What's the going rate for a plain English word followed by a period and the letters "c," "o," and "m"? A lot, judging by the market.
This week, a Texas company paid US$150,000 for the domain business.com. With seven new top-level domains opening up this year, traditional supply-and-demand economics would suggest that the cost of names might drop. But those in the business say that .com has become a premium domain, and that the competition to get addresses there is just going to get fiercer.
"Dot-com is the 800 number of the 1990s," said Chris Elwell, vice president of internet.com - a domain that Mecklermedia bought last month for more than $100,000. "I wouldn't be surprised if they go for over a million dollars in a few years."
Internet Company, for example, which sold the internet.com address, announced Monday that it has 18 possibly high-value domain names for sale - including wealth.com, magazine.com, market.com, and finance.com. President Rob Raisch thinks these domains will potentially bring in prices similar to that of internet.com, primarily selling to newbie companies looking to establish an immediate Net presence.
Big businesses are gambling that these domains are worth big bucks - citing the belief that a simple, generic name is recognizable and unforgettable, as well as being easy to translate to advertising in other media. And then there's the added bonus of traffic from newbies who simply type keywords such as "Internet" into their browser because they don't know any better.
"There's a ton of folks who type in words like 'sex' out of curiosity," said Pinky Brand, vice president of idNames, which brokered the business.com deal.
Generic domain names have gotten scarce, as vanity domain companies snatch up every conceivably attractive word to offer them for sale. The brokers can make huge profits, since initial registration of names with .com registrar Network Solutions costs only $100, with a $50 annual maintenance fee.
The new top-level domains approved by the International Ad Hoc Committee earlier this year - .web, .rec, .arts, .info, .store, .firm, and .nom - are intended to ease the problem of name scarcity. Those buying and selling domains, however, feel that so much marketing has gone into promoting the .com domain, it will remain the indisputable "Fifth Avenue" address.
"Because the default is .com and sites are so consistent about wanting a .com address, it's going to continue to be the popular domain with most users," said Gary Millin, president of vanity domain company iName. "I doubt the new top-level domains will have a big impact - .com has a stranglehold on the market, and it's going to be hard to break it."
Some see those new top-level domains as a potential expense to companies seeking to stake their claim on the Internet. In order to protect their trademark and identity, big brand companies will need to snatch up their trademarked names in all the new top-level domains.
"Do you also need to register ibm.firm, ibm.web, and ibm.arts?" asks Brand. "It almost seems like an extortion - people are having to register as a defensive measure, or else they're in for trouble."
