What is Name Strategy?
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April 14, 2008
Name strategy answers the question, "What is the best way to leverage a domain
This is a question that is extremely important in determining the value of a
domain. Accordingly, name strategy is an integral component of the decision
process that takes place as a company acquires domain names or simply wishes to
achieve the highest possible valuation for existing name assets.
As Internet namespace markets mature, we see name assets becoming more deeply
integrated with, and reliant on, complementary spheres of influence.
What Spheres Influence Name Strategy?
Name Strategy can be broken down into three spheres:
- Internet Marketing - Branding, positioning, SEO, public relations
- Internet Business - Revenue modeling, distribution channels, operations
- Internet Technology - Software, hardware, languages and platforms
Of course, there are more components to each of the spheres than I’ve listed
Determining the appropriate strategy for maximizing the value of domain
assets is a multi-faceted skill that requires a broad understanding of several
disparate spheres of knowledge.
To the extent that the integration deepens between these elements, we will
see substantial increases in the value of domain names. In short, to a company
adept at operating within these spheres, a prime domain name is worth vastly
more than it is to an everyday domain speculator or reseller.
Add to this the leverage that is coming into the market in the form of domain
financing and leasing, and the stage is set for a global explosion in the value
of domain names.
The Coming Shake-Up
This explosion will not be coming without a complementary market shake-up —
where weak holders will be displaced by stronger, better positioned ones.
What does this mean for today’s domain name investors? It means that in order
to maximize the value of your portfolio, and indeed to merely maintain a
position where you can hold onto your portfolio for all it’s worth, you need to
take a hard look at your name strategy. You need to become the better positioned
company. For domain investors with serious names, this is serious business.
Trust Value vs.
Brand Value vs. Traffic Value
The bottom line is this:
Trust value is greater than brand value, and brand value is
greater than traffic value when it comes to name assets.
I’ll get more into what I mean by “trust value” (and why it’s absurd to value
a domain name based on its traffic value) in a later post.
But for now, the important point is that as these greater forms of value
begin to be expressed in the current market prices of domain name assets, we
will begin to see the emergence of entirely new market dynamics. We’re already
starting to see these changes, but it’s just the beginning.
Many domain investors speak about “development”. Unfortunately, there seems
to be a widespread misunderstanding as to what this means. It’s not a matter of
just “development”. Development is just one thing, one component of a necessary
strategic whole. Development is useless without a comprehensive strategy for
market entrance, growth, and eventual exit (or ongoing operations
On this blog I intend to continue to discuss exactly this: what the strategic
pieces are, and how to put them together to yield a comprehensive name strategy
that will keep you ahead of the game as this market throttles forward.
Why discuss this? Because it’s exactly what I’m doing myself, as I build and
position my own company, Electron
Interactive (Electron.com) to take advantage of the vast of opportunity in
the Internet space moving forward.