Generic domains - those that generally describe a class of products or services - are typically more valuable than those directed to a particular company or product name (brand-oriented domains). The reason is simple - web surfers typically use generic terms when searching for content (and when they’re searching for a particular company or product name or brand, the game of converting them to your company/product is entirely different than just introducing yourself).

Location-based generic terms, what I’ve come to call “localized generic domains,” are one of the hottest areas in the domain industry right now. Think ClevelandPCHelp, ToledoMechanics, and ColumbusMotorcycles. Why the sudden interest in these seemingly narrow generics? First, the search engines (Google in particular) have repeatedly stressed their interest in further development of “localized search,” which aims to tailor results for a user’s search to his/her current location. Search for “motorcycle dealers” from your home in Toledo, and you’re more likely to see ToledoMotorcycles.com near the top of the list than BobsCyclesofScottsdale.com.

But the value of localized generic domains goes beyond search. I like to think of these little gems as ‘instabrands.’ Imagine you’re a an entrepreneur opening a relatively modest local business…say, a tree care company in Toledo, OH. It’s 2007, so you absolutely must have a web presence, right? That’s a given. So you head on over to GoDaddy and start hunting for a great domain name.

Here’s where the savvy and not-so-savvy entrepreneurs part ways. The not-so will immediately think of (and probably be able to register) a unique domain based on his chosen company domain. Think “MadHatterTreeService.com.” He’ll rejoice in the fact that he was able to get the domain for 8 bucks and happily move on to setting up his website. What he won’t realize - probably for several years - is that the use of that brand-oriented domain will greatly increase the work he needs to do to educate his customers - and potential customers - about his services, and indeed about his existence.

The savvy entrepreneur, however, gladly seeks out a localized generic domain that accurately describes his business and the geographic area in which he operates. ToledoTreeCare.com is born and he’ll probably be rewarded with high localized search results (think of all those people in norther Ohio searching for information on the Emerald Ash Borer that has given us fits over the last few years). This doesn’t mean that he has to forego a brand-oriented domain. Nope, this smart guy will launch two or more websites when he opens his business, using the localized generic domain to lead the way and drive traffic to his brand-oriented domain(s).

If you don’t yet see it, here’s the domainer’s angle in this story: the savvy entrepreneur will likely be glad to pay a premium for that localized generic domain. He gets it, and he’ll pay for it.