What is a Domain Name?

Simply stated, a domain name is an address on a globe we call the Internet, or World Wide Web.

The Internet is like a Planet

The Internet, as we use it today, is like a planet in the galaxy.  Parts of it are heavily populated and robust.  Other parts are very sparse and have proven to be relatively infertile.  It is broken into different segments, identified by the letters to the right of the second “dot” which are called domain extensions.  (e.g. www.google.com, www.craigslist.org, www.injury.co, etc.)

Domain Extensions are like Countries

The Internet we access currently has 280 domain extensions, which function in many ways like countries do on our planet, Earth.  They have many similarities, but also have their own individual rules.  “dot-com” is the most recognized and busiest domain, much like the United States.  Some domain extensions are private and/or exclusive.  Individuals and businesses are not permitted to own property on them, as they are reserved for specific entities.  Examples of these extensions are “dot-gov” and “dot-edu.”

Domain Names are like Addresses

A domain name is a specific address on a domain extension.  The address for this website is Dotvestor.com.  Similarly, the address for the United States White House is 1600 Pennsylvania Avenue, Washington, DC 20515.  Each exact domain name (address) can only be used once per domain extension, but can be used repeatedly over several domain extensions.  So, while there can only be one Dotvestor.com, there can also be a Dotvestor.net, Dotvestor.org, Dotvestor.us, Dotvestor.biz and so on and so on.

Websites are like Buildings on addresses

When a domain names has a website on it, that website functions like a building.  When a website sits on domain name it is usually referred to by that domain name.  For example, when you go to Amazon.com, you don’t expect to see a blank page associated with the domain name.  You expect to see a large and glorious website with all of the things you could ever want for sale.  That website functions as the building that sits on the all-important domain name.   Some websites, like Google.com, also function as highway with built-in GPS - enter what you want and it will tell you where to go and provide you with a very quick route.  We could go on and on with the analogy, but I think you get it.

Pages on a website are like Apartment or Suite numbers

Getting to the correct website is like getting to the correct store, though.  Often, that is not enough.  Most websites have a directory in their front lobby (i.e. home page) to help direct you through their store.  For example, if you need a book on gardening from Amazon, you don’t just go to Amazon.com and look through everything they have for sale on that one page, find the book you want and then click on it.  Instead, you go to Amazon.com, look at their directory (or electronically search their directory) and then click on a link that brings you to a page within the Amazon.com website.  Just like an apartment building may include Apartment 1809 as an address for one specific tenant, the website also has specific addresses within the domain name.  The Amazon.com example may create the address Amazon.com/GardeningBooks.  You will note that like “Apartment 1809”, Amazon used “/GardeningBooks” to distinguish that location from all of its other locations.  (Note: website pages can also be assigned to the portion of the address to the left of the first dot.  i.e. Apartment1809.Rent.com or Rent.com/Apartment1809)

Electronic Real Estate is more versatile than Physical Real Estate

Physical real estate comes with a lot of rules and restrictions.  You have zoning restrictions – you can’t build certain things in certain places.  You have size restrictions – your lot is only so big.  There’s also aesthetic considerations – does your building fit in with its neighborhood?

Electronic real estate is very much different.  You can have whatever content you want on virtually any address, so long as it is legal.  You can have as big a website on your domain address as you can imagine or no website at all.  Your electronic real estate can have an infinite number of mailboxes for communicating with others.

As you recall, domain names are unique.  There can only be one.  However, websites do not need to be as unique.  A website may have several different addresses simply by forwarding a domain name to another domain name.  For example, one of the larger websites on the internet is Craigslist.org.  However, if you go to Craigslist.com, which is a completely unique domain name, you don’t get a different website.  Instead of unnecessarily building a duplicate website, the folks at craigslist simply redirect you to their one website.

You may not be that impressed by that example, but imagine this.  You want to build an online shop that sells clothing.  For our example, let’s just assume you bought Clothing.com.  You notice a lot of your customers are buying your private label dress shirts and you want to capitalize on that.  Further, half those that buy your shirts also buy your dress pants and about 90% of the people who buy dress pants also buy dress shirts.  Let’s say you have decided to direct a marketing campaign just at those two items.  As part of your campaign, you buy the domain names DressShirts.com and DressPants.com.  So what are your options?

Build two new websites – One that sells shirts and one that sells pants
Redirect these two new domain names to your Clothing.com homepage
Redirect these two new domain names to Clothing.com/DressShirts and Clothing.com/DressPants respectively

Let’s go back to what we know about your customers.  We know that if they buy one of your items, they are likely to buy the other.  Getting them to your page, where they can find both, is a primary objective, so option #1 seems like a wasted opportunity.  By virtue of the fact that these new customers are going to the more specific domain names, we already know they are looking for a shirt or pants.  The Internet is largely about convenience.  If they want dress shirts, do you think they want to be dumped into the lobby of your store or do you think they want to go directly to dress shirts?  They most likely would appreciate being brought directly to the dress shirts page, so redirect the domain name DressShirts.com to your page Clothing.com/DressShirts.  If they want to look around the rest of your site, they will throw a couple shirts in your website’s shopping cart and continue looking around.  Best of all?  Your customer got what they wanted and you didn’t have to incur the cost of building two new websites to frustrate them.

Sometimes, you just get lucky and have a product of general mass appeal.  In that case, you may want to simply redirect a domain to your website’s home page.  Imagine you own the domain name Cars.com.  Things are going well, so you buy Car.com and Auto.com.  These domain names are so broad and general that you would be just fine bringing them to the main lobby (i.e. homepage) of your site, Cars.com.  Imagine it this way.  You built an amazing store at the address of Cars.com.  You have added two new locations at two new addresses, but rather than building new stores, you just tossed new store fronts (with different addresses) on your existing store.  Savvy marketers will do this and create something called a landing page.  A landing page is an entry point to your online store where customers enter your website through a special entry page instead of just your site’s main homepage.  By using landing pages, you can see what volume come to your store through that special entry.  You can use that information to see how effective your various marketing efforts are, allowing you to focus on the most successful ones.

Electronic Real Estate has much cheaper Property Tax than Physical Real Estate

Maintenance costs for real estate can be expensive.  Even an undeveloped piece of land could have real estate taxes of hundreds of dollars each year.  The registration fee (a domain name’s version of property taxes) for a “dot-com” domain name is almost always under $20.  In fact, there is also no tax punishment for success with your domain name.  The registration fee for Amazon.com can be the same as it is for SallysHairCareAndAutoSupply.com.  This makes maintenance costs for domains very affordable once you own them.

Location, Location, Location

A common question to new domain investors is, “If you can build any website on any domain name, and the registration costs are more or less the same, then what makes one domain name worth so much more than another?”

The answer to that is both simple and complex.  We will start with the simple part.  A domain name, like an address, can say a lot.  Imagine the difference between PremiumDiamonds.com and FakeDiamonds.com.  Some names are inherently valuable, like Cars.com.  Other domain names, like Twitter.com, meant virtually nothing until their owners built an invaluable website. 

As you can see, the words used in a premium name matter… but so do other things.  For example, the domain extension.  Generally speaking, “dot-com” is the gold standard for domain names.  But sometimes the “dot-com” version of the name is already gone.  For example, we have Injury.co listed in our portfolio.  Is Injury.com more valuable?  Without a doubt!  But that name is both taken and would cost millions. 

All things being equal, shorter domains are better than longer ones.   For example, BSA.org is much better than BoyScoutsOfAmerica.org.  However, you have to be careful because shorter domains are only better if you can make them tie to your product.  BoyScoutsOfAmerica.org, for example, is much better for them than NXPQ.org, which is shorter but means nothing.  Probably more valuable than length it pronounceability and ease to spell.  A longer domain name, like GoBetween.com is better than Liaison.com.  You also need to look at unintended consequences with your domain name to make sure the collection of names does not also spell something else, like SpeedOfArt.com or ITScrap.com.

Then, there is the value of the website, itself.  Some of the best websites drive traffic despite not having a great domain name.  They drive that traffic because their site is so awesome, consumers will do the extra work to get to it.  When you have an awesome website, you can build it anywhere and enjoy some success.  Then, the only question left is how much more could you have if you had a better domain.

So how do you know what is best for you?

It really boils down to marketing.  Your domain name is your address.  Do you want your visitors to think your site lives in a nice, safe neighborhood or in an inexpensive, frugal neighborhood?  Can an easy-to-remember domain save you marketing dollars because consumers can retain it from the time they hear it until they use it?  Many folks, particularly in real estate, are conditioned to make their name the brand.  That’s great when you have a relationship with people but it doesn’t work as well after the first meeting.  If a stranger says to you, “Visit my website at JimRichardson.com,” you’re not going to remember that when you are at home 6 hours later.  But if he says, “I know you want to buy a home.  Come to my website BuyingSeminar.com and register for a free class on how to maximize the value you can get when you buy!” you’re much more likely to remember because you want to attend the seminar on buying.  Jim will have plenty of time to drive his name home at the seminar.

What do I do next?

Select the domain that is right for you and send us a message through the Make an Offer tab above.

What if I cannot find the right domain for my business on here?

We can function like a broker for you to find a great domain if there is not one in our inventory.  Send us an email at Broker@Dotvestor.com and let us know a little bit about your needs, including your budget.  We will return a series of options for you and their estimated cost.

how are domains like electronic real estate?