Reprint of Important Article I Authored

I wanted to re post an article I wrote a little over a year ago on domains, to remind everyone of the big picture.  Also, note, we are about to offer some incredible prices on a few domains in Sept and October at SimpleDomains.com to insiders who get newsletter so be ready and aware.

Key Points on the Evolving Value and Strategic Advantage of Category Domain Names

Domain names are appreciating, hard assets just like land or traditional real estate. The difference is, that domain names (like the Internet) are still in the 2nd inning, with a “Wild-Wild West” element which often leads to returns when these assets are sold that outperform other asset classes. For instance, Computer.com was acquired for $250,000 (they had inherited the domain in an acquisition). Nine months later, the buyer sold it to Systemax (NYSE company)  for $800,000, who then sold it for $2,200,000 nine months after that.
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Many of the domain sales to larger companies are under a Non-Disclosure Agreement regarding price, but most are made public, including:

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Gambling.com $17M

Insure.com for $16m

Games.com by AOL for $11.5m

Fund.com $10.2m

Beer.com $7.2m
Toys.com to Toys R Us for $5.1m

Clothes.com to Zappos (Amazon) for $4.9m

Vodka.com for $3.5m

Creditcards.com $3m
Candy.com $3m
Timeshares.com to Wyndham $3M
Computer.com $2.2m
Datarecovery.com for $1.8m
Camera.com for $1.5M
Ad.com for $1.4m
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MANY large brands also own and leverage their category domain name. Some examples are:
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Johnson and Johnson owns Baby.com (primary address on television)

Barnes and Noble own Books.com

AOL owns Love.com and Games.com

IAC owns Gifts.com and Hotels.com
Bank of America owns Loans.com
ABN Ambro owns Mortgages.com

Food companies such as Kraft, Pharmaceutical companies, and financial institutions own category domain names that are both generic and relevant to their specific industries; in some cases, these companies manage thousands of domains internally. Pharmaceutical company GlaxoSmithKline owns and operates Depression.com and Asthma. Glaxo is able to provide their visitors with the most recent and relevant information on these particular diseases, therefore becoming an authority in that specific industry. Instantly, visitors trust the gskbrand, allowing them to market their brand of depression and asthma medications to a much wider and more targeted audience. Bank of America owns Loans.com, ABN Ambro owns Morgages.com; Monster.com owns and operates Jobs.com, as does Toys R Us with Toys.com.
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Additionally, many companies with multi-hundred-million, and even billion, dollar market caps or valuations switched either their domain name from their specific brand to a category domain name, or these companies changed the name of their brand altogether, and each company experienced exponential—from increasing the consumer-to-business/business-to-business traffic, to the exit valuation. The list below details just a few companies that have benefited from this:
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-Dealtime became Shopping.com pre IPO (eBay acquired shortly after IPO for $635m)
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-Hotel Reservation Network paid $10m for (and became) Hotels.com pre S 1 and IAC acquired.
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-Teckno Surf became Advertising.com. AOL acquired for $495m.
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-Rent.com was acquired by eBay for 400m+ �
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-Dictionary.com was acquired by Ask.com

Why Dotcom. What about other TLD’s (extensions like .us,.biz,.me)
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There has been a lot of noise about other TLD”s; but that’s all it is, NOISE.

Here are a few pointers:
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-800 numbers still rule. So do Dotcoms.
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-If you were to consume 1 week of media from primetime TV (ie: NFL, NBA, American Idol, Desperate House Wives, etc.), listening to the radio, reading billboards as you drive, it is our estimate that within that 1 week, you will see 95 to 99 percent Dotcom (with some  dotorg, dotgov , dotedu) totaling hundreds of millions of dollars of advertising and branding. Finding Walmart online is simple; you know to go to Walmart.com. Want see what’s going on in the NFL? Go to NFL.com. Missed who got the axe on American Idol? Just visit AmericanIdol.com. Dotcom has become part of the brand and consumer mindset. If you own Chocolate.com, nothing would be better than someone buying Chocolate.tv and spending millions against it; Chocolate.com would undoubtedly garner much of this traffic, mainly because the public is conditioned, all day, everyday, for many years to trust the dotcom extension. In Germany, where .DE has prevailed as a country code TLD better than most, the top 10 websites are still .com’s. The same goes for China. The more TLD’s available, as well as the increased dilution of these TLD’s, the better the outcome for dotcom assets, as they become more important. �
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Some of the strategic reasons to own a generic domain name:
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-Leads to being rated higher for relevancy and thus optimizes better in the major search engines like Google, Bing, and Yahoo.
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This is the most important of many points. The algorithms that Google uses to rank sites constantly changes, but the one component that is consistently weighed higher than the rest is a site’s relevancy score. Google is trying to deliver the most legitimate and relevant results to cut out any “spam” sites. It has been proven that when the keyword being searched is in the domain, that relevancy scores are high, but when the domain fits that term, then you get the highest relevancy score. There are still “naysayers,” such as SEO agencies, that don’t work with the best domains, but will claim that they can deliver top performances by utilizing great SEO blocking and tackling techniques and ultimately obtaining high rankings on Google. To put this in simpler terms, all that an SEO firm does is add content–LOTS of content to your site, as well as add links (preferably one way, inbound links to and from other sites. If one site does a fabulous job with SEO, includingpages of relevant content, and then a new company with a generic domain name does a lousy job with SEO and just has a parked site, then the lesser domain should, but not always, win in free search, mainly because the lesser domain is simply a more developed site (sometimes the domain can even prevail here in less competitive categories). However, if both sites are equally developed, the category and keyword domain namewill win every time on relevancy given time.
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This leads to the question: How do domains help with Paid Search, PPC, or SEM? Anyone can pay out a few bucks for placement in the paid search, but there is emerging evidence that category domain names attract more clicks; paid placement would positively influence your free, organic search results(paid companies are seen by the spiders as more relevant), and mort importantly, when someone does click on a link in the paid search results, if the link/domain name is generic your visitors are more likely to remember the domain name, and therefore they are more likely to return to it at a future date, and even more likely to refer their friends to your site.
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The final key point as it relates to search is direct navigation to your site. Let’s say an Internet user has never heard of neither MerchantAccounts.com, nor MerchantExpress.com. Of the two, the generic domain name (MerchantAccounts.com) is more likely to be typed directly into the browser by the user, whereas names such as MerchantExpress.com would not; free and paid search traffic that has typed in or searched the words “Merchant Account” is the highest qualified lead on the Internet. For example, at InsuranceQuotes.com, 50 percent of Direct Navigation and free search traffic becomes an active plicy, and the overall conversion including paid search is 30+ percent.
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-Creates an intuitive address and brand in your industry
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The Internet has a lot of clutter in every category, also reflected in Google. Having an intuitive domain cuts through it all. Even if you are an established brand, such as Johnson and Johnson or Barnes and Noble, it is often the case that a consumer still has not made a brand decision. By being both BN.com and Books.com, or Baby.com, the established brand has a chance to educate and acquire customers from an unbiased point, leveraging their category domain and address.
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- Has instant credibility with consumers and businesses.
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Consumers are conditioned to see a category term domain and assume it is credible, in the same way Google sees as relevant. Sometimes there is one opportunity to get that visitor or customer and the credible address wins. �
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- Establishes your business as the authority in its category.
 When salespeople call customers as Creditcards.com, at the business development level, they come in door with inherent credibility.

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-Is proven to significantly increase recall when advertised or marketed.
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With offline advertising such as radio, TV or billboard, a memorable easy to spell intuitive  address(Baby.com for J & J) will be recalled when the target is ready to visit your site. It’s possible someone doesn’t need  insurance the day they see the ad. Then in 6 months they do and it is proven that they are more likely to recall and visit a category site like InsuranceQuotes.com .  �
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- Leads to dramatic reduction of lost traffic due to lower retention and misspelling.
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- Provides the most authoritative Internet address even for proven brands.
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- Protect yourself from a competitor having the category domain.