Buying Domain Names

There are many considerations that I make before acquiring a domain name. Most of my domain purchases these days are either via auction or private acquisitions. For this article, I want to focus on my private acquisitions.

I think it’s probably easiest to cover some of the main things I consider in bullet points with an explanation about why I believe these factors are important, and I’ll allow you to ask questions if you’d like. You are also welcome to share some of the factors you consider when  acquiring  domain names.

Factors I consider when acquiring a domain name in private:

• How the domain name was previously used. A domain name’s history is important for a few reasons. I wouldn’t want to build on a domain name that had a website that was flagged by others for fraud or a scam. When people search for the domain name in Google, a fraud or scam report would be harmful to the new brand, even if the website was completely different.

• The type of landing page was used. If I am looking to buy a domain name for re-sale purposes, I am most interested in buying a name that wasn’t previously listed for sale. In addition, I would prefer to buy a domain name that didn’t have a “for sale” notice or any type of information alluding to it being for sale. If nobody else knew it was for sale, it will be easier to sell a name that hasn’t been pitched before.

• Other extensions that are registered and/or developed. The more extensions in this keyword that are registered, the better. This means there are more potential buyers as others found these keywords valuable, and the .com trumps all others. In addition, other developed extensions mean that there will inevitably be traffic to the .com and probably a company that wants to upgrade to the .com.

• Domain age.   Although this might not be all that important for search engine rankings for a developed website, a domain name that has been registered for many years indicates that the keyword has been valuable for a long period of time. I also look to see how long other TLDs have been registered, as older names in alternative TLDs is a good indicator of value in the .com.

• Number of developed .com names with the keyword or keyword string. If there are a number of end users that operate websites using the exact keyword or keyword string, it’s likely there will be interested buyers who want to upgrade. As an example, if NationwideHVAC.com services the entire country, they might want to upgrade to HVAC.com. It would be super expensive of course, but an exact match domain name like this could benefit a company immensely.

What are some of the factors you consider when making your acquisitions?

IBM Chief Innovation Officer Bernard Meyerson wrote a blog post discussing “inventions that will change the world within five years.” The article covers the “IBM 5 in 5” list that the company unveils annually.

Not only do I think Meyerson’s article is well worth a read from a consumer point of view, but as a domain investor, you might be able to use the 5 in 5 list to speculate on domain name acquisitions. I won’t get into a discussion of the actual technologies that are discussed because that’s probably something Stephen Douglas could more knowledgeably cover, but it’s interesting to review.

Personally, I tend to stay away from hand registrations in general, especially when it comes to speculative technology. However, if you can grab meaningful keyword .com domain names for emerging technology, then it could be a decent opportunity. I don’t think it’s wise to buy longer tail speculative tech names, especially if those are in alternative extensions.

The long story short is that if you can get great keyword .com domain names early enough, these types of speculative purchases may be rewarding. You probably don’t want to waste your money registering names where the keywords have already been picked over by other domain investors (like 3d, cloud…etc).

You should also be aware that some of the technology that is proprietary will likely have trademarks associated with them, so use caution.

Whatever your domain interests are, the article is interesting to read.

Thanks to Francois for sharing.

One of the things I look at when evaluating domain names to acquire is how many other TLDs are registered for that keyword. Obviously, the more domain names that are registered, the better. In addition, I also look at very similar keyword domain names, including those that use the same keywords with additional words (ie DogWalker.com and BostonDogWalker.com).

Taking this a step further, I also have a look to see who owns the other extensions and when they were registered. It’s always good to see that Name Administration or another successful domain investor owns a keyword name in an alternative extension because that is  indicative  of a good name.

Even better, though, is when a company or person in that particular field owns one of the other extensions. If multiple companies own different extensions in the keyword, it’s even better, especially if the registrations are aged (5 years+).

First off, those are great sales prospects should you want to sell. Secondly, it shows the keyword has value to companies in the field, so you might either be able to sell it quickly, build on it if you want to spend the time/money, or wait for the right offer to come around.

Finally, when you buy the .com and there are other developed extensions, you’re likely to receive traffic as a result. This traffic is fairly well targeted and can be monetized in a variety of ways. It can also be used to show potential buyers the value of buying the domain name from you.

Buying the .com domain name when there are many other TLDs registered will likely cost significantly more money. However, there is considerably more upside to these types of names.

When I receive inquiries on my domain names, the first thing I do is try to find out who the buyer is. I use a variety of means to try and determine who wants to buy my domain name. Although my price isn’t solely based on the buyer, that is a strong consideration that I make.

Based on how important I think it is to find out who my buyer is, I assume other domain owners do the same type of due diligence when I am trying to buy a domain name. Sometimes I think it helps when people know I am a domain investor because they don’t expect to get as much as they would if I were a large company like Google or Apple. On the other hand, many people don’t want to think they are leaving money on the table, assuming I am offering a low number.

For the most part, I do not hide or shield my identity because I don’t like it when others do that for me, and I only offer a number I am comfortable paying. When I do wish to remain anonymous, I use a company like Afternic, have someone I trust reach out on my behalf, or I use an anonymous email address. To complete a private acquisition, I use Escrow.com. I shared a way to remain anonymous on deals on Friday.

Although I don’t like the idea of being anonymous, I do think it can save money depending on the circumstances. this is why some of the biggest companies use private companies to buy domain names anonymously, and it might be a good idea for you and me.

Many people like to buy domain names anonymously because some domain owners price their domain names differently based on who is buying the domain name. I want to share a quick tip about staying anonymous when using Escrow.com, assuming you’ve kept your identity private during the negotiation process.

In your account profile settings, change your name to something generic like “Domain Administrator” or “Domain Manager.” When the escrow transaction is set up, the seller will receive an email and instead of having your name in the transaction, the fictitious identity will be listed.

One word of caution with this. You will need to make sure to check off the box to have the payment remitted to your company instead of to you, as it will be made out to that name if you don’t. It’s probably not possible to cash a check at the bank made out to “Domain Administrator.”

Just as a reminder, the seller could obviously search Google for your email address, so you’ll want to make sure you don’t have a presence there (or attached to a Facebook / LinkedIn account).

Here are a couple of other things of importance to note if you do this. A real email address and phone number should always be provided (the second phone number listed is not given to the seller). Also, payment by credit card or Paypal will require full disclosure so the transaction should be done by wire.

It’s also a good idea to notify Escrow.com’s support team so they know you. They may cancel a deal if they suspect fraud or money laundering.