Value of generic domains questioned

Premium generic domain names may be losing their appeal after an auction failed to bring in large sums for many that would once have been deemed highly valuable.

An auction of names including cameras.com, auction.com, elections.com, babies.net and hell.com late in October saw some names fail to reach their reserve price while others went to modest bids. Expectations of higher prices were fuelled by the $12m sale of sex.com earlier this year.

Cameras.com sold for $1.5m, flowers.mobi $200,000 and mortgages.net gleaned $149,000 but hell.com failed to meet its reserve price at a sale organised by Moniker, a domain registrar, in Florida.

Robert Birkner, director of global domain name registrations at Hostway, attended the event and said many buyers were looking for high-traffic domains that could generate short-term resale value.

“People were looking for domains with high volumes of unique visitors and I don’t think [building brands] had anything to do with it. BMW will never buy cars.com and YouTube has just sold to Google - who would have thought of typing that in?”

Some experts said that domain names have become less important given the rise of search-related terms, and blogger Greg Sterling noted that companies with strong URLs frequently lose out to sites with less obvious names.

“Whether or not those domains justify those kinds of prices depends entirely on execution,” he wrote. “Some of the most intuitive domains are also-rans in their respective spheres. Awkwardly named shopping sites NexTag and PriceGrabber considerably outperform the much stronger Shop.com.”

Lesley Cowley, chief executive of domain name registry Nominet, said, “The days of these domains being over-hyped are gone and people are being more selective about what they shell out good money for, but I’ve seen several £10,000-plus sales recently. People said Google AdWords would make the names irrelevant but that’s not the case. On the other hand, it’s no good paying a vast amount for a name if you have no business plan.”

One domain name developer believes names that use symbols could appeal. Symbol-based domains are short, easily memorable but require new browsers such as Internet Explorer 7 or Firefox 2 with support for International Domain Names.

“I knew that letter and number-based domain names were common but after scrutinising my UK keyboard, and those of every other country, I realised there was one other common element of a keyboard,” said domain name developer Richard Haigh, who owns £.com.

Danny Sullivan, Editor-In-Chief, Search Engine Watch, added, “My gut is that good, single generic names will continue to be popular for those looking to brand sites with a name. If you sell camera, having cameras.com would seem a great way to help capture visitors even if your offline brand name is different.”