The Domain Name Brain Drain

Recently, word came out that the owner of Hell.com was putting the domain name up for auction. Asking price: $8 million (US$). While most businesses are not likely to be interested in that particular domain name, the asking price does call into question the entire practice of paying big for domain names in a world where technology can change the landscape overnight.

Last November, Web incubator eCompanies set a domain name price record when it plunked down $7.5 million for Business.com. At the time, eCompanies trotted out marketing expert David Aaker, who said that with Business.com in its pocket, “at least 75 percent of the company’s brand building effort has been done.”

Three-quarters of the brand-building effort with one cash outlay? Sounds almost too good to be true. Business.com, meanwhile, is still being built.

More recently, HitDomains extended its planned auction of such business and financial domain names as Pay.com and Cash.com into mid-May. Why the apparent reduction in interest? It could be because it will not be long before your domain name matters a lot less.

Mobility Matters

If more than half of all Internet traffic ends up moving over wireless devices within two years — as predicted by International Data Corporation (IDC) — will users be typing entire dot-com URLs into their handheld devices and cell phones? It seems unlikely.

Still, enterprises remain willing to pay for the best names. California-based GreatDomains said it has received a $10 million bid for America.com, but is holding out for at least $30 million.

Justifying that type of upfront outlay would take some serious number crunching. And any calculation of the future value of a domain name — whether a bankable brand name, a catchy phrase or a two-letter URL — has to take changing technology into account.

Smarter Technology

Look how times have changed. Just a couple of years ago, a single missed backslash would trigger an error message. Now, keywords and smarter browsers mean that anything close will usually land users where they want to be.

Plus, the best seems yet to come. Browsers can already “remember” a URL from just one or two characters, and bookmarks eliminate the risk of stumbling into a pirate site. The rise of portals will continue to make domain names and catchy URLs equally irrelevant, especially in the e-commerce world.

Alternatives.com

There is one other fly in the dot-com ointment: alternative domains. While experienced Net surfers still expect every address on the Web to end in dot-com, thousands of people get online for the first time every day. New users are much less likely to be wary of the offerings of new domains such as dotTV, which, incidentally, says the current top bid for free.tv is $100,000.

Just this week, MarketPlace Domain unveiled a new top level domain (TLD) of “.MP,” which the company said it plans to reserve for brand names — so that consumers can be assured they are reaching the real thing when they access a site. The company also said it has developed a new technology to help shoppers find authentic brand name products on the Web.

Dot-MP addresses are a lot less expensive, as well. In fact, when bought in bulk, registration can cost under a dollar per year. With an alternative like that already available — and who knows what else just around the corner — domain names with million-dollar price tags could sit on the auction block a while longer. Which is right where they belong.