Why Some Domain Names Sell for Millions

900,000 USD for great.com

30,000,000 USD for voice.com

300,000 USD for ncc.com

During the first quarter of 2019, domain sales reached 9.5 million dollars on the second-hand market!

The fact that each individual domain name always is unique creates a strong demand for attractive wordings, and on the second-hand market, some domain names can be sold to new owners for several millions.

The domain names above, along with their price tags, are examples of domains that have switched owners during the last 18 months. They are a testament to the attractiveness of owning strong and communicative domain names.

But what is it that makes it possible for domain names to create such a value for companies? We list a few of the most common reasons below.

1. To own an attractive name for a new brand, product, or service.

A domain name is a unique address online; it is your identity and your digital brand. To have strong and communicative domain names will ease your work when launching and building your brand. Strong domain names are premium – and the price tags above are proof thereof.

2. To own the same name under another top-level domain.

As an example, if you already own a name under the .se top-level domain, it could be wise to acquire the .com domain, especially if you have an international focus. .com is the most registered and established top-level domain on the market today. During the first half of 2019, as much as 74% of all transactions on the second-hand market were for .com domains.

To ensure that your visitors end up on the right website, and to prevent someone else from affecting the credibility of your brand, it is important to hold the most common top-level domains. It is also important to own the country code top-level domains that are relevant for your brand, now as well as and in the future.

3. To shorten the domain name.

To shorten a domain name and to simplify a digital brand is a common wish that fuels domain name purchases.

For example, it could be that “group” is part of the original domain name, but the owner wants to own the domain without “group” as well, because it is really that name that is being used the most. Short and simple domain names are easier to communicate.

4. To find a descriptive name for a brand or a marketing campaign.

This is much in line with what has been stated in the first point. The value of a simple, short, and strong domain name should not be underestimated. It makes a big difference if a person quickly understands how to pronounce and spell your domain name – compared to if you need to spell it out in order for the person to find it. We usually refer to the so-called “radio test”: a good domain name should be easy to pronounce, easy to spell, and easy to remember.

5. To proactively protect the business against brand infringement.

The right domain names are important tools that help businesses protect themselves against brand infringement. So-called “squatting” (registering domain names that are similar to someone else’s brand for personal gain) is not a new phenomenon, but there are still several businesses that need to spend unnecessary resources to reactively fight it. Therefore, it is important to be aware of which domain names could be used by others to abuse your brand. The foundation for a smart domain strategy is to be able to map out which domain names are needed, and why, to ensure cost-efficiency and a maximisation of the portfolio value. To take care of your brand’s credibility, it is required that you as a brand owner are in control and have an ongoing overhaul of domain registrations that could come to affect the brand.

Is there a domain name you want, but it is taken? Dotkeeper has quickly risen to be one of the leading players in acquisition services on the second-hand market. We have several years of expertise, and a large global network that helps us secure good deals for our clients. Contact us and we will be happy to tell you more!