Companies Buying Domain Names For Millions of Dollars Get Edge Over Competitors

October 13, 2004; 01:02 AM

(DomainInformer.com) - October 13, 2004 - Overall this year has been the most profitable one for the domain name industry. There have been some record sales made in the millions, hundred of thousands, and some in the thousands of dollars. So, you are probably asking yourself, why would anyone pay so much money for a domain name? Why not register another domain name for as little as $7 to $8 dollars? Why would a business invest so heavily in a domain name? Are these domain names really that valuable? In order to answer these questions, we first must understand what separates domain names with potential from regular ones.

Domains with potential have many characteristics that separate it from regular ones. They must have keywords that appeal to a specific target market. These domain names must possess the power to be memorized and be remembered by people. In addition, they should have the ability to be associated with the product, service, or message that are being offered. It would be quite beneficial if these domains were made up of words that would enhance their listings in search engines.

We can now focus on the questions stated earlier. Businesses paid top dollar on the domain names because they had potential. These domains had a certain level of marketing and advertisment with an established level of traffic and popularity. This translated to little or no advertisement needed to give exposure to these domains. These businesses immediately established an Internet presence when they began using these domains. When you register a domain name, the main question would be if it has potential. If it does, it then needs to get exposure. Marketing and advertising is necessary in order to establish traffic and popularity. A company that has a good domain will always be remembered and as a result become an established market brand. This translates into orders and sales. As a result, these businesses acquire a big advantage over their competitors because they are always present in people's minds, while their competitors end up forgotten.

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