The central point of this post, intended primarily for business or organization leaders, is to emphasize that you may only have a single chance to secure that perfect domain name. Don’t lose out on that opportunity!
Although I had been considering a post around the importance of not missing domain acquisition opportunities for some time, the spark came after reading the great article Alan Dunn wrote for Medium, entitled Your Domain Name Will Soon Be Gone. He makes the strong case that “…demand for great domain names is at it’s highest level ever and the available inventory continues to shrink.”
That is because the majority of companies will want to have a .com as their central domain name. As he points out, most single word .com sales are at prices above $100,000, supporting that statement with an impressive list of names that changed hands during 2018, almost all above that price level.
Most Domain Names Sell Only Once
I want to stress that you may have only a single opportunity to pick up a domain name. By paying a tiny annual renewal fee an owner can hold a domain name forever (unless it is trademark infringing). From time to time those holding premium domain names put them up, either actively or quietly, for sale, but these opportunities are rare.
“…if a domain name that is a perfect fit for your company is available, odds are this will be your only chance to procure it.”
Even domains that are far from the elite class seldom sell more than once. The NameBio Daily Market Report highlights domain names that have ever had a previous sale in the database record. Only a few out of the typically 200 sales per day have ever sold previously. Therefore if a domain name that is a perfect fit for your company is available, odds are this will be your only chance to procure it.
Alternatives to Full Cash
Even for fairly big companies, a price of $100,000 to $1,000,000 or even more may be difficult to come up with on relatively short notice. For that reason premium domains, even those at prices well below the ultra-premium level, are frequently sold through instalment plans (either directly by the seller or through a marketplace or escrow service or other third party). This may make it easier for your company to procure the domain name and start using it while spreading payments over an extended period.
Alternatively sometimes premium domains are sold for a combination of cash and a share in the business (as was done by Michael Cyger and the Brew.com domain name for example). I think this has significant advantages for both parties. The company acquiring the domain name does not need as much cash, while the domain investor diversifies into a revenue stream that is not directly domain name dependent.
Since acquisition opportunities are rare, make sure that your company or organization is ready. The first step is to determine what domain name is the perfect fit for you. This will probably involve assistance from branding, marketing and naming experts, as well as in-house discussions. While the determination is complex it is also simple. Ask yourself what name people would associate with the products and services that you offer or plan to offer. A secondary question is what features distinguish your business from competitors.
Sometimes the link between your business and the domain name is obvious. For example you see a domain name like Hotels.com and you know immediately what the business is all about. At other times your company may be currently using a longer domain name, but for elegance, wider regional acceptance, or other reasons you seek to rebrand with initials such as KFC.
The long established firm Canadian Tire were developing a new rewards system not long ago, and they decided to brand that under Triangle Rewards, obtaining the domain names triangle.com and triangle.ca. Those who know the company know that a triangle has long been part of their graphic image long term, so the name is a good fit.
After you have decided what name or names you want, probably the next step is to obtain assistance from a domain broker who handles domain name acquisitions. They will be able to track down who currently owns the domain(s) and represent you in trying to procure them. A good list of domain brokers has been compiled by Elliot Silver of Domain Investing. Some of these brokers mainly handle sales, others mainly acquisitions, and some a mix of both.
“Brokers have superior negotiation skills, are not emotionally involved, will know the details of similar transactions, and can point out domain alternatives if the acquisition process gets stalled.”
There are numerous advantages to being represented by a broker. They will have superior negotiation skills, are not emotionally involved, will know the details of recent similar transactions, and can point out alternatives if the acquisition process gets bogged down.
Patience and Don’t Box Yourself In
Even with a good broker, you probably will need to have a lot of patience. Elon Musk announced recently (via Twitter!) that the purchase of the domain name Tesla took more than a decade and $11 million dollars.
His comments re the Tesla name demonstrate a couple of important points. He badly wanted Tesla, not TeslaMotors, since it would not box the company into only automobiles. Also, he did have a backup name, Faraday, which he was considering as an alternative.
Don’t Overlook New Extension Acquisitions
There continues to be debate about the long term prospects for the so called new domain extensions, but I feel companies should not overlook acquisition opportunities in that space even if they do not have firm plans for immediate use. These fall into two categories.
Exact Company Match
If your company happens to have a formal name that ends in one of the new extensions you should not overlook the chance to have a domain name that is precisely (and solely) your company name. Some of the new extensions include .agency, .associates, .global, .group, .partners, .productions, .properties, .science, .space, .solutions, .tech, .technology .tours,.ventures, .world and many others – there are 700+ available new extensions!.
“If your company name ends in one of the new extensions do not overlook the chance to have a domain name that is precisely (and solely) your company name.”
While it is true that a UDRP or legal action might be able to secure it afterward if it was registered in bad faith, it is usually simpler and lower cost to acquire it first. The case is particularly important when there are many different companies, in different businesses and regions, that share the same name.
Unique Generic Match
Another case where you have only one acquisition opportunity is when an exact match to precisely your type of business is available in a new domain extension. We saw several companies investing at the 6 figure level in such domains recently, obtaining names like online.casino, home.loans and vacation.rentals. Make sure that you, or your domain advisor, knows the new extensions well so that you will not lose out on opportunities.
When an acquisition opportunity arises it is natural to ask what price is reasonable. While one can look at comparator sales prices, fundamentally the only important question is how much is having this domain name worth over the long term to my business. A future post will provide guidance in such a calculation, but ultimately you will know best how to estimate the worth of the domain name for your own business.