Advice on Buying Geographic Domain Names

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As the prices of geographic .com domain names continue to rise, I would like to give some advice to people who are contemplating a geographic domain name purchase. This advice is based on my personal experience, and it should be noted that I do not have any great success stories as of yet, although I am hoping that Lowell.com and Salinas.com will both be developed successfully.
When I am looking to acquire a city .com domain name, I think about the following qualitative and quantitative factors to determine an offer range and value:

  • Population of city
  • Number of businesses in city
  • Is it a popular tourist destination
  • Name recognition of the city
  • Number of hotels in the city

All of these factors are important in determining the value of a geographic domain name. I believe it will be easier to build and monetize a local city .com name than it would be for a regional name (like a county). The number of businesses is probably the most significant thing I look at because business advertising is what will drive revenue. If one city has 5,000 businesses and another has 500, I would almost automatically pay much more for the city with more businesses, as you would conceivably need 10% of the businesses to pay for their listings in the large city if 100% of the businesses advertised in the smaller city.
A city with considerable tourism is also something of interest, as tourism is a huge revenue generator. People want to research their vacation spot prior to arrival, and they frequently look online. Many will type in the city name with a .com and others will find the name through strong search engine optimization. Having the city .com name is very helpful with SEO. Businesses understand some of this, and they want to advertise where the tourists will be looking. Johnny’s Beachside Bar wants visitors to look forward to drinking mango margaritas on his waterfront deck, so he is happy to pay for ad placement if tourists will remember to visit his place rather than the place down the block that doesn’t advertise. This creates brand recognition for his restaurant.
I also search for the number of hotels in a city before making an offer. The more hotels, the better, as you can work with an affiliate site for better revenue sharing deals. Larger cities with more hotels are great because the affiliate sites will frequently advertise special deals specifically for your website – helping to promote stickiness and branding. I love seeing “Get a great Lowell.com rate when you book your reservation now.”
Because geographic domain names are in high demand now, the minute one comes up for sale, there are usually buyers for it, assuming the price is reasonable. If you are a tight situation and an answer is needed immediately, go with your gut. Run the numbers in your head, and if they work, take the name. If you don’t have a good feeling, do a bit of research and come back to it. There are many good (or better) geographic names out there, but remember much of the value is in development.

1 COMMENT

  1. All are good reasons, but I can sum up Michael and my #1 reason for buying a Geodomain in these words: The Glamour Factor.
    There’s no other way to describe what has made us go after a name in the past. PalmSprings.com, LagunaBeach.com, Acapulco.com and Nashville.com are all extremely different places with different populations, attractions, number of hotels, public perception, etc, but each had that certain “Glamour Factor” that made us really want to buy and, more importantly, made us excited to develop the name.
    On the other hand, we passed on some large US cities (that will remain nameless) many years ago when we could’ve bought them at such a low price that they would have been a great investment now.

  2. I agree with David…you know when you read the name and go “cool” that it’s a winner. Another factor is if the city or place is close enought for you to visit at least a few times per year…this will let you shake some hands, go to the main festival, take pictures or video and pass out business cards and such.

    ***UPDATED BY ELLIOT***
    Agreed… but keep in mind, the value is unlocked when you develop it.

  3. Elliot: We’ve discovered a Geodomain’s revenue generation potential (value) after development is closely aligned to its Glamour Factor.
    Tim: Yes, if Michael and I couldn’t get excited about visiting a place (and often) we’d have a difficult time developing it. When you get excited about a place, developing its Geodomain is fun and easy.

  4. Any suggestions for determining the number of businesses in a city? Searching for hotels in a city is easier, but I assume there must be some sort of business registry which tracks the businesses per city.

    ***UPDATED BY ELLIOT***
    I like to use the site where I buy my data to check: http://www.ibegin.com/usa/

  5. Conor Neu…yellowpages.com…choose a location and a type of business and you get a list.
    Funny, using yellowpages.com to get info that actually will be used against them in the future.

  6. Conor: Easiest way is to check their Visitors Bureau site. If they’re too small to have one, they usually have a Chamber of Commerce site that will give you an idea (and a decent email list to start getting your name out).

  7. Elliot when a domain like NewYorkCity.com is just out of reach, what’s your opinion on extended versions like NewYorkCityTravel.com or NewYorkCityTours.com ? (This applies to any geo domain) Thanks,

    “pixelbug”

    ***UPDATED BY ELLIOT***
    While I do own a few names like this, most are only for resale. I wouldn’t develop one of these because the prices are still high, and the content is somewhat more limited. If the city is known for tourism, then sure, but if it’s a working city and you can only get a sector (like PittsburghTravel.com), I don’t think it would be worth the development expense.
    I could be wrong here, but I would only get a city/state + keyword if that location is specifically known for that keyword and has people looking for that keyword in that location.

  8. Good input from posters. Criteria: City (and surrounding) population, active businesses, glam-popularity factor, tourism/vacation relevancy (hotels), .com carrying the obvious cachet (other geo-relevant extensions a consideration based on buyer budget). I also like to consider pro sports presence which seems to tie into general business strength. As a subset of “tourism”, certain cities may have more international appeal, ethnic diversity, overseas visitor interest.

  9. Great thoughts Elliot – thanks. I also am starting to develop some geo names for tourism and advertising. Do you have any thoughts on buying ‘ancillary’ names to assist and protect the space?

    Example, say I am developing RockyMountains.com (I’m not) would you advise buying, say

    RockyMountain.com
    SkiRockyMountains.com
    TourRockyMountains.com
    VisitRockyMountains.com
    RockyMountainsVacations.com

    Thanks.

    Frank

    ***UPDATED BY ELLIOT***
    I think names like RockyMountains.com, BigEasy.com, NapaValley.com…etc are great. I wouldn’t be inclined to buy something far off from that.

  10. Elliot,
    If there is a geo-city domain for sale with the following specs, what do you think a reasonable price would be for it:
    city population: 150,000
    businesses: 5,000
    popular for tourism: no
    number of hotels: not many
    popular city name: yes
    glamour factor : yes

  11. Great posts ,
    I am thinking of developing the web site of a town that is
    going to became very popular tourist destination in few years time big investments are going to be in this town i live .
    Now i am wondering if is good that i register name like
    portugalshotels.com or portugalshotel.com would that be
    as good as portugalhotels.com
    Mediteraneo

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