The value of a domain name depends on a range of different factors but just as with any other investment, the cost really comes down to who is willing to buy it.
Not all domain names are expensive and there are actually a lot that can sell for less than $100, but more specific or premium options are typically worth tens of thousands and hundreds of thousands of dollars.
Domain names ending in .com, in particular, are often very expensive because the extension has become practically synonymous with the internet. There are even experts who believe .com will always be the most prominent and sought-after domain name extension, regardless of the other specific, premium extensions that are coming onto the market.
While the price of premium .com domains can be explained by this popularity, does it justify spending so much money just to get a URL?
TeamworkPM is one of the most recent companies to indicate that it really does pay off to get the right domain name. The Ireland based online project management company recently bought Teamwork.com for US$675,000 (AUD$753,000) and rebranded the entire business around this domain name.
Information from TeamworkPM suggests this switch from a .net to a .com domain name is already paying off.
“For customer confidence we know how important a dot .com domain is,” TeamworkPM’s media contact, Bill Mahoney, says in a blog post about the transition.
“Since making the switch, existing customers have told us that as much as they’ve liked using TeamworkPM and as happy as they were with the features offered, the dot .net was always a bit of a stumbling block when it came to signing on the dotted line.”
Mahoney also notes that around 75% of the world’s domain names were .coms as of July 2013, emphasising the familiarity and confidence this particular extension can bring to a website, a brand and a business.
Making The Most of A Domain Name Investment
Although spending a lot of money on a domain name is not a new thing, what is interesting about the Teamwork.com case is that the company has also turned the purchase of this domain name into a marketing opportunity.
Major domain name purchases always attract some attention from the blogs and relevant news publications, but in this case Teamwork.com has also been proactive in letting existing and potential customers know how and why the change happened. Not only does the new website and blog outline the process, but Teamwork.com have also spoken to the media about the transition and what it means for the company.
“We have a great product but we haven’t been concentrating on marketing as much as we could,” co-founder and CEO Peter Coppinger says in an interview with Domain Name Wire.
“This domain is part of strengthening our marketing efforts. I think we can quadruple our sales in the next year with better marketing, and using this domain name is part of that.”
So rather than seeing the price tag as just for a domain name, in this case, making it about the entire business has proved to be a smart investment that will pay dividends in many ways.