One can compare domain name extensions (eg. .Com, .Net, .TV, .Org, .Tips, etc) to neighborhoods.
Many people prefer to live and/or operate their businesses in well established neighborhoods. Some people choose to live in new subdivisions. Some businesses chose to operate out of major metropolitan areas and some out of suburban neighborhoods. There is no right or wrong and people will make their own choices based on their own personal preferences and financial considerations.
Some established neighborhoods will decline over time, while some will gentrify. Some subdivisions will become more desirable over time, while some will never catch on. But the one constant in this sea of change, is that the best of the best; the Park Avenue on the Upper East Side, the Beverly Hills North of Sunset, the Mayfair off of Hyde Park, the beach front property on Malibu Beach will always be the most desirable, no matter how many homes are built in the outskirts, regardless of which gentrified neighborhood is the sweetheart of the hip and newly famous, at any given moment… That will not change .Com represents these blue chip neighborhoods where everyone wants to live, but not everyone can afford the cost of entry.
This is actually a good thing. By having ultra exclusive neighborhoods, with a very high cost of entry, a hierarchy is established. In a capitalistic society, it can serve as a great motivator to do all we can do, and be all we can be, with the hope of someday achieving our goals. From a business standpoint, it can be very empowering to grow your business to a point where you can afford to move from a Greenwich Village basement to a Madison Avenue showroom. People who shop on Madison Avenue have simple taste… only the best. If your business has secured a spot there, it’s clear to the world that you are doing something, or a lot of things, right.
Much in the same way that a business achieves credibility and authority when they are located in a most prestigious neighborhood, they achieve the same net result with a most prestigious online address. Let’s look at the Manicure.com brand. As a consumer Manicure.com is the intuitive online brand for manicure and nail care. There are a plethora of prefixes or suffixes you can place before of after the word manicure, but there’s not a single combination which will ever come close to approaching the trustability, desirability or intuitiveness of a Manicure.com. The same holds true for the Gin.com brand. It is at the very top of the hierarchy, the very best online location you could ever hope for, if you are a distiller or distributor of gin. You can gain the trust of your customers and the envy of your competitors, around the world, for around the same investment as a decent two bedroom condo in New York.
As a domain name broker, I find it frustrating at times, when I present a category killer domain name, to a most ideal suitor, and they balk at a million dollar plus price tag. Many companies pay hundreds of thousands of dollars every year for PPC traffic, without hesitation. Hundreds of thousands of dollars are spent each year on promotional displays, which are often disposed of after just a few months. Millions are spent on television ads, print, and billboards adverts without reservation. But when it comes to a major company INVESTING one million dollars to control the intuitive online brand, which perfectly describes what they do, far too often, they have no interest.
You may have noticed that every advertising medium which I mentioned prior to the domain name investment, were capital expenditures. The domain name is the only advertising medium which shows up on your balance sheet as an asset.
The one time investment in that most desirable online address pays dividends, year after year, decade after decade. If you analyze a $1mm domain name investment over just 10 years, it comes out to just under $275 per day. That sure sounds like a lot of bang for the buck compared to other advertising mediums … doesn’t it? Well it even gets better. Your one word, dot-com domain name and online address is a hard asset, and a rare one at that. Just like the Malibu beachfront property or the house in Beverly Hills, there’s a great likelihood it will hold it’s value and a greater likelihood it will increase in value over time.
What is quite discouraging is that a very meaningful percentage of American businesses are miles behind their counterparts in Europe and Asia when it comes to securing real estate in the best online neighborhoods, while it’s still cheap. Around 85% of my domain name transactions, involve buyers in Asia or Europe. These domain names represent leverage. Those industrious few who control the one-word, dot-coms which define their business gain leverage, while their competitors lose leverage.
The domain name Whisky.com sold for $3.1MM to a distilled beverage distributor operating out of Germany. From what I understand, the Buyer’s are extremely pleased with their purchase. Vodka sold for $3MM to the number-one Russian vodka brand globally. I am currently representing the Gin.com brand. There are a number of distillers competing for the same business… only one of them can own Gin.com. The Seller’s price expectation is quite fair for this most prestigious address. While the price of entry is high, the fortunate suitor who appreciates its value, will likely never regret their investment in this ultra premium property.
Ownership of an intuitive one word, dot-com domain name, which perfectly describes your industry, is the most exceptionally powerful, cost effective and under appreciated opportunity in the marketing, advertising and branding industries. It will increase your global reach, customer loyalty, recognition, advertising retention and online trust. It will offer your business a distinct and sustainable competitive advantage over your competition. It will define you as the online leader in your industry. It will be a memorable and recognizable brand, before you have invested a penny in promoting it, and it is very likely to appreciate over time.
So if you are a CEO or Director of Marketing at a major corporation, I urge you to consider the following. When a fellow like me reaches out to you with an opportunity to acquire the one word, dot-com domain name which perfectly describes what you do, for $500k, $1MM or $3MM, please don’t take offense. Please understand that, at just a little over twenty years young, the Internet is still in it’s infancy. Those of us who have been in this business for over twenty years have a good understanding of the dynamics and the opportunities available in our industry. Those outside of our industry might not get it yet… and that’s ok.
It’s no accident that A&W Concentrate Company owns RootBeer.com, Amazon owns Clothing.com, AutoByTel owns Car.com, Bank of America owns Loans.com, Bayer owns Asprin.com, Bissell owns Steamer.com, BumbleBee owns Tuna.com or that Campbell’s owns Soups.com. Many of these major corporations spent millions of dollars to secure the one-word, dot-com brands which perfectly describe their business. The directors of these companies are certainly not naive of frivolous… They are brilliant, they are ahead of the curve and they are maintaining and expanding their leadership positions online.
At today’s price levels super-premium one-word dot-com domain names are the most under-valued hard assets and the most effective online marketing tools available. Think of the premium domain name broker who contacts you as your independent domain name consultant. We are here to help. Our goal is not to take your money, it’s to make you money. Seeing our clients succeed is the most rewarding part of our business.
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