Branding and One-Word .COM’s: Why They Can Be A Goldmine And Where The Fools Gold Lies

As I’ve said a number of times this year I’ve shifted my focus to .COM when I am buying domains that I’m looking to flip or sell later on. For Development and Monetization I still like a variety of TLDs like .NET, .ORG, .CO, .ME, and .US. That being said, most of the domains I’ve purchased this year are two and three-word .COMs. When looking forward I’m always trying to find ways to tune my strategy and one of the changes I plan to make is to add a few good one word .COM’s to my portfolio. These aren’t to flip, but instead to hold and wait for the right buyer to find me.

This year I’ve received multiple offers on some of the two-word .COM’s that I own and all of these offers come from companies in the niche. It makes sense right? An online bookstore isn’t going to use TrackCredit.com as their website, just like they won’t use AmazonRiver.com either. However, bring it down to one-word and suddenly the name can be used for any brand in any niche.

If you look at successful online brands, so many of them go with a one-word .COM and many don’t care if the word has anything to do with their niche. Look at Kayak.com, you would naturally think this had to do with kayaking but it’s a travel site. Just think, if you added a word either before or after “kayak” it could only be branded in the kayaking niche, however as one word on it’s own, it can be anything.

Look at Amazon.com, this name was picked when Amazon was an online bookstore. Like I said in the example above, they would not have built their brand around AmazonRiver.com, or TheAmazon.com, as one word, on its own, it can be anything.

What about popular memory upgrade website Crucial.com. I guess you could say that having more memory for your computer is crucial but when I hear the word memory isn’t the first thing that pops into my head! Still, a one-word .COM that can be used for any brand.

I know this is not a major breakthrough for many of your reading this, but for some maybe it is! This is something that makes one-word .COM domains so unique. You don’t see any major brands running to build on a one-word .NET or .ORG, they don’t have the same branding power. I’m not sure Amazon.net or Yahoo.net would have seemed quite as legitimate without the .COM…oh and those Yahoo commercials would have to change since a big part of the branding was the word .COM.

Now this doesn’t mean I don’t see one-word .NET and .ORGs as good investments, it’s just a different type of investment. The most liquidity and highest potential resale price is in the .COM space. Most brands want to secure a .COM rather than a .NET or .ORG unless they’re a non-profit in which case a .ORG could work. While your one-word .NET could absolutely sell to a major brand or a new startup, there will be far more interest in the same keyword .COM.

Of course this does involve making larger investments and you do have to watch-out for Fools Gold. By Fools Gold I mean one-word .COMs that suck. That’s right, there are plenty of one-word .COM domains that just aren’t very good. I didn’t know this my first year in Domaining and bought names like Aggregately.com that no brand in the universe would ever build on.

With a one-word .COM you want a word that people know, people say, and that you could actually imagine people thinking-up as the name for their company in a meeting. Just think of a startup huddled around a table at a co-working space somewhere in New York or Silicon Valley. They have the next big idea, and they want to come-up with the perfect name, when they pick a name their first choice will be the .COM. I don’t know about you but I’d always rather be the first choice vs. second or third choice. As the first and top choice you have more leverage and can feel confident that if you get an offer you don’t like, more will be coming around the corner.

Don’t get stuck buying Fools Gold though, there are plenty of expiring one-word .COM’s and names listed on forums advertised as “Cheap One-Word .COM” that an end-user wouldn’t touch with a ten foot pole. Just think once again of the room full of entrepreneurs, are they going to think, perfect Advantageously is going to be the new name for our business – let’s go get the .COM! Probably not.

So yes, it will require more than a $69 opening bid at an auction and you may have to spend in the $x,xxx or $xx,xxx range but that doesn’t mean there aren’t lots of great deals around. By looking beyond domain marketplaces and auctions you might find real end-users who own domains they might be looking to sell. Make an offer and you might be surprised some of the deals you might find. Just avoid the fools gold, you can buy as many crappy .COM’s for $200 as you want, but remember, once you have ten you could have spent $2,000 on one, much better name.

Of course I’ll still be buying two and three-word .COMs next year, it made a huge impact and help grow our revenue to over 100% y/y growth and I’m going for the same thing next year. That being said I’ll be keeping my eyes open for a few more one-word .COMs I can add to my portfolio and further diversify my portfolio. In 2012 just like 2011, 2010, 2009, and 2008 our focus is on developing domain names into brands. This focus never changes, however our strategy around selling domains is constantly evolving and I’m learning new things every day. The switch to .COM made a major impact in 2011, now it’s time to take it to the next level!

{ 6 comments… add one }

  • Joe December 27, 2011, 2:02 pm

    Hey Morgan, I know what you mean when you talk about acquiring one-word .coms in your first year in domaining. I used to handregister names like Genuflected.com back then, just because they were dictionary one-worders, so I thought they had to have some value. Anyway mistakes are great because you absolutely need to them to grow your experience and knowledge.

    An awesome 2012 to you & Daina

    Reply
  • Don December 27, 2011, 3:31 pm

    If only I heard your wise words 2 days ago. I just bought unsatisfactory.com (on a reputable site) on the thought that one word must be better than 2+ word domains. Of course, I haven’t had the benefit of time to truly know how much of a failure it is. Nonetheless, I need to be more cautious with my purchases. If I can’t sell the domain within a few months of active promotion, I may setup a complaint/review site, get it to rank, then sell the domain + website for added value.

    Reply
  • Nadia December 27, 2011, 9:16 pm

    Morgan, what do you think about Elliot’s assertion that development can sometimes hurt sales (or at least diminish the number of offers)? I know most of your brands/sites are longterm investments that provide a steady stream of income, so perhaps you wouldn’t entertain the thought of selling them – but entire businesses are often acquired for much more than the domain alone would have been worth.

    I suppose sometimes developed sites can create a problem if not done well (bringing the value down, hurting SEO and/or brand reputation), and I think that’s part of Elliot’s point. There’s also the point that developed sites look a lot less “available.”

    1. Am I right in thinking that you pretty much know what you’re going to do with a domain (flip or develop) before you buy it?

    I guess what I’m asking is if you would take a gamble on developing a name you eventually wanted to sell, knowing that your efforts could possibly hinder its desirability down the line.

    Reply
  • Ricc December 28, 2011, 8:44 am

    Funny how you say, “I know this is not a major breakthrough … but for some maybe it is”
    I’ve gone thru several phases in my domaining experience, and although I never conciously thought about this to the extent that you’ve put it into words — I use to think the same thing and collect single word domains. However, when several of my two-word domains started selling quicker, I second guessed myself and changed my strategy. What I now learned is that those single word domains were valuable and sold for a good chunck of money — I just needed to be more patient and wait for the right buyer to come along.

    Reply
  • Warrior December 28, 2011, 9:38 am

    Morgan,

    I was researching domaining and stumbled into your site. I am learning new things about domain investing 🙂 with every new post.

    I will be watching closly all your blog posts to understand more of this industry.

    Could you give some good examples of oneword domains for newbie’s understanding…

    Thank You

    Warrior

    Reply
  • Morgan December 28, 2011, 10:03 am

    Great feedback everyone! Sorry for the delay in my response – please see answer to your questions below:

    @Joe – thanks and Happy New Years to you too!

    @Nadia – great question! Elliot is absolutely right, once you develop a site you can expect very few people to make an offer. The domains I develop are never intended to sell as the domain names themselves but instead generate income as real online businesses. The great thing about an online business is that liquidity is always there since there are always buyers for a profitable business.

    When it comes to buying domains that you want to re-sell as just the domain itself I don’t recommend developing it. I have plenty of domains that fall-into this category and it’s important to pick which path you want to take with each domain and follow it through.

    @Ricc – great comment and excellent point! Glad to hear this got the gears turning for you!

    @Warrior – welcome! Happy to have you here and I look forward to sharing my adventures with you!

    Reply

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