the search engine considered the site to be reputable and the item was cheap.
I tried countering by conceding that type-in traffic may lessen over time, but the value of having a brand name will only grow. Buyers might not care where they get their toothbrushes or socks from and they might be happy to rely entirely on a search engine for those purchases. However, when navigating to designer watches, boots, cars, news, or a host of other types of sites, the user may care very much about the unique brand that he/she is visiting. In terms of memorability and branding domain names are and will always be second to none. Moreover, many search engine algorithms rank premium generic domains higher in the SERPS.
He was not sold on my reasoning, and I would welcome any additional retorts.
Major Stats Changes on Google Adwords Keyword Tool
Russia Abandons Dutch Auction Format for .рф Release
دافزا.امارات DAFZA Launches IDN.IDN Site
Over $20,000 in IDN Sales at Domainvermarkter Forum
You Know You Are A Domainer When . . .
I think he has a good point. I can’t see a consumer caring whether of not they buy a designer watch from DesignerWatches.come or from IntegrityJewelery.com. In the end as long as it is not some crazy domain like lawkrv83jvkwr-cr.ru I don’t think the purchaser of the watch will care. It is true it will take less capitol to brand DesignerWatches.com then it will take to brand IntegrityJewelery.com but that seems to be the only benefit (apart from search engine optimization) that I really see with product domains.
Now service domains and geo domains are another story, but category killer product domains I feel are going to become less and less important as time goes by. Sure Candy.com will always be worth something but it was not ever worth 3million and will only be worth 3 million in the future if inflation takes a big bite and money looses value. Rick should be very happy that he convinced a company to pay that much but something tells me that they will not be around all that much longer if they financed the domain because the benefit that they are getting from the domain will nowhere near make a payment on 3million. Melville Candy Co. just might go out of business and that will be a huge blow to the domain industry and it will have been dealt by the greed (or fortune) of Rick Schwartz.
Wow….some interesting points from you and your friend as well as from Troy in his post above. I think all three of you guys are right.
Regarding the future of domains I think it will really depend on who/how and if we shape the future with great domains. In the past, meaning years ago, it was so easy to predict the future on the Net. Now there are so many new products and applications being released that can have so many broad implications for both domains and search engines, it is at the point of pure conjecture.
Maybe domains will be crushed by all these new apps. Maybe they will benefit. Is it faster to go to Rugs.com and run an app there that scans multiple sites for the best deal on rugs, or would Google be better at that? It’s still more steps to use Google. You have to type in google.com, then type in “rugs”, hit search or start the app, etc…. With Rugs.com you just go right to the site.
Anyhow, my point is there are so many damn moving parts to the Internet now….who the hell really knows. I’ve been at this for almost 20 years in the domain biz and if I can’t tell you I don’t know who can. Never trust a guru anyhow is what I say….they are usually full of it.
Investing in domains is still investing in the Wild West to some degree. Time will tell.
Investing into domain names is the way to go.
As time passes the .com ‘ s will increase in value as the availability is limited.
Search engines still need keywords and domain names with good keywords are a great investment.
I already buy many domains using a “shopping search engine” (upname.com) and indeed I don’t care much who the ultimate seller is (as long as I recognize the name)
First of all, none of us have the ability to see into the future, so we have to use industry research, the core metrics of value and strategy, and plain and simple elementary common business sense.
Google does $5 BILLION a quarter. Yahoo and Bing are competing strong, trying to keep up and take market share. REGARDLESS of how the search-engine race turns out…the blueprint stays the same.
It is a complete, concrete, and absolute FACT search-engines supply generic and “exact match” domain names advantages.
I do agree, type-in-traffic (direct-navigation) will decrease over time as more people are seeking “multiple options” per query, but that is only one small piece to the puzzle.
If a pure generic, a category-defining “.com” domain name use to get 10,000 FREE leads per month, and that number evaporates to 1,000 per month, or even ZERO for the sake of argument, the domain (digital asset) is still “the” brand. So many “tech-heads” and naive newbies (especially small business owners) are CLUELESS to the metrics of value and strategy on the Internet.
Years ago, if you wanted to open up a business, and your desired name was taken, you’d simple just select another business name. The Internet has changed this strategy FOREVER. Every single industry/vertical/niche on the planet has competition, especially for global product distribution and now, HYPER-LOCAL (loca) businesses. With that being said, companies are very LITERALLY closing their doors because they do NOT have a competitive advantage in the marketplace. The Internet has touched, altered, and negatively (in some way) affected “business” in every corner of the globe.
Regardless if I was a Minnesota Attorney, or A real estate broker in Las Vegas, or a Atlanta Plumber I would invest in generic domains, PLURAL. Those who own the generic, intuitive “Internet brands” have soooo many advantages, people just don’t understand it. It’s really that simple.
Ps:
MinnesotaAttorney.com – $10,200 (SOLD)
LasVegasRealEstate.com – $53,611 (SOLD)
AtlantaPlumbers.com – $13,125 (SOLD)
Moving forward, I guess my question becomes…
“How…in 2010…do people/businesses NOT understand the value of generic domain names?” Would you seriously rather be “Rick’s VIP Limo Services, LLC” or “ChicagoLimo.com, LLC” with an assumed name “Chicago Limo”…? (SOLD for $10,450)
The advantages:
1. The brand – “it is what it is”
2. The mindshare – “no guessing involved”
3. TRUST – “sooo crucial to gaining traction”
4. VALUE – “generic = support”
5. Memorability – “it is what it is”
6. SEO – “4 weeks, PR1 – OR NOT – YOUR CHOICE”
7. Type-In-Traffic – “FREE RED HOT LEADS”
8. Competitive advantage – “I am THE industry – you aren’t”
9. Internet Real Estate – “appreciating ASSET/Investment”
10. Cool – “Yep – it’s cool – non-generic’s aren’t, period”
…and the list goes on and on…
NY
“If you have a great biz idea and don’t want type in, any reg fee domain that is catchy will do.”
That’s a false dilemma, there are other reasons to buy keyword domains for development beyond type-in traffic. There are search engine, branding and consumer perception benefits that come with great domains.
There are certainly some businesses I would start with a ‘Web 2.0′ name, but for most I would want the category defining domain if I could possibly get it.
I have been investing in domain names- both generic and keyword for the past 11 years. Today I have hundreds, it’s an infectious business that borders on madness and addiction at times for sure.
What is needed is a reliable valuation of domain names. For Example, what does one charge for a website url like “videoseo.com” knowing full well this domain name will knock the competition down nicely if properly optimized- just as video seo is taking off … Any suggestions for a reputable valuation/auction house is appreciated)
Hello. Great job, if I wasn’t so busy with my school work I read your full site. Thanks!
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In a current economy when hundreds of thousands people loose their jobs, and investing in neither real estate nor public stock pays off, investing in a web name, domain is a fantastic opportunity.