Web & communication software

How to Profit From New Domain Name Rules

A new era in Web site naming has begun, providing a golden opportunity for savvy IT professionals to go on the offensive with new domains that can capture additional Web traffic and generate new revenue.

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Under today's rules, names are available in 280 well-known categories, such as .com, .gov or country codes, like .de for Germany. Under the new rules, the Internet Corporation for Assigned Names and Numbers (ICANN) is accepting (between now and April 12) applications for new generic top-level domains (gTLDs), possibly as many as 1,000. Examples of possible new domains are: cities and regions (.paris), domains tied to specific interests (.music) or domains tied to companies and brands (.motorola).

[New era for Web site names begins]

According to Jeremiah Johnston, general counsel at domain name re-seller Sedo.com, "Savvy network administrators can demonstrate added value to their company because they know how to have ancillary domain names forward captured traffic to the primary domain name and how to track that traffic. When the company then sees thousands of people coming to these other domains who are then forwarded to pages where they can actually take an action that generates revenue for the company, the company sees the profit in this remarkably underleveraged strategy."

Known as a domain name portfolio, this use of a collection of domain names enables the capture of Internet traffic that would not normally make it to the organization's web site. It is the 21st century version of adding stores in other towns to capture street traffic that doesn't go near the original site.

There are two kinds of domain name portfolios; one for domainers (people who buy domain names to then sell for profit on the secondary market) and another for the network executives, CTOs, CIOs, et al. Domainers, by virtue of their profession, know all about building such portfolios. This article focuses on those responsible for the enterprise network, for whom this is generally uncharted territory.

What is a Domain Name Portfolio?

A domain name portfolio is a collection of Internet domain names assembled to promote traffic to a business and to protect against brand abuse. It may contain a small handful of names or, as in the case of companies like Microsoft, perhaps thousands.

As an added benefit, in many cases the portfolio itself becomes a valuable corporate asset in which some components have significant resale value (See Sex sells in the domain name game).

As Warren Adelman, president of Internet domain name giant Go Daddy, says: "Anybody who is serious about an online presence or growing their business should have a domain name portfolio. Be sure to have the names associated with that business, have keywords people use when searching for you, and be sure that your business is protected from anyone getting domain names that you would want in the future." Certainly, his point would include most business operations.

But the need for domain name portfolios is not limited to the business world. Government agencies, educational institutions, political organizations and non-profits should consider it as well. Both President Obama and Mitt Romney spent thousands of dollars recently In "Campaign 2012, Web sites are the new real estate" at GoDaddy.com on domain names. In the education market, Harvard University probably regrets the group of non-Harvard students who registered www.HarvardSucks.org. The site shows a prank they pulled at a Harvard-Yale football game where attendees pretended to be Harvard students yet held paper signs that spelled "We Suck" in huge letters.

Size Doesn't Matter

Word in the domain name market is that companies like Amazon, Sony, and Johnson and Johnson have portfolios in the range of 500, 2,000, and 20,000 respectively. However, the size of the operation is irrelevant when considering a portfolio, as small business operator Joe Nazar explains.

In 2007, he launched San Francisco Whale Tours with a single boat. One year into operations he realized his new enterprise needed more than a sign on Fisherman's Wharf to capture traffic. After seeing a Go Daddy commercial on Super Bowl Sunday 2008 he called the company. What followed became an ongoing relationship that helped him select a primary domain name, build a web site and, over time, go much further.

Seeing leads come in through the Web from a single name, the Internet-newbie began acquiring ancillary names to capture missed traffic from misspellings, different extensions, geo-domain names related to the Bay Area, and key words relating to his new niche. The now Internet-savvy businessman owns more than 200 domain names.

As Capt. Joe explains, "The for-sure sweep is to cover all scenarios; .com, .info, .mobi, .net, and .org and redirect that traffic to your web site using a 301 Redirect Page then watch the stats. So let's say a name catches 150 people in a month some of whom buy tickets...that can translate to thousands of dollars for something costing $11 a year."

In the "Oops" Category

Be careful when building your portfolio of names; the idea is to make it easier to find you...not harder, as Netflix discovered recently. The popular DVD rental company tried separating its newer movie-streaming service by launching a new site under the domain name Qwikster.com (which now leads you to the main Netflix site). Suzanne Choney of MSNBC reported the results of a survey stating that the oddly spelled name was easily confused with similar names. Making matters worse the company neglected to first obtain a Twitter account using "qwikster", which was unfortunate since that handle is already owned by someone else. Still worse was the fact that NBC's Saturday Night Live did a very funny skit parodying Netflix CEO Reed Hastings' public apology (SNL Qwikster skit) over the domain name confusion.

Building a domain name portfolio

A well thought-out portfolio includes a selection of primary names, capture names, and defensive names, each described below. Note that, while there does not seem to be any standard way of classifying these groups, these descriptors seem reasonable, if only to make the respective points in this article.

Primary domain names

The primary domain name, often the only name owned by a company, is whatever best approaches the actual business name. Typically it is comprised of the company name plus an extension, i.e.; CompanyName.com.

Capture domain names

Your primary domain name is not likely to capture all attempts people make to find you or what you offer. Grabbing additional names that rein in missed searches can dramatically increase traffic. In this, Go Daddy practices what it preaches. I tried a series of misspellings of the GoDaddy.com primary domain name including www.GoDady.com, www.GoDaddi.com, and www.GoDadi.com. Each capture domain name automatically redirected my browser to the primary domain name and web site.

In another example, Bice's Florist in Fort Worth, Texas, was struggling. Working with Sedo.com they acquired some additional 20 domain names including FortWorthFlowers.com, FlowerNut.com, YourFlowerPlace.com, and eFlowerSite.com as well as a shorter primary name of Bices.com. Traffic increased 47% and sales rose by $1.5 million. Further, by moving so much of their marketing and transactions to the web they were able to close five brick and mortar stores enabling them to retain more profit from each sales dollar.

Next Page: more examples...

The following is a list of some capture domain name types:

  • Abbreviated Domain Names

Internet users often shortcut their path to a company's site by typing an abbreviated name into the address bar. Expecting this, many companies nab those addresses. For example, Barnes and Noble owns www.BN.com which automatically takes you to their primary name www.BarnesandNoble.com while www.MS.com takes you to www.MorganStanley.com. Others use it in reverse; General Motors has www.GeneralMotors.com which automatically takes you to www.GM.com, and www.GeneralElectric.com takes you to www.GE.com. Lingerie company Victoria's Secret owns www.VictoriasSecret.com but although they use the abbreviation "VS" with their web site menu item "VS All Access" and product offerings such as "VS Makeup" and "VS Fantasies", the company seems to have missed out on www.VS.com which takes you to someone's adult site.

  • Key Word Domain Names

To capture searchers who may not know your company or its name, key words are particularly valuable. This is because people have adopted the habit of typing words into the address bar and sticking a .com on (or other extension) and seeing what comes up. Type in www.Shoes.com and you get a site owned by a subsidiary of The Brown Shoe Company, Inc. They may be an old company that has been making and selling shoes for over 130 years, but they are very modern in their development of a domain name portfolio having a host of names including www.BrownShoe.com. However, it appears someone else nabbed the singular www.shoe.com.

So, while many such key words are taken, try combining key words with other key words or with your company name.

  • Geo Domain Names

Geo domains are the actual names of geographic places such as countries, states, and cities, such as England.com, California.com, and Tokyo.com respectively (Note that these do not include geographic subdomains such as .uk, .us, or .jp.) Such names are typically expensive. England.com sold for $2 million in 1999 and Branson.com (a city in Missouri) sold for $1.6 million in 2006.

But the new ICANN rules offer an opportunity to create completely new domains. And you can always combine the geographic name with a keyword or a company name, as Bice's Florist did when they acquired FortWorthFlowers.com and Lovering Volvo in Nashua, N.H., did when it acquired LoveringNashua.com. Just last month VisitCuba.com sold for $100,000.

To locate available geodomain names, try Go Daddy's very cool geo domain search feature at http://geo.godaddy.com/ or check Sedo.com's listing of available geo names at http://sedo.com/us/sedo/sedocomgeo/ where you can buy Sweden.com for $1 million.

  • Misspellings & Fat Fingers

One of the classic ways to end up in the wrong place on the Internet is to misspell or even to "fat-finger" the address. For example, www.llbean.com takes you to a well laid out site for L. L. Bean, the world-popular outdoor outfitter, but variants like www.llbeane.com take you to a page promoting links for Sears, Northface, Columbia, and Nautica while www.bean.com shows you links for companies ranging from JC Penney, Ann Taylor, Macy's, Lands' End and, yes, even L.L. Bean (the registrants for each name appear to be in Hong Kong...a long way from L.L. Bean's home in Freeport, Maine ). Hitting the wrong key such as www.llbeab.com takes you to yet another site full of links to purchase products...but not L.L. Bean's site (the registrant's name appears hidden ).

Defensive Domain Names

There are different reasons to include defensive domain names in your portfolio. Typical examples include outsiders trying to cash in on your brand and those out to foster a negative image of your company. A quick Google search using "iPad" and keyword "accessories" returned a list with Apple Computer in positions one and two and iPadAccessories.com (which does not appear to be owned by Apple) in third place. While not necessarily negative, the site which sells accessories for the iPad clearly gains from the inclusion of "iPad" in its name. On the negative front, Bank of America missed out on www.BankofAmericaSucks.com which is too bad because it is an active Internet site for complaints about the bank. They did, however, grab www.BofASucks.com which they have left blank.

Maintaining a Domain Name Portfolio

Maintenance of your domain name portfolio is also critical. The most important aspect is simply not letting valued names expire. Another key point is to monitor the stats and cull the dead wood.

Adelman says, "The single most important thing is making sure that you've got a handle on renewals. Even some very large companies over time have let a domain name expire and have had to scramble to get it back."

Microsoft ran into a problem when it let its UK Hotmail domain name expire in 2003. Fortunately for them, a savvy soul picked up the name the day it went public and offered it back to the company as a kind gesture. For some reason, the company ignored his entreaty.

After two weeks, The Register reported the story in an article titled "Microsoft forgets to renew Hotmail.co.uk domain". As the article stated, "Microsoft only took notice when The Register contacted the company yesterday afternoon to enquire why its hotmail.co.uk site was registered to a private individual." Eventually someone at Microsoft woke up, realized what had happened, and retrieved the domain name from the then frustrated doer-of-good-deeds.

So, as Adelman continues: "Whether your portfolio contains the two names that are critical to your business or a portfolio of a thousand make sure you've got someone to make sure these things are all set to renew automatically and have a valid credit card assigned to the account...otherwise that's when you get into real trouble."

Just as you should cull an investment portfolio for unproductive stocks, domain names that do not capture traffic or serve another function should be dropped. Let's face it, even at annual registrations near $10 per year, this can add up for those with a lot of names.

As Johnston says, "It should never be a set-it-and-forget-it strategy. Be sure that all names set to redirect to your primary (or other) web site are working properly and that people are actually using those names. At Sedo we have a team that works on it year-round. It is a mixture of network people, legal people, and marketing people who are all part of a task force. They are constantly checking to see that domains are pointing to the right pages and that the statistics show people are actually going there. This enables us to cull nonproductive names thus ensuring our portfolio is always working for us."

Final Thoughts

IT execs in charge of their company's domain strategy should locate available names that will increase traffic to your site or that protect your brand from abuse. For those that will generate traffic, check the statistics both before and after adding them to your portfolio. Drop names that are unproductive either by not generating traffic or by generating traffic that does not later translate into profitable sales.

Smith is president of Alexander LAN Inc., a freelance consultant and writer in IT. He can be reached at DirkADSmith@gmail.com.

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