Drivers in Las Vegas have long been forced to contend with a jerk who terrorizes the roads of Southern Nevada in a black Lexus with the license plate “dot com.” That’s me. I’m that jerk. I’m so nerdishly committed to my domain extension of choice, that I’ve gone so far as to tell the world on the back of my car!

As it came time to write the very important guide for StartupStud.com about selecting the right domain for a new startup, I had to find a way to set my own .com jerk stubbornness aside and provide the best available information about the latest market and SEO trends for domain name purchases.

With all of these new domain extensions floating around, are “.coms” still king? What is the most current domain valuation process? How should someone choose the right name?

Having these burning questions in mind, I reached out to our friends at Sedo.com for a truly data-driven, market expert interview about everything that needs to be taken into consideration when selecting a name.

Far and away the undeniable leader in the global domain aftermarket, Sedo.com‘s marketplace offers more than 18,000,000 domain names and operates the most active domain exchange on earth. With more than 2,000,000 active members and staff working from 30 countries around the world, we would have been hard-pressed to find anyone with more reliable data to help cut through all of the noise you see online about domain names and extensions.

Spoiler Alert: .coms are by far still the most valuable and used of all domain extensions!


 

StartupStud.com: What recommendations does Sedo have for an entrepreneur seeking the perfect domain name at a price that is within their startup budget?

Sedo: Most businesses, including entrepreneurial ventures, tend to overlook how crucial a domain name can be to their success in not only establishing the best online footprint, but how this fits into their overall branding.

We suggest the following tactics when aiming to find the best domain name:

  1. Avoid using a domain with too many characters or a bulky, unspecific, over-complicated domain name like chicagoaccountantandfinancialservices.com.
  2. Select domains that do not differ completely from your business or concept’s name which easily causes confusion among traffic to the website.
  3. Instead seek generic premium keyword domains improving SEO results and the likelihood of new business growth and development.
  4. Be open to exploring the unique and branded names now available to the right of the dot.

A quality domain is essential to stand out from competition who in most cases is not utilizing the strongest name or strategy to emphasize their online footprint. Creating a strong online identity should be at the forefront in building an effective brand as well as taken into account during early discussions of launching a business, re-strategizing or implementing something new.

We’re seeing this strategy being implemented among many companies like pharmacy chain CVS utilizing a customized domain, www.cvsquits.com when they launched their campaign around the removal of tobacco products. Great, innovative companies like the ones being birthed from the latest boom in startups lack a key component in the nearly unlimited amount of strategic and creative choices for their websites.

We encourage our clients to think of their domain name as their company’s calling card as the days of business cards, phone book listings and printed bulky materials are slowly waning and the first impression a business makes is through their website.


SS_buildalife_400
Liking StartupStud.com? You’ll love the Instagram. Click the photo to open the @startupstud profile and find the ‘follow’ button.

 

StartupStud.com: What are the primary factors that determine a domain’s value?

Sedo: A few of the major categories we take into consideration when placing a value on a domain are the TLD, length of the domain, linguistic suitability, and branding/commerce potential. When providing appraisals on particular domains we also always look to comparable sales data, which can be one of the most helpful indicators of a domain’s value in the current market. As with the real estate market, the domain market is constantly evolving.

As such in the domain world, when seeking a valuation, you want to have the most current sales data to support any values quoted as a fair market value.

StartupStud.com: Are .com’s still the most valuable TLD? If so, do you see that being the case for the foreseeable future? For how long?

Sedo: .com names are still, by far, the most in demand domain name and our expectation for the foreseeable future is that it will stay in this position. Our current market data puts the average price of a .com name at $4,701 while the next highest selling TLD is .net at $1,429. .com is still the TLD that can be used for everything and has the broadest use case although names such as .web, .site and others have good potential, too.

Strong arguments can be made for using the new TLDs such as shortening existing lengthy domain names with the use of the a new TLD or also using one that is more relevant and targeted for your business such as .club, .bar, .shop, etc. It is for the most part too difficult for the new names to compete on the same level with .com in the near future and in all fairness comparisons between long-standing TLDs and the new names should be withheld.

Benefits to using a new GTLD is coverage of a vertical or a geographic area or anything else that further clarifies what your website and business are all about.

Further data and information on market trends: https://sedo.com/us/resources/market-trends/

StartupStud.com: As we’ve seen more and more domain extensions enter the registration landscape, what has the response been in the aftermarket in terms of these new extension’s valuations?

Sedo: To date, the volume of sales has been relatively low when compared to .com and sales of other more established extensions but we at Sedo have been vocal about expectations needing to be set realistically. However, the number of sold domains under new TLDs on Sedo’s aftermarket has increased enormously: In 2013 we had domain sales under 160 different TLDs. As of today, almost 200 TLDs are traded on our market. If you look at this number, the new gTLDs are very successful.

It is still too early to draw any conclusions about the success of the new extensions but the initial sales we’ve seen are good indicators for future price developments industry-wide.

The ten highest public gTLD domain name sales at Sedo in the first half year of 2015 already demonstrate good indicators for some increased success of the new gTLDs.

2015-top-10-domain-sales

While domain investors can be quite prosperous by investing in domains and then in turn selling them, they tend to be skeptical with investing in the new gTLDs. On the other hand, smaller companies, startups and local businesses are quite keen on obtaining new gTLD names for their online presence. As a result prices for new gTLDs aren’t comparable to related .com names. Most end users can’t afford a costly domain purchase which is in line with our projections. The trading of gTLDs is still in its infancy, especially since not all TLDs have been released yet, including the most highly anticipated ones like .app or .web or .shop.

If you look at past new TLD launches such as .co, whose good stats and global acceptance demonstrate the need for these domains but you also need a good test case using the TLD. .Co was fortunate enough to have for example Twitter use www.t.co, which created more awareness among users and therefore increased the value of .co names in the aftermarket. The same success is possible with .xyz, since Google’s new parent company Alphabet has decided to use abc.xyz. Other new gTLDs will profit from the publicity about .xyz as well.These test cases will have impact and influence on the value of TLDs in the aftermarket.

We at Sedo believe the key to the success of these names is creating awareness among businesses and end users alike and in turn we’ve been focused on partnering with numerous new gTLD registries. Proactive marketing for these new names is at the forefront of our initiatives in this vast market of thousands of new gTLDs are competing with each other.

It will take some time until we will see the effects of marketing effort among TLD Registries and as time progresses we may see that the number of new gTLDs decreasing since not every new gTLD will have the power, resources and budget to maintain solvency in the domain industry.

StartupStud.com: Are the clients who are purchasing these new extensions in the aftermarket typically speculators or are you seeing them actually being used in commerce?

Sedo: We have already seen users implementing new gTLDs for their online presence. Coffee.club is a perfect example of a new extension being used for an online e-commerce site. This service provides high-quality fair trade coffee delivery direct to their customer base.