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Making Domains Your Business – Part 2
#1
Negotiating to Buy or Sell a Domain

When I was building yourlocalpages.biz, I wanted to build it on a brandable domain. I made a list of several domains that I thought were great choices. If you limit yourself to one choice, or if you fall in love with a specific name, you lose your advantage over the sellers. If you have several options to choose from, it's much easier to walk away from the negotiations if you don't like the price.

When I was getting started, I began with a sizeable list of domains, made some initial enquires, and eventually whittled down my list to two choices: yourlocalpages.biz and jumboads.biz.

Domain brokerage services are another way to approach a transaction. On a number of occasions, we have acted as an agent for domain buyers and sellers who either lacked the time to conduct the negotiations or wished to remain anonymous. Depending upon who you are, or who you represent, the price of a domain that you want to purchase may easily slide up the scale behind the scenes, so it often makes sense to be represented by an independent party. Alternatively, you could create a portfolio website where you list domains for sale -- there's probably even a market for online estate agents which list domains for sale on behalf of others, like BigTicketDomains.com.

How to Avoid Being a Cybersquatter

Cybersquatting is one of the most controversial topics among domainers -- you can't have a conversation with a domainer for very long without cybersquatting being mentioned.

However, there is in fact much disagreement about exactly what cybersquatting entails. Most people would agree that if you register a domain with the word "Microsoft" in it, that would make you a cybersquatter. On the other hand, if you wanted to build a web site about a rainforest in South America, and included "Amazon" as part of the domain name, few people would
suggest that you were cybersquatting.

The grey area lies around cases where someone registers a domain with "Amazon" in it, but doesn't develop it -- instead, they attempt to play off Amazon.com's brand. Is it cybersquatting if you were to register AmazonBooks.com and then try to sell books about the rainforest?

Beyond Dot Com

Based on the examples we have used so far in this blog, you've probably noticed my heavy predilection toward buying .com domains. Do I also recommend buying domains with a different TLD? Certainly we include a good number of and .org domains in our own portfolio. There are a number of reasons why you'd go with the .net or .org domain. If your goal is to build a site that will rank for a specific keyword, and you anticipate only attracting search engine traffic to that site, a .net or .org should work fine if the .com is not available or would come at too high a price. Traditionally, .net domains are evocative of networks, and the .org domains of non-profit organisations. If your goal is to give the impression that your site is associated with a network or a non-profit organisation, choose a .net or .org respectively. I.net the impression that your site is associated with a network or a non-profit organisation, choose a .net or .org respectively. I don't usually recommend the .info domains, as spammers have abused them so heavily due to the low registration costs.

However, a very nice keyword domain might work out fine for you and can usually be had at a small fraction of its .com equivalent.

Another category of TLD that's worth your consideration is country code domains. There are some compelling arguments for using a domain with a .ca, .de, .pl, and so on. Obviously, if your target market is a specific country, the country code TLDis a natural choice. It signals not only to your target market, but to the search engines, that this content is meant for the people living in that specific country.

You may have seen some alternative uses for these country -specific domains -- names such as del.icio.us and caboo.se are cute uses of the country code domains that spell a word. I typically wouldn't recommend them, because they can cause a lot of confusion, and in a case like caboo.se, I wonder how much traffic their success drives to caboose.com. On the other hand, it's difficult to measure how much of these sites' success could be attributed to the 'cute factor' of their domain. If you could somehow control the .com version of the domain, it could be a win-win situation. Otherwise, step into country code domains with extreme caution.

Conclusion

The interesting thing about the domain market today is that it's both a buyer's market and a seller's market. For the huge majority of domains being registered by would-be players in domaining, it's definitely a buyer's market. One of the reasons that "dropped domain" lists are so long is that so many of these domains were registered on a whim, but should never really have been registered to begin with (a sin of which I, among many others, are also guilty). It's the rare domain that truly commands a high price -- almost all of these rare domains have already been registered, but you'll find that many of the domain marketplaces on the Web are littered with tens of thousands of almost-great names. It takes a lot of digging, but the gems are out there.
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