Shopping in the Domain Aftermarket

Any IT manager tasked with finding a new Web site domain name in the last 10 years or so has probably noticed the best ones are taken. But thanks to a recent buying spree (new domain registrations were up 32 percent in 2006, according to VeriSign), the pickings are slimmer than ever. If you need a quality domain for a new brand or for a microsite, perhaps a trip to the domain aftermarket is in order.

“There are a lot of names out there that are owned but aren’t being used, and that are available on the aftermarket,” says Warren Adelman, president and chief operating officer of the world’s largest registrar, GoDaddy.com. Through exchanges such as fabulousdomains.com, greatdomains.com, sedo.com and afternic.com, you can browse through thousands of quality domains that are available for sale.

But be wary: Some markets have a reputation for posting ludicrously high prices. Consider these tips to help you find the best deal:

Negotiate: Don’t be afraid to haggle. Dan Warner, Chief Strategy Officer of Brisbane, Australia-based Dark Blue Sea knows a thing or two about domains. His company holds 550,000, the second largest portfolio of domain names in the world. He suggests a little negotiation can go a long way. “About half the time people actually pay the listed price, and about half the time they actually negotiate the price and get it for less,” he says. “A good guide is 20 to 30 percent less if people actually contact the domain owner.”

Go Natural: For years, domain speculators have known about natural search or direct navigation. This is a method of searching the Web by guessing at a likely URL and typing it in. For example, someone looking for earrings might visit diamonds.com expecting to find an electronic commerce site. Similarly, floridafishing.com may be a great domain for you if you happen to run a local tour outfit in Tampa Bay. Use Overture’s free search tool to determine how many times those keywords were searched in Yahoo last month. This will give you an idea of the popularity of a search phrase. Natural search volume is usually the most significant factor for domain evaluation.

Use Overture’s keyword selector tool to determine the popularity of search phrases.

Get an Appraisal: Companies such as GoDaddy.com and Sedo.com offer domain appraisal services. “One type is an automated process and another is human intervention where our experts will look at the domain and evaluate it,” Adelman explains. The review includes factors such as length, extension (.com, .biz, and so on), the presence of hyphens or numbers, as well as statistics on desirability, uniqueness, traffic rankings and more.

Buy Sets, Not Singles: Don’t risk losing traffic to a cybersquatter who snapped up the .net version of your domain because you didn’t want to spend an extra $10 per year. If you find a good .com domain, also register the .net, .info, and .biz extensions. If you do business outside of the United States, consider registering regional domains such as .ca in Canada and .co.uk in the United Kingdom.

.Com is King: Despite the variety of new extensions, the business world still looks for .com first. It’s a mistake to put off negotiating for the .com version of a domain. Palo Alto, Calif.-based news aggregator Topix launched with the Topix.net domain, and as their success grew, the price tag of their .com equivalent rose as well. They finally bought Topix.com for $1 million earlier this year.

If you’re not finding good value in the aftermarket, consider these options:

Buy a Site: There are plenty of sites with great domains that haven’t been updated since 1999. If you know of any that are relevant for your business, you might try contacting the owner and asking if the domain is for sale. A negligent Webmaster may be all –too willing to part with the site for a price much lower than what you’d pay in the aftermarket.

Wait It Out: Some great domains don’t get renewed, leaving them briefly on the market for anyone to snap them up. If you’ve got your eye on a few domains that seem likely to expire (stale site content or a 404 error page is a good indicator), you can use a paid service such as the Domainalert Pro service available from many registrars to track your domain and register it when it becomes available.

Use Register.com’s Whois Lookup to find the owner of a domain and the expiration date.