discuss What constitutes a domain name with investment potential and value?

[DDD.COM]

Domain name investment may seem simple, but in reality, it is not. Different types of domain names, and even each individual domain name, have varying values, with a significant range spanning from just a few tens of dollars to several million or even tens of millions of dollars. Therefore, it is a worthwhile question to explore what constitutes a valuable domain name.

Each person has different investment philosophies and varying levels of investment capital, leading to different investment outcomes. Moreover, domain names are influenced by factors such as cultural differences, market changes, brand value, supply and demand dynamics, resulting in different submarkets within the same field. Examples include the Chinese domain name investment market, Western country domain name investment market, premium domain name investment market, and regular domain name investment market.

Therefore, to invest in domain names, one must lay a solid foundation by thoroughly understanding domain name knowledge. It is also beneficial to learn from investment experts and predecessors, and then develop a domain name investment approach that suits one's own circumstances, taking into account the current market environment.

I have compiled some viewpoints from investors in the industry to share with you:

Perspectives from Chinese investors:

1. The value of a domain name primarily lies in its usability. If someone is using it, it indicates that it has a certain value. However, when it comes to investment, the principle of scarcity applies. Short, dictionary words, and so on are preferred. Firstly, they are easy to understand; secondly, they are easy to remember; thirdly, they symbolize identity; and fourthly, they come with inherent traffic. In the age of the internet, traffic is highly valuable!
2. The value of a domain name lies in its universality. For example, short numeric domain names can be used for almost any website or platform because numbers have unique meanings in Chinese culture, making them highly versatile and memorable. We can see many Chinese companies using numeric domain names for their websites, while they are rarely seen in Western countries. For a long time, Chinese investors have been buying numeric domain names from abroad and waiting for their value to appreciate.
3. Domain name extension is crucial. For example, the same domain name with a .com extension is more valuable than with a .net extension. Different domain extensions have different applicability, and .com is the most widely applicable. As a result, there is fierce competition and high prices for good .com domain names, which remain dominant in the mainstream market.

Perspectives from Western country investors:

1. Short letter domains are limited in quantity, and excessively long letter abbreviations cannot effectively represent brand meanings. Word domains, including certain word combinations, have always had potential value because the majority of end customers do not have the exact word .com. To acquire a word .com corresponding to their brand, they usually allocate budgets exceeding those for other domain names.
2. Domain names related to future trends are also highly valuable. However, these domains are not beginner-friendly as valuable ones have already been registered by early adopters, leaving potential traps that can lead to wasted money.
3. Keyword domains have always been a good choice. As long as the right keywords are chosen, someone will eventually be willing to pay for them. Prices can range from a thousand dollars to tens of thousands of dollars or even higher, as some end customers are willing to pay a higher price for a particular domain name. However, it is important not to be too greedy when investing in keyword domains. If the price is similar, hesitation is unnecessary. Some end customers, once the price exceeds their expectations, may choose other word combinations that are similarly priced but even better.
4. ccTLDs (country code top-level domains) and New TLDs (new generic top-level domains) are also worth considering. For ccTLD domain name investments, it is advisable to choose the extension of your own country. However, if you have specific knowledge about another country, you can also explore investments there. Additionally, some country-specific extensions are generic, offering even greater value and opportunities. There is also investment potential in certain New TLDs, but these two categories require higher quality standards for the domain names themselves.

 

[MKA]

Perspectives from Chinese investors:

The value of a domain name primarily lies in its usability. If someone is using it, it indicates that it has a certain value. However, when it comes to investment, the principle of scarcity applies. Short, dictionary words, and so on are preferred. Firstly, they are easy to understand; secondly, they are easy to remember; thirdly, they symbolize identity; and fourthly, they come with inherent traffic. In the age of the internet, traffic is highly valuable!

I don't think existing traffic is much of an argument...but I think potential traffic is.

If you don't use wanneng.com, it's not going to have much traffic. But the moment you market it it's going to explode, because it's a word most Chinese people recognize so it has lots of potential. But it's important to point out that the traffic isn't going to exist until it's marketed.

The value of a domain name lies in its universality. For example, short numeric domain names can be used for almost any website or platform because numbers have unique meanings in Chinese culture, making them highly versatile and memorable. We can see many Chinese companies using numeric domain names for their websites, while they are rarely seen in Western countries. For a long time, Chinese investors have been buying numeric domain names from abroad and waiting for their value to appreciate.

Short numeric domains are not as common as you might suspect, there was an article by Kassey Lee some time ago that showed that they only make up a small fraction of established domains. They're also tricky to work with in terms of flexibility, because not every brand can be translated into numbers.

I've further noticed that a lot of them are for sale, in other words they're not in use: and for domain trends to become popular they have to be in use. Moreover, the a lot of the ones in use redirect to some other domain.

But like you say, they're popular among Chinese domain investors. Who will pay thousands of dollars to get their hands on any NNNN.com.

Domain name extension is crucial. For example, the same domain name with a .com extension is more valuable than with a .net extension. Different domain extensions have different applicability, and .com is the most widely applicable. As a result, there is fierce competition and high prices for good .com domain names, which remain dominant in the mainstream market.

I agree, but I'm going to take it one step further and say that the market for non-.com isn't the same as the market for .com.

Claims of a .net being worth 10% or even 1% of a .com based off sales figures are pointless because for every 1 .net sale you have 100 .com sales. So not only are they less valuable when they sell, they're also a lot more difficult to find a buyer for.

Perspectives from Western country investors:

Short letter domains are limited in quantity, and excessively long letter abbreviations cannot effectively represent brand meanings. Word domains, including certain word combinations, have always had potential value because the majority of end customers do not have the exact word .com. To acquire a word .com corresponding to their brand, they usually allocate budgets exceeding those for other domain names.

The popular trend among companies in the West are brands, and effective brands are limited to one or two words. With an emphasize of being easy to remember, pronounce and spell, with a recent trend emerging of reflecting what the company does.

Something like cloudscale.com is fantastic, because it implies that it provides cloud-based services that are scalable while still sounding like a brand that can be used for other services as well.

Domain names related to future trends are also highly valuable. However, these domains are not beginner-friendly as valuable ones have already been registered by early adopters, leaving potential traps that can lead to wasted money.

This is another one of those investor trends. People are just trying to strike while the iron is hot. Pay $10 and then cash out for $10,000. That's the idea. But like you said, there's more money lost than made here.

I think it was cbcoil.com that was bought for $500,000 shortly after the legalization of marijuana in some States, and he recently tried to sell it and the offers didn't even reach 1% of what he paid for it.

Keyword domains have always been a good choice. As long as the right keywords are chosen, someone will eventually be willing to pay for them. Prices can range from a thousand dollars to tens of thousands of dollars or even higher, as some end customers are willing to pay a higher price for a particular domain name. However, it is important not to be too greedy when investing in keyword domains. If the price is similar, hesitation is unnecessary. Some end customers, once the price exceeds their expectations, may choose other word combinations that are similarly priced but even better.

I think EMD:s (and PMD:s) are highly overrated. There are very few acquisitions of these kind of domains anymore. They were good when they helped out with SEO, but there's no real reason to own bostonelectronics.com unless your company's name is Boston Electronics.

ccTLDs (country code top-level domains) and New TLDs (new generic top-level domains) are also worth considering. For ccTLD domain name investments, it is advisable to choose the extension of your own country. However, if you have specific knowledge about another country, you can also explore investments there. Additionally, some country-specific extensions are generic, offering even greater value and opportunities. There is also investment potential in certain New TLDs, but these two categories require higher quality standards for the domain names themselves.

Obviously Germans use .de, Norwegians use the .no, etc. especially for local businesses. But one mistake people make here is that they tend to combine English words with non-English ccTLD:s. If it's a .de, e.g. hansworkshop.de rather than hanswerkstatt.de, which just feels off.

As far as .co, .io, and .ai. I don't see much value in them. It's what tech companies get when they can't get the .com, but because of that they're not willing to spend as much money on these domains anyway.

What's notable to point out here is that if you have cloudscale.com you'll be "Cloudscale," but if you own cloudscale.ai you'll only ever be "Cloudscale dot AI."

 

[BaileyUK]

A well written and market-aware response by MKA and the following quote is a nice little wrap on the importance of .Com above any other

What's notable to point out here is that if you have cloudscale.com you'll be "Cloudscale," but if you own cloudscale.ai you'll only ever be "Cloudscale dot AI."

 

[DDD.COM]

A well written and market-aware response by MKA and the following quote is a nice little wrap on the importance of .Com above any other

Yes, I agree. Mr. MKA's viewpoint has helped me gain a deeper understanding of the value of domain names.

 

[DDD.COM]

I don't think existing traffic is much of an argument...but I think potential traffic is.

If you don't use wanneng.com, it's not going to have much traffic. But the moment you market it it's going to explode, because it's a word most Chinese people recognize so it has lots of potential. But it's important to point out that the traffic isn't going to exist until it's marketed.


Short numeric domains are not as common as you might suspect, there was an Kassey Lee some time ago that showed that they only make up a small fraction of established domains. They're also tricky to work with in terms of flexibility, because not every brand can be translated into numbers.

I've further noticed that a lot of them are for sale, in other words they're not in use: and for domain trends to become popular they have to be in use. Moreover, the a lot of the ones in use redirect to some other domain.

But like you say, they're popular among Chinese domain investors. Who will pay thousands of dollars to get their hands on any NNNN.com.


I agree, but I'm going to take it one step further and say that the market for non-.com isn't the same as the market for .com.

Claims of a .net being worth 10% or even 1% of a .com based off sales figures are pointless because for every 1 .net sale you have 100 .com sales. So not only are they less valuable when they sell, they're also a lot more difficult to find a buyer for.


The popular trend among companies in the West are brands, and effective brands are limited to one or two words. With an emphasize of being easy to remember, pronounce and spell, with a recent trend emerging of reflecting what the company does.

Something like cloudscale.com is fantastic, because it implies that it provides cloud-based services that are scalable while still sounding like a brand that can be used for other services as well.


This is another one of those investor trends. People are just trying to strike while the iron is hot. Pay $10 and then cash out for $10,000. That's the idea. But like you said, there's more money lost than made here.

I think it was cbcoil.com that was bought for $500,000 shortly after the legalization of marijuana in some States, and he recently tried to sell it and the offers didn't even reach 1% of what he paid for it.


I think EMD:s (and PMD:s) are highly overrated. There are very few acquisitions of these kind of domains anymore. They were good when they helped out with SEO, but there's no real reason to own bostonelectronics.com unless your company's name is Boston Electronics.


Obviously Germans use .de, Norwegians use the .no, etc. especially for local businesses. But one mistake people make here is that they tend to combine English words with non-English ccTLD:s. If it's a .de, e.g. hansworkshop.de rather than hanswerkstatt.de, which just feels off.

As far as .co, .io, and .ai. I don't see much value in them. It's what tech companies get when they can't get the .com, but because of that they're not willing to spend as much money on these domains anyway.

What's notable to point out here is that if you have cloudscale.com you'll be "Cloudscale," but if you own cloudscale.ai you'll only ever be "Cloudscale dot AI."

Thank you for your response, which has provided me with a deeper understanding in this regard.