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Why Domain Values will Keep Going Up

Thursday, May 15, 2008
By admin

Virtual real Estste

Domains have now been known as valuable online real estate for quite some time, and not without reason. Going online is now seen as essential for any kind of commercial organization, which means putting up a website, and of course every website needs a domain name. So, domains have become virtual assets, without them it is impossible to have an online existence. What’s more, the value of domains will continue to go up and this is due to a variety of factors.

Domains are an asset: Domain names afford a business continuous marketing and visibility, heightened credibility with customers, protection for the brand name and image, and most importantly, acquisition of more traffic, which could mean an increase in revenue. This means domains are corporate assets, and there are always companies on the market trying to buy up suitable domains.

If an individual owns a domain which could prove valuable to a commercial organization, or has worked to establish a considerable stream of traffic for a domain, such domains are also assets. And these assets will continue to appreciate over time, because the demand for such a domain name would always be strong.

Domain extensions: The .com domains are now quite scarce, especially for the business sector. Because most of the premium ones have already been snapped up, and are not likely to come on the market soon because their owners are established companies with well-known brand names. Since the demand for a top .com domain name is strong, its value will continue to appreciate in exponential terms. The value for mid-level domains will also continue to grow, because an increasing number of small businesses are now setting up shop, taking advantage of the connectivity provided by the internet.

The unavailability of .com domain names will keep pushing up the demand for other extensions such as .net, or.biz. More and more companies and firms, especially in the small and medium business sector, are now opting for extensions other than .com, because some of these extensions are to be found at 10% of the price of their .com equivalent. This shows a trend where the values of domain names with extensions like .net, .org, .biz and many others is likely to rise over time.

Emerging fields and unique domains: Domains are valuable because they are unique: each has keywords which lead to a unique set of information. The internet has given rise to a whole set of new kinds of businesses related to services, outsourcing, networking communities, searches and sales in the past few years, and this is likely to continue. While the demand for generic keywords will be strong, there would also be a demand for unique domains, which contain keywords that address new kinds of businesses and services as they emerge.

Domains and online advertising: Domain values will also increase with the exponential rise in online advertising. An increasing number of companies find that placing their advertisements online is a great way to draw customers, because most of their potential customers spend a large part of their time online. These advertisements are placed on websites with relevant domain names which attract high traffic, and the domain owners get paid for clicks on the advertisements.

More and more domain owners are monetizing their domains through this pay-per-click advertising which has been revolutionized by Google, and so the requirements for domain names with relevant keywords is going up on a steep curve. Online advertising is sure to grow in a big way in the coming years and this will indirectly push up the value of domains.

Domains for individual entrepreneurship and speculation: A major driver for the growth in value for domains is also going to be the eventual realization on the part of netizens that jobs, transactions and businesses are slowly going online. In fact, a day might come when very few businesses would function completely offline, and working from home on a freelance basis will become a good option. Having a domain with relatively high traffic would be a great way to advertise the skills of a consultant, writer, actor, photographer, agent or any other type of freelance entrepreneur. This drives up demand for domains, and hence spikes their value.

Not only that, some individuals have already awakened to the fact that domain names can be a great investment, and are buying and selling domains to make quick bucks. This market for speculation is driving up demand and hence the value of domains.

Domains and new internet users: Last and most important, there is an explosion of new internet users, especially from populous Asian countries like China and India, where a lot of the development is based on internet technology. This will send the values of domains on an upward spiral, and the saturation point is quite far away at this moment in time because of the sheer numbers involved.

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2 Comments »

  1. by Domain Marvelous |  November 28, 2008, 11:03 am  

    I would like to comment further on this point: “Domain extensions”. If .com is the undisputed king of domains, as widely claimed, scarcity of one or two word .com name will push up the value of three or four word domain name. The rise in value of other TLD’s might be very little, but any .com domain might just pull in a big sum of money if monetized.

  2. by Chris Desouza |  January 2, 2009, 12:04 am  

    All this talk about domain name valuation is fine. I buy it.

    But the real scenario is played out where all the devils hang out day in and day out - In the forums.

    It is a nice play to convince end users.

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