I admit it, I missed out on hundreds of thousands of dollars in the late 90’s because I felt brands were more important that generic domains. I was very wrong. It’s a simple concept. People have to learn brands but already know the generic or vocabulary words. For the first 15 years of the Internet people used the toolbar and typed away. But as all things do, times have changed. Google has taken over the toolbar and more and more users are using search engines to navigate rather than roll the dice and typing in.
The following is my opinion, supported neither by data or specific facts. It’s merely a culmination of watching domain sales reports and auction results at Namejet and Godaddy and seeing obvious changes in prices. Generics continue to sell very well but many are being used for a different purpose than in the past. They are being used as brands rather than to sell the item the word represents. The Kayak.com approach. Brands that have nothing to do with original purpose of the word but rather because they are memorable. They are not being used to sell the item represented by the domain but being used because you’ll remember the word. Words that can easily become a brand without being too defining are in high demand. One word and two word domains that easy to remember are being snapped up at ever increasing prices.
What’s starting to cool are the product specific domains. BikeBrakes.com type names that can only be used for one purpose. To sell or represent that item. Kayak.com obviously can be branded for other uses but KayakPaddles.com is limiting. When someone asks me the value of a domain I often say it has lower value because it is limiting. Even if the limit can still be very profitable, it is still limiting. Limiting because the amount of buyers for that domain is reduced to the people that want to be in that business. Limiting because people aren’t typing in product names anymore. Limiting because Google is slowly giving away special treatments for exact match. A name that is neutral has no limit. It’s why names like Shout.com are so valuable. It means nothing so it can mean anything.
When I value a domain I look at two key components. How much money can be made with that domain? What will they sell, how high a priced item is it, and will the domain improve the sales? Second, how memorable is the word? Is it short, and is the domain limiting? It’s a whole other can of worms if its not a dot com because you will automatically be fighting the dot com from the beginning. You want to build brands and you don’t want to start from below ground level. Dot com is ground level.
In short. Generics are still the way to go but I think it can be described better than using the word generic. Domains that are one word and easily said, spelled, and memorized have always had value. But now there is a subset of names that can be branded into any type of business that are even more desirable. More desirable because the parking money is gone and the emphasis has gone back into the potential branding of the domain.