AVAREN Blog Post

Should companies buy domains/ extensions beyond their .com?

by Matt Logan. December 2011

   After spending some time searching for the commentary of others on the subject and coming up dry, I decided to write this article to help business owners understand the ups and downs of spending money on alternate domains or extensions. Occasionally a business owner approaches me wondering if he/she should register an internet domain extension other than their typical ".com". If they already have the .com they may be inquiring about getting the corresponding:

.net              .org               .biz               .info

.name           .pro              .travel          .TV          or        .XXX

(For a complete listing of top level extensions and their intended purposes visit this link.)

http://en.wikipedia.org/wiki/List_of_Internet_top-level_domains

   Ultimately the choice concerning these purchases is business or brand specific and can’t really be made by anyone other than the business owner. Having said that I generally advise people not to make these purchases. I say this having watched business owners, myself included, spend untold amounts of money on unnecessary and/or unused registrations only to give up on them because a project didn’t materialize or someone tires of the expense. I once witnessed a business owner give up on 30 domains at once, having been paying on them the prior 4 years. As a result of this, I suppose I have become a little gun shy about registering domains unnecessarily.

   However, there are some considerations every business owner should be briefed on in order to arrive at a wise decision concerning these purchases. Some of these considerations are:

Protection from Squatters/Competition

   If you are truly concerned about protecting yourself from squatters or competition, making a few of these purchases for “insurance purposes” may prove wise. Unless you are G.E., try to keep these expenditures to a minimum and get a U.S. trademark if you feel you have a brand name worth protecting. Acquiring anything beyond the ".com", ".net", or ".org" should probably not be considered unless for a specific business purpose. In our case, we haven’t bothered registering the ".net" or the .org of our domain although we do possess a trademark.

.XXX

   I probably don’t have to say much here as you probably already know if your business or product name would be susceptible to the demented minds of adult film producers. Registering these domains is pricey at $99/year currently.

Typo Squatting/Misspellings

   Typo squatting occurs when a domain squatter attempts to find common misspellings of a domain name and route the accidental traffic to a site of their choice. This generally only comes into play with really significant brand names. In our case, because we fashioned a new word for our company name, I went ahead and registered a couple of the other variations I could imagine getting used and directed these to our home page.

Expanding into other territories

   You’ve probably already noticed the abundance of domain extensions available for people and businesses in other countries. Examples of this might be .ca for Canada or .cn for China. Pfizer I noticed has a Chinese affiliate and thus the need for a ".cn" domain with a different website in the Chinese language. In most cases small business owners should probably save their money and avoid registering these domains.

Speculation

   I’ve purchased a few domains over the years for speculative purposes. The highest offer I’ve ever received for a domain was $5,000, but they do go for more all the time. For more examples of real world sales check out this link.

http://dnjournal.com/archive/domainsales/2011/20110302.htm

Future Projects

   If you are a creative person like me you probably come up with great new ideas all the time. It can be very tempting at the end of your brainstorming session to immediately try to register domain names related to your brainstorms. From personal experience I would advise against this. Wait at least a day before spending any money on another registration.

   I was once sent an e-mail by a business owner after one of his apparent brainstorming sessions. He had registered 24 domains in a single night. A little prudence in this regard might have saved him some or all of the $360 he spent that night in 1 year registrations which ultimately went unused.

Costs

   After considering some of the possible reasons why a business owner might want to register additional domains or extensions we should next look at the cost of this “insurance”. For this purpose let's use $15 as the standard fee for an annual registration (although fees can vary wildly depending on extension). Last time I checked, the “.co.uk” extension was  $30/year.

Example Expenditure

   Often when considering a domain purchase, I like to look at costs from a decade long perspective. So...

3 registrations @ $15/year = $450/decade, versus $150 for the same period for 1 registration.

Needless to say, if you don't feel that strongly about a domain before you make the purchase, you will likely be especially sour  when it is time to pay the registration fee once more.

What happens when a registration lapses?

   Regardless of whether you allow a registration to lapse or if it happens accidentally, in many cases you will soon be at the mercy of another group of speculators via an auction for your domain (You will not get notifications for this auction). Typically these groups are either looking to capture the domain's future traffic to display advertisements or they may wish to sell the domain back to you for a handsome profit. A somewhat recent example of this happening was with the domain name http://cablefarm.com. In this case the domain was picked up by http://buydomains.com, a seemingly well organized concern that now wants $850 for the domain. A quick browse through their inventory turns up domains selling for tens of thousands.

   In these cases you may actually be better off having never registering your idea in the first place. If you do not register a  domain name, there may be some chance that no one else will have the same idea within the near term.

Conclusion

   The "insurance" isn’t terribly expensive as you can see by the $15/year per selection price tag, but if you go beyond a handful of registrations the costs can begin adding up in a hurry. In the end only you can decide whether or not this “insurance” is necessary for your business or brand. Remember to put some time between your brainstorming sessions and the registration of new domains. The notion of snapping up a registration before others get a chance is a psychologically compelling one, probably because the thought of losing the registration to another person can be frightening. However, take my word for it and wait 24 hours. The domain will still be there tomorrow.

A Note on Phishing Scams

   Speaking of “.cn” domains, there have been rashes in recent years of unscrupulous companies sending business owners notices to lure them into registering alternates of their domain name in China or elsewhere. They often use language designed to frighten business owners into “getting these while you can”. On more than one occasion I have received notices from a Chinese concern informing me that "another party was beginning to take an interest in our ".cn" variant...and that I had better "act quickly". Shred these notices as the companies are unscrupulous and thus we would not want to do business with them anyway. If you require a foreign domain name, by all means register it through your preferred registrar.

Further Reading

   If you would like more information on Cybersquatting, the potential legal resolutions, and notable cases in history; Wikipedia has a nice synopsis at this link. 

http://en.wikipedia.org/wiki/Cybersquatting

   A great article on what to consider when choosing a brand name.

http://stylestar.com/content/stylestar-article-2005_03_17_2408.htm

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