A domain is name a word or phrase appended with an extension, typically .com though it could be others such as .net, .org. The extension, .com for instance, is known and a TLD (or Top Level Domain). These are all decided on by an organization known as ICANN. Aside from the normal .com and .nets, there are country specific ones as well as niche related ones. Whatever word or phrase you purchase, you will have to pick one or multiple extensions.
In short, when someone types in 'yourword'.com, their computer uses something called DNS (Domain Name System) to find the web server that holds the content for that domain (also knows as hosting). Think of it as a phone call with words, and DNS is the operator. You type in CNN.com, and your computer 'calls' an operator to ask who knows anything about that domain. The operator responds with an address to a computer that claimed it has the answer, then your computer asks that computer where the domain is hosted. That computer sends a number, called an IP address, and then your computer goes to that IP address and you see the website. Alternatively, you could have just typed in the IP address of the site and skipped all that, though there are millions of domain names registered, and a great deal of them all share the same IP address, so the site you want may not be the site that is the one default for that IP. When there are many domains on one IP, it is the web servers job to know what domain to show back to the customer based on the domain name they typed in.
The first step to hosting a web site is to get a domain name. This is a simple process. If the name you want is not taken, you just go to any of the hundred of resellers lik GoDaddy.com, type in the name, and click register. Registration can cost anywhere between $6-$35, depending on the registrar, and you will have to pay this annually to keep the domain. If you fail to pay, someone else can pay and become the new owner. The second step is to get hosting. Some registrars offer this as well, or you can pick any of hundreds of hosts. Prices vary greatly based on services, support and usage, so read the fine print. Note however that you do not need to host the domain at the place you regsistered it.
The biggest problem with finding a domain as stated above is its likely the one you want it taken. You can look at the 'Why all good domains are registered' link further down this page for more information as to why. In this case, using our services at My Domain Brokers, we may be able to broker a domain for you that is currently for sale and fits your need.
The latest stats at DomainTools.com state that there are currently 102,577,405 million registered .com domains, and a whopping 139,674,694 of the top 7 extensions registered. These numbers indicate domains are highly desirable, and play a very big part in your online presence. Since basically all the decent one or two word domains are already registered, finding one that fits your need can be difficult.
In addition to the people currently using a domain for a live site, there are also domainers that purchase a domain to park it, resell it, or save it as an investment. Parking is when a person purchases a domain, usually a domain that receives type in traffic, and places a site up with the intent of displaying ads or using it as a lead generation site. For more information on why the keep the domain as an investment check out the 'Why domains are priced the way they are section.
Your domain name should instill confidence and reinforce your brand. When your searching the internet for a car, or say someone hands you a business card, and you see their domain is 'selling-some-cars.biz', don't you question their reputation a bit? If their domain was something more professional and clean, 'usedcars.com' for instance, doesn't the domain presents a more reputable image of you?
In addition to making a good impression, a premium domain name can help generate free traffic and leads to your business. A domain name has the innate ability as serving as both a brand and an advertisement itself. Consider Diapers.com; 50% of all visitors to their website come from people typing the domain name into their browser. In diapers.com case, thats over 50 million people coming to the website for no advertising costs at all. While domains such as diapers.com are literally worth hundreds of thousands of dollars, there are still domains that fit your niche and are brand able that you can acquire for a reasonable cost.
Your location can also play a large part in your domain choice. If you are a local retailer and only cater to a small area, you may be able to acquire a domain name that is brand able and targets your area. For example, if you are a realty company in Scottsdale Arizona, you may not be able to get homesforsale.com, though scottsdalehomesforsale.com might be a suitable alternative.
Of the over 140 million domains currently registered, 74% of the domains are .com. If you are in the United States, .com is still the most desirable domain extension. In addition to making you look more reputable, it is the default extension people will type in when searching for your site or product. Studies have shown that when a user is told a site that was not a .com, when that user visited the site at a later time they first tried the .com extension, forgetting that it was something else. When you purchase a .net, .biz or similar domain you run the risk of losing your potential client to the owner of the .com version. Purchasing the .net and .org of your brand is recommended to protect your brand when possible, especially if your brand is a trademark.
Domain names have become not only an online brand or identity but virtual real estate. Once you purchase a domain name, you can own it indefinitely as long as you pay the meager annual renewal fees. Think about that…if you pick a quality domain it only costs you about 10 bucks a year to prevent anyone from ever having it. Quality domains are a finite resource, and much like real estate there are neighborhoods that are more desirable then others. One reason pricing domains is difficult is the domain is worth what someone is willing to pay. If the domain you are after is the only way to state your niche or product, and it has type in traffic and search results, you can expect to pay a premium for it. Remember though, like real estate, your purchase price is the majority of the expense. The domain should hold its value, and it may even increase in value over the years.
A good resource for seeing what domains are selling for is the Domain Name Journal year to date sales chart at Domain name Journal. Reviewing recent domain sales can give you some perspective on why some domains are asking for a premium price. If your a business, service or local club, focusing on a domain name with a local keyword in it may be a good way to get a quality domain for an affordable price.
Purchasing a premium domain at a premium price may seem a bit unreasonable at first, though it is actually a very sound investment. Consider how much advertising you will do for your business over a year. A recent media study from IE Small Business reports the major media costs as follows:
Newspapers – $1,300 per week for 2” x 2” ad
Television – $200,000 for one 30-second commercial (during prime-time)
Direct Mail - $1,500 for 1,000 4x6 postcards (includes postage)
Radio - $90 to $120 per week on a rotator (prices higher if time slots for ad are selective)
Magazines - $1,200 to $5,000 per month or per issue (depends on ad size and demographics)
Outdoor (billboard) - $3,000 per week
Online - $0.60 pay-per-click or $1,200 - $1,800 a month for aggressive campaigns
We have found the above rates to be conservative, and the generally only have a success rate of 2-3%. Based on the above, two or three magazine ads plus a direct mailer can set you back almost $20k, and you will be lucky if you get a few customers. Compare this to spending $20k on a premium domain that is directly related to your product or niche and drives direct, targeted traffic to your website 24 hours a day 7 days a week for years and years.