Friday, May 23, 2008

The right domain can boost or stifle your growth

By Jeremiah Johnston

Small businesses are moving to the web to help broaden their reach and lower the cost of operations. The challenges of doing this are plentiful, but beyond designing a website and building an e-commerce infrastructure, many small business owners struggle to do what is seemingly a simple task — find the right domain name that will attract new prospects and keep customers coming back.

Domain-name value is increasing because of the scarcity of premium virtual real estate. Test it for yourself: go to any typical web-hosting site and type in your company name or marketplace. Chances are the best “.com” domain names are registered.

Consequently, businesses and individuals are turning to the secondary domain market to buy names that are already registered, paying a premium for these quality domain names. In 2007, it is estimated that sales from domain names in the secondary market increased by 60 percent over the previous year. The popular .com and .net top level domains, while increasing by 24 percent in registrations in 2007, grew by an estimated 53 percent in purchases on the secondary domain market. As an added value to small businesses, web hosting companies such as 1&1 Internet Inc., the world’s largest web host by known servers, can work with brokerage services to help companies find an already registered domain name.

In order to maximize web traffic, small business might also consider purchasing generic or descriptive domain names to drive traffic to the main site.

Choosing the right web address
Before choosing the right domain names, the typical small business owner must be careful to purchase a domain name that will deliver significant ROI over time. Following are tips to consider when buying domain names:

• Country-specific or international: If your business is only active in a single country, it may be adequate to use a country-specific extension such as .us, .co.uk, or .ca. If you’d like to appeal to a global audience, it is best to choose a generic extension such as .com, .biz, or .info.

• Importance of keywords: If search engines are a major source of traffic to your site, make sure that your domain includes one or more of your principal keywords — this can help you get a good ranking on these terms.

• Risk of traffic diversion: Choosing the wrong domain name can result in thousands of lost visitors due to typos. To reduce this risk, avoid hyphens, numbers, misspellings, and exotic extensions. People should be able to figure out the domain’s spelling from the way it is pronounced. Yahoo, for example, is easy to spell.

• Length: Shorter domain names are definitely better if the domain name is going to be typed-in often. A shorter domain name means reduced risk of typographical errors, easier memorability, faster type-ins, and more flexibility in promoting the domain.

To ensure success online, small business owners must take the task of selecting their web address seriously. Too often, this is not the case. In 1&1 Internet’s recent “SMB Domain Choices Study” of 1,074 American small businesses 42 percent of companies surveyed spent the same time selecting their domain as they did sourcing minor equipment such as their coffee maker or paper shredder (less than 1 hour). Because a domain name can directly impact sales and overall site appeal, it is imperative that small business owners take the proper amount of time needed to carefully evaluate the pros and cons of their domain name wording.

 

Jeremiah Johnston is chief operating officer and general counsel at Cambridge-based Sedo.com LLC, an online marketplace for buying and selling domain names. Johnston also represents Sedo as a founding member of the Internet Commerce Association (ICA). He can be reached at 617-499-7200.