Buying Domain Names

I wanted to share an email I received without identifying the person who sent it or the names mentioned in the email. The reason I’d like to share it is because I know more people think like this, and I would like to offer my advice.

Elliot,

I just registered the following super-domain names: SuperXYZKeyword.com, SuperXYZKeyword.com, SuperXYZKeyword.com, SuperXYZKeyword.com, SuperXYZKeyword.com.   Do you think Supermedia/Idearc would want to buy these domain names from me? I think they are valuable.

I’ve said it many times, but I want to reiterate it. Just because one company is buying a particular type of domain names, does not mean similar domain names have any added value – especially when they are “brandable” domain names. It’s more than likely that the company went out to acquire the names they were interested in buying, and they opted to not buy others.

I personally do not believe “Super” keyword domain names have any value aside from the value added by SuperMedia when they choose to develop them. Likewise, similar brandable names bought by other companies might not have value if the company doesn’t want to buy them.

Before you go out and register names like these, you should ask yourself why the particular company didn’t think of these domain names before, when they were buying their other names. It’s likely they just weren’t interested and/or had a specific plan in mind for specific domain names.

If you do feel the “need” to take a chance and buy them, don’t buy more than just a couple. Before you know it, you will own dozens or hundreds of names with similar backgrounds, and it’s likely that you won’t sell them.

I want to share a quick domain acquisition tip with you that I have used in the past when I bought a domain name from an end user company who was using the domain name for its website. Although I didn’t think it was likely that they would sell the name, I made an interesting suggestion to them, which helped close the deal.

My advice is that you give them suggestions for new domain names (or cheap domain names), that they can use for their website if they sell their domain name. Depending on their situation, they may be willing to take the cash and re-brand. This is more likely to happen with a company that keeps a minimal web presence, but it probably also depends on the amount of money you are willing to offer them.

Because the deal I made is private and the domain name has already been re-sold by me, I can’t use the exact names in my situation, but I will use two examples to illustrate what you might be able to do. Let’s say you are hypothetically trying to buy ChristmasTree.com from a company called “The Christmas Tree.” In your email to The Christmas Tree, you offered them $50,000 for their domain name, but they said it’s not for sale since they use it for their website.

If TheChristmasTree.com is available to register (or listed for sale), your next move might be to suggest that domain name to them as a good alternative for their website. This might be appealing, especially for a company that doesn’t heavily rely on their website, as they can get some liquidity at the expense of a URL change.

This won’t work every time, and the success rate may be pretty low. I did it once, and the offer was enticing enough to the company. It should also be noted that they didn’t use the domain name for email, so that big complication was avoided. It’s just another tool to have in your arsenal when buying domain names in private.

When you have secured a deal to purchase a domain name, especially one that has significant value, you need to do your due diligence. The most important research you need to do is to ensure the domain name is owned by the party that you think owns it, and the second is to make sure traffic/PR/directory listings and all other promises can be met.

In my opinion, ensuring a domain name is owned by the person/company you believe owns it is the most important thing. Having a Domaintools account allows me to search the Whois history for a domain name. If you are ever unsure of whether a domain name is rightfully owned, you should contact the previous owner to confirm that the name was sold. Phone calls are generally the best way to confirm it, although having an email record is also important.

You can sometimes use the Whois information to make sure a domain name is able to be sold by the contact person. Because some companies use their web developer or tech support company (or person) as the contact, even though you are dealing with the contact email, that person may not have rights to sell the domain name. If you are unsure or have questions, visit the website and contact the company directly (by phone). You can also Google the registered owner and contact the company c-suite offices or the executive listed.

Verifying other things like stated traffic, page rank, inbound links, or other promises is also important. You can ask to test traffic on your servers for a week to try and confirm that it’s “real” traffic and not bot traffic. You can also use free traffic check services like Alexa or Compete. There are a variety of ways to check page rank (like the Google tool bar or   many websites that can be found by searching “page rank checker” in Google). Finally, inbound links can be checked on Yahoo’s Site Explorer.

Do your due diligence before buying a domain name. A few extra minutes of research can save you a lot of money.