DomainBinge

Entrepreneurs have always struggled with the branding of new companies. The finality associated with picking a name stifles a lot of people, and the difficult trademark issues that can pop up often send the whole thing back to the starting gate. It’s no wonder entrepreneurs cringe when thinking about picking names.

Lately, though, the priorities in this critical early stage decision have changed dramatically, which should lead to easier branding strategies for entrepreneurs.

I believe that every new blog should include a definitional post - one that clearly defines the purpose and/or goals of the blog - early in its lifetime. Think of it as a Blog Mission Statement.

I’ve been honing the ‘angle’ for DomainBinge over the last several weeks, and now feel comfortable enough with the blog’s purpose to offer its definitional post.

Here’s an interesting domain anecdote from the weekend.

My wife had referred a business contact to my sister last week. Over the weekend, my sister was at the house talking to my wife about the referral.

“I sent her two e-mails…but both came back as undeliverable.”

So my wife pulled up the contact’s business card, looked it over and noticed that her e-mail address included the .biz gTLD. She pointed that out to my sister:

“Did you use .biz or .com?”

My sister’s response was precious:

“What the heck is .biz?”

Take a gander at the sorted final results of Moniker’s live domain auction from this week’s NYC TRAFFIC conference. Do you need any more evidence of the investment potential for great domain names? I didn’t think so.

As an aside, DomainNameWire live blogged the auction from the conference.  Need any more evidence of the power of blogging?  I didn’t think so.

According to Bob Parsons at GoDaddy, the practices of domain tasting and domain kiting are alive and well.

Check out these staggering statistics:

“In February 2007, 55.1 million domain names were registered. Of those, 51.5 million were canceled and refunded just before the 5 day grace period expired and only 3.6 million domain names were actually kept.”

That’s a 6.5% retention rate, folks.  Alive and well, indeed.

The great race for generic domain names is on and crazy money is being paid for such domains in aftermarket sales. Need examples? Check the list.

The race is producing sale amounts that can be quite discouraging for people trying to “break in” to the domain name industry. Sure I can fork out a couple grand for a domain, but can I muster up hundreds of thousands of dollars on a speculative play? Do I want to?

So what’s a beginner to do?

This made me chuckle a bit. The guys making money by selling text links at market price are a tad upset about the market-driven increases in the price of domain names.

Beyond the irony, the post offers a nice case study of the current domain name environment. Picking a domain is an important part of getting a new company or new project off the ground. The smart folks in the world pick smart domains, assign a value to the domain, and determine if they can buy it within the confines of their budget. This reality ensures that market prices for good and great domains will continue to increase.

Some domains will always have intrinsic value. Think news.com, suppplies.com, and trucks.com. These are the ultra-generics - subjects that are not overly sensitive to the constantly shifting focus of our collective mind. People are always looking for news. Purchasing managers are always thinking about supplies. And construction workers are always thinking about trucks (well, maybe not always).

The value of “hot topic” domains, in contrast, shifts as the focus of the collective mind shifts. Think WorldSeries.com, 2008election.com, and even parishiltonjailpics.com. Determining the value of these domains is a bit trickier than others because it requires a timing component and an assessment of the sustainability of the underlying topic.

The Sage has authored a guest post on Frank Schilling’s Seven Mile that will inspire everyone just starting to invest in domain names, or thinking about doing so.

One (of many) money quotes:

“Well, the opportunity is still there as it was seven years ago. I just talked to a guy who sold his domain name for $1.5M. He paid $35k for it two years ago. However, are you prepared to take out a loan, use your savings, mortgage your house, borrow money from your friends and family, max out all your credit cards, work 16 hour days, read a lot of books, blogs, forums and risk everything to build a business?”

Typosquatting - buying domains based on a misspelling of a domain name (e.g., gogole.com) - is fraught with legal challenges.

But what about reverse-typosquatting?  Here, a company bases its tradename (and probably registers the mark) on a misspelling of a generic term.  Think of Flickr and Flicker (and of several other popular web 2.0 sites and their developer’s penchant for dropping vowels).

The presumably innocent owner of the generic domain can be flooded with typo traffic as non-savvy web users (those not in on the dropped vowel branding strategy) go directly to the generic site.  This might be a desired result if the generic owner monetizes his site with advertising, but what if they were hosting a site that was simply the “web home” of a business (say, a firebox manufacturer)?