A domain name is a human readable string that defines an area controlled by the owner of the domain name. When a person types your domain name into their web browser, they are directed to that piece of internet real estate that you control. For instance, google.com takes you to a Google controlled website. Domain names make it easier to navigate through the internet and, because they stand in place of IP addresses, they save us from having to memorize a long string of numbers to get to a website. Because a domain name takes a person to that piece of internet real estate that you control, it reflects on a business and its brand. The very best tech businesses realize this and make sure that they have premium domain names.
The Cost of Domain Names
A website needs two things to exist: a domain name and a web host. It is impossible to have a tech business, or any online business, without having a domain name. It is fundamental to having a website. The question is, how much does a domain name cost?
On average, a domain name will set you back somewhere in the region of $2 and $20 a year, depending on any specials or discounts you get. The latest domain extensions, such as .app, are on the upper end of that scale, or sometimes even above it, because they have just entered the market.
There is no set price for domain names, but unused domain names are very inexpensive. Domain names, like any asset, can be bought and sold, and there is a market for them, on platforms such as Afternic and GoDaddy Auctions, so you should look there to get an idea of prevailing market rates.
If you want an already used domain name, then you should buy it through a broker service such as Go Daddy’s Domain Broker Service.
Premium Domain Are Very Valuable
Premium domain names are, like great brands, short, easily memorable and deeply tied to a specific business, industry or product. The cost of premium domains ranges from thousands of dollars to tens of millions of dollars. For instance, when Gannett Co., Inc sold domain name cars.com, that particular domain name fetched a price of $872 million. According to GoDaddy, the most valuable domain name right now is carinsurance.com, which it values at $49.7 million.
Premium domain names cost so much because they reflect the values, standards and ideals of a brand. They help to build trust in a brand. Supposedly, when a person goes onto cars.com, they feel a great deal of confidence that they will be able to find quality information and the vehicle of their dreams. People who visit cars.com see the website as an authority in its area, trust it, and value what it gives to them. All that drives the value of the domain name. It means that whoever owns cars.com has to spend less on marketing than if they set up a rival website and tried to do exactly what cars.com does.
Defining the price of a domain name is not an exact science. Even the best appraisers make, at best, very good estimates of value. Technology & ecommerce businesses need premium domain names because their businesses are mediated by software. They cannot exist outside of the internet. And because of the massive market opportunities within the tech & ecommerce space, the competition for eyeballs is insane. Your business needs a premium domain name in order to stand out from the crowd and be more easily discoverable by customers.