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Wednesday, April 25, 2012

Domain names are used to identify websites on the Internet; it is the name that a visitor seeking access to a website uses, to gain that access. Domain names are divided into two parts: one part is the name bearing part and is referred to as the second level domain, for example the business or institution; the second part – ‘dot com’ is referred to as top level domain (TLD). There are different TLDs apart from ‘.com’ such as ‘.gov’ or ‘.edu’ for example. Businesses in the UK use the TLD .co.uk to signify business operation in the UK.
At the start of the Internet revolution, top level domain space was categorised into three groups: countries, multi-organisations and categories. There was one more group, the temporary group that consisted solely of the initial DNS domain prior to making the transition to a more permanent domain name. As the Internet evolved, it became necessary to include more top level domains of a generic nature. In the reshuffle, domain names were modified, generalised or assigned to special organisations.




The World’s Most Expensive TLDs

Business.com was considered the reigning champion among domain names; it was also the most expensive domain name since it was sold in 1997 for a whopping 7.5 million dollars. This record last a long decade until Gary Kremen decided he wanted nothing more to do with the adult entertainment industry and disposed of his Sex.com for nearly double that amount; he sold it for 14 million dollars.
Current market prices for Internet domains are not anywhere as high as these mind-blowing figures. These figures were possible when the dot-com industry was at its zenith. Each year saw tens of millions being exchanged in sales and re-sales of domain names.
In 2009, Insure.com was purchased by QuinStreet, the Internet marketing firm, for 16 million dollars, setting a new record. Here is a list of the top ten domain names that have commanded top dollar when sold, in order of their dollar values.

1.   Insure.com - 16 million dollars (2009)
2.   Sex.com - 12-14 million dollars (2006)
3.   Fund.com - 9.99 million dollars (2008)
4.   Porn.com - 9.5 million dollars (2007)
5.   Business.com - 7.5 million dollars (1999)
6.   Diamond.com - 7.5 million dollars (2006)
7.   Beer.com - 7 million dollars (2004)
8.   Israel.com - 5.88 million dollars (2004)
9.   Casino.com - 5.5 million dollars (2003)
10.                    Toys.com - 5.1 million dollars (2009)


Assessment of TLD Costs

There are companies that specialise in assessing the value of domain names. The service may be available free from the automated ‘valuation wizard.’ However, as a business venture, companies charge a fee to get a customised valuation. Finding parallels with existing domain names in the market today may not really help in figuring out the average cost of domain names.
Domain names are really worth what buyers are willing to pay to purchase the domain name. That’s the bottom line because regardless of how attractive the name may be, if there are no takers, the value of the TLD is zero.


Are top level domain name costs set to rise?

In June of 2011, an article was published about ICANN, the Internet governing body’s efforts to expand the top level domain suffixes beyond the standard .com, .gov or .biz currently in use. ICANN announced to the world that companies could register domain suffixes in relation to brands and products. For example, Coke, Apple or iPhone5 or any suffix that the company chooses.
Sounds great no doubt, so what’s the catch? According to Eweek, in order to own and manage the personally chosen top level domain, the business entity will have to pay ICAAN approximately 185,000 US dollars to apply for this privilege. If the domain name is rejected, its good bye to the money paid as an application fee; if the domain is accepted, the entity will have to pay 25,000 US dollars annually to keep the domain name alive.
To ICANN, the high fees are necessary to weed out the non-entities looking to grab high-end name tag domains they have no right to for resale and big profits. The money will also go towards developing the new generic top level domains (gTLDs) and processing applications.


Conclusion

Here’s something worth considering: Cars.com is a domain name that may net its owner enough and more to retire on. However, there is a very real possibility that a name like Performancesportscars.com may be totally worthless.

Citations:
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Thinking of starting up your own site? Once you have secured your ideal domain you will have to consider finding a good website hosting company before you can start developing your new site.

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