Why Does a Good Domain Name Cost So Much

By: Robert Thomson Click author's name for more of his/her articles

A few years ago, a good domain name was not worth much, a few hundred quid would have found you a short, brandable, memorable, gem of a name with quite a bit of development potential. But not any more, and with good reason.

Online Real Estate is being snapped up at an incredible rate, and the most marketable domain names and premier extensions like .com and .org are all but taken. The demand is high and supply low, so the rest is just plain economics.

In this scenario, if you need a particular domain name for your business and it is already taken, you might have to pay out a lump sum to get exactly the name you need. A great domain name goes a long way towards establishing a sizeable web presence.

The topmost domain name on your most wanted domain list possibly epitomizes all that your brand stands for, can be easily designed or fit into a logo, and possibly already gets a lot of traffic. All this translates into a high price, and it is a price astute corporations are willing to pay.

Some of the better known examples of domain names that sold at exorbitantly high prices are diamonds.com(7.5 million usd), business.com(7.5 million usd) and beer.com(7 million usd).

These names fetched a lot of value because the buyers were willing to shell out some serious cash to be able to control the kind of brandability and extremely high traffic potential these sites can fetch them. Stable and legitimate search rankings inflate the price of a "good" domain name.

And these are by no means the only domain names that sold for millions. Sometimes a site sells for a high price also because it has been developed well, boasts of impeccable and original content, and draws a sizable amount of traffic (read ad revenue) through links and affiliates.

The potential loyalty of user base and the their lifetime value is another important factor, because if a domain name already attracts loyal visitors on a regular basis it will never want for traffic or ad revenue. A good domain name that attracts traffic is also easier to develop into a flourishing website, and the asking price would naturally rise proportionally.

The corporate world has begun to see the value of internet advertising which is prospering due to an explosion in the number of internet users and the burgeoning popularity of online shopping. A potentially huge targeted audience can be reached, especially through avenues like Google Ads. This awakening towards the potential of internet advertising has further pushed up the value of good domain names.

With the internet increasingly taking a larger part in urban life, good domain names will continue to be snapped up at high prices. Just as a good location is great for the sales at a shop, a good domain name is practically indispensable if you want a fabulous website. It is this that sums up the high demand and the resultantly high price of a good domain name.

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About The Author: This article was written by Irell Quezada from www.namecake.com. A website that specialises in buying and selling Generic Domains and who offer expert advice on domain names and the competitive advantage they can give your business in the online marketplace.