Hello Fellow Marketers,

Every time I mention “domain names” a couple people in the room tend to get this shocked and scared look across their face. Most of them, I find out, are old computer technicians or retired web developers. As they back away from the conversation the entrepreneurs and business savvy programmers crowd around with a look of interest.

The good news is that domain names are not the same “investments” they used to be. Rather than spending ninety dollars a year you can now spend nine – though the availability has diminished a fair bit. The scary, exciting, gamble of a truth is that you can actually register a domain name for under ten dollars today, find the right person a month later, and sell it for ten thousand. It does happen.

These are the top recorded domain sales of the year – notice that two of them took place yesterday! Realistically, these domain names would have been registered long ago and “aged” until someone was willing to sell. As you can see, the value of domain names is exploding.

It may seem a bit confusing but I’ve got the information to get you started. Everything you’ll need to know about domains into three broad categories.

1. Domain Name Length

Length is a major determining factor in many domain purchases made today. A couple reasons for this are because shorter domain names are easier to remember and generally easier to pronounce.

The market for short domain names is popular among resellers. Check out the NamePros.com Forum to see an active domain name community – mainly used by resellers.

I personally register short domain names for the aesthetic reasons, and because of the simple and secure golden rule.

Every combination of four letters plus the dot com is registered. So no matter with four letters you can think of – somebody owns that dot com. The availability of short domain names is shrinking and the value is growing. The golden rule is that almost all domain names will grow in value over time because of scarcity.

I know my college economics teacher would love that I’m bringing scarcity into the mix, but it plays such a fundamental role in appraising domains and it adds some sort of urgency to their acquisition.

2. Domain Name Relevance

You can have a short domain name but unless it has some relevance to a prospect – it will never get more than reseller values. Domain names are like virtual real estate, and having one that is descriptive is like having a beachfront property with an incredible view.

Relevance plays an important role in the domain name market a couple of ways. One paramount factor is keyword optimization for search engines. If someone searches “Shop Kitchener” and your domain name happens to be “ShopKitchener.com” you have an immediate – and permanent – advantage over all of the competition.

Having a domain name that you can optimize in the search engine can save a bundle of cash when you’re looking at internet or search engine marketing – and it’s an exceptional way to drive traffic to any web based business.

Another “relevance” concept is based on the brandability of a certain domain name. A domain name can be a brand – think Amazon.com.

Brandable domains are difficult to rate or appraise, for example Coke.ca wouldn’t make sense if the soda pop giant wasn’t around.

3. Domain Name Extension (TLD)

The third but still incredibly important point is about the domain name extension. Is it a dot com or dot net?

In recent months the amount of extensions went from your basic country specific ones to a whole new era of opportunity. Now private investors can register extensions, like dot market or dot hotels.

So you ask: what are you supposed to look for with so many extensions? What’s the best?

I’ve always been a strong believer that in order to succeed in business you should either be the first or the best at what you are currently doing or offering. I feel the same way about domains – why settle for the dot ca when you could have the dot com.

The extension “.com” has had more publicity, more acknowledgment and speaks big business better than any other extension.

If that isn’t enough then I have one more reason for you. If you own any extension other than the dot com, people searching for your site will tend to enter the dot com version and you will loose traffic.

Now that you know about domain names I want to tell you how you can gain a great amount for so little – using domains.

You can register domains at many registrars, Fabulous.com and GoDaddy to name two popular ones. They will cost you anywhere from $7-$10 a year to claim an available domain and then you own that little piece of the web.

Say you find a couple that are good names but you don’t have a use for them. Why not give them away?

That’s right, give them away. It only cost you ten dollars and if you give a domain name to someone that will benefit their business, or spike their interest – you’re getting much more back.