Richard Hallock and Andrew Miller
Recently, there has been a major acquisition of internet real estate in the form of premium dotcom domain names. NFTs.com bought him for $15 million and HubSpot bought his Connect.com for his $10 million. Over the past few years, exact match keywords have become an important and valuable digital asset, transforming the way premium domain names are evaluated.
In the days of BG (Before Google), most people navigated the web by typing keywords or domain names into their browsers. Having a world-class domain name and brand was like owning a “television network,” but global and without walls. Initially, the focus was on generic one-word domain names representing large global categories, such as Sweepstakes.com and Home.com.
A new type of internet real estate has become incredibly valuable these days and plays a strategically important role for brands and start-ups. These are known as “exact match” domain names, words that describe strong brands such as Extend.com, Gala.com, Universal.com, Iconic.com, First.com, Recuperate.com, Gravity.com. To illustrate this, here are links to exact match domain name acquisitions by his leader in the market and his study of the most successful founders and executive cases.
How Businesses Get Exact Match Domain Names
In the early stages, venture-backed companies often add words to domain names, even when brand is just one word in a strong dictionary. For example, Extend, a successful guarantee company, originally started as HelloExtend.com. Woody Levin, his experienced CEO and founder, said that taking the company’s exact match domain name, Extend.com, and removing “Hello” was his most strategic move. This was before we quickly realized that there was one.
Another tactic some companies use is to use non-.com domain names such as .io or .xyz when .com domains are not available. The problem with this is that customers may visit the .com domain name instead of the .io or .xyz versions and end up on the wrong site. Another problem is important emails being sent to the wrong address. Ultimately, businesses may need to acquire .com domain names, but negotiations may be in a precarious position.
Finally, some companies make the decision quickly to acquire an exact match domain name asset. Recent examples of this are Wonder.com and Candy.com, both of the internet age Led by the smartest operators and investors.
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Exact match domain value
If you are a single word brand and product, having an exact match domain asset is the single most important investment and decision you can make, both offensively and defensively. Strategic.
Consider the “Super Bowl” analogy. Some companies can spend his $8 million or more on his one 30-second commercial for the Super Bowl. If it works, there’s a return on investment, and if it doesn’t, it hits that company’s income statement hard.
For a similar cost, the purchase of a perfect match or categorical .com domain name is a valued, amortizable and resaleable investment while adding exponential enterprise value and utility to your business. You will have the asset of the contrast table. The same executives and investors who shun seven-figure domain acquisitions are probably using their income statements to advertise forgettable, non-matching domain names all over the internet.
Domain Names—Vital Business Assets
There is an old real estate cliché about the importance of being located in the best real estate: “location, location, location.” Your brand and the address to access it online are your company’s internet assets. It’s your address to the earth.
Exact match category domains provide businesses with authority, credibility, conversions, and clicks (“listen once, remember forever”) while also being an investment that measures value and return.
Remember this very important fact: there can only be one exact match .com domain name. It is the rarest of assets and therefore the most valuable. Once it disappears from the market, it is almost always gone forever. Not going to market can have a significant impact on your business in many ways, including marketing, branding, fundraising, and ultimately future sales.
Related: Critical Steps to Getting a Great Domain Name
About the author
Richard D. Harroch is Managing Director and Global Head of M&A for VantagePoint Capital Partners, a San Francisco-area venture capital fund. He focuses on internet, digital media and software companies and is the founder of several internet companies.see his full bio Visit AllBusiness.com.
Hilco Digital Assets Managing Director Andrew Miller said: Hilco Global The company is a leading investor and expert in digital assets. Andrew founded leading marketing firms CreditCards.com and he InsuranceQuotes.com and is an early investor in Bored Ape Yacht Club NFT and Thrasio.connect with him LinkedIn.
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