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The true value of Geo Domains


May 19, 2008


 

Geolocation turns out to be hot and extremely challenging topic. Local Search and the “local” trend have been rapidly evolving and gaining popularity because of their huge potential for further development. A number of new projects aiming to leverage the geographic knowledge and to deliver value to end users are underway. To name a few: Brightkite, Fire Eagle as well as the recently announced Yahoo! Internet Location Platform, a collection of in-depth geo-location based APIs. Owing to this platform locations can be more smartly used.

An internet domain name that is the same as a city, a state or a country is called Geo Domain. Examples of Geo Domains are Atlanta.com, LosAngeles.com and etc. Since geographical names have instant name recognition, Geo Domains are highly preferable and valued.

Some time ago, it wasn't sure whether private operators would be permitted to take part in the Geo Domain industry, because municipal governments asserted that they were entitled to own the domain name with the name of the city. The courts rejected their arguments and private domainers tapped into Geo Domain industry.

As a whole, the geo niche has not been fully exploited yet. Though, we have witnessed some high sales of Geo Domains (recently, Bellevue.com was sold for $150,000 in a private transaction), there are thousands of unregistered local domains as well as many on the aftermarket at low prices. Nevertheless, it is not a good strategy for managing Geo Domain portfolio to register hundreds or thousands of Geo Domains and afterwards to sell them for profit.

The experts advise to register a couple of domains of well-known locations or to benefit from location + industry type Geo Domains. The most preferable extension remains .com. According to Associated Cities, between 60 and 80 percent of visitors reach city dot-coms by typing the name directly into their browser. Thus, the domains come with built-in traffic. To profit from this traffic, all the domainer needs to do is either to place ads or to develop the name.

Some owners of city dots keep parking their domains for profit and visitors stumbling upon the URLs can only see paid listings for restaurants, hotels and other local businesses, sometimes along with the local temperature and headlines from local papers.

On the other hand, some fully-developed geo domain sites indicate that a new era for the sector is at hand. Developing Geo Domains by providing a virtual representation of the locations is the key for success in geo domain industry. So-called "intuitive branding" is a great competitive advantage of city dots because the “brand” which is the same as the name of the city is already imprinted in the minds of the consumers. Word of mouth advertising in a targeted geo area is another great benefit. Geo Domains have a natural place within the architecture of local search, which is the fastest-growing category in Internet advertising. Properly developed Geo Domains have also natural advantage in generating relevant traffic. Furthermore, as the Mobile Internet usage grows, another great opportunity for Geo Domain owners will spring up if they develop mobile versions of their sites.

At the 2007 GeoDomain Expo, Ron Jackson, the keynote speaker stated: “Owning a single city domain puts the owner in a position to build a property that can be more important than any of that city’s newspapers, magazines, radio stations or TV stations. The domain can offer everything the traditional outlets offer – print, audio and video – and they can deliver it all over the globe at a minimal cost.”

There is no doubt that with the fast evolution of the local search and the great potential of local advertising market, owning Geo Domains is becoming a solid property which will prove to be good return on investments and quite a lucrative business.


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