What Smart Companies Know about Domain Names

Location: Brand Credibility & Market Share
Brand Recognition + Generic/Authoritative Credibility = More Brand Recognition

Smart Companies acquire category-defining or exact-match domains to lever existing efforts, rebrand, or launch new consumer-facing campaigns—for instance, I sold Rate.com to Guaranteed Rate, eBike.com to Bosch and Advance.com to Advance Publications (Conde Nast); Open AI owns Chat.com; JM Bullion’s parent company A-Mark Precious Metals controls Gold.com and Silver.com; Oracle utilizes Sales.com, Retail.com and Think.com; and L’oreal owns Skincare.com and Makeup.com; Hubspot owns Connect.com; Salesforce owns Code.com, Data.com, Desk.com, Force.com, Site.com, Social.com and Work.com; Intel owns PC.com; PetSmart owns Dogs.com; Frito-Lay launched Snacks.com, and the list goes on and on.

When technology is at parity, mass adoption hinges on one thing: brand awareness.

One key to success will be a memorable brand…and that begins with a memorable name. A name that transcends the moment and stands the test of time. And it’s important to get that right from the beginning…vs. investing substantial assets in working to brand a subpar name/domain on which it will be difficult to gain the traction you need for market penetration. And, then you’ll have all of those sunk costs PLUS the expense of a premium domain name down the road…and they just keep getting more and more expensive.

Selecting the right name/exact match domain name is most important investment you can make in your company’s evolution.

This is not only a smart move offensively, but defensively as well—for instance, many times a company will lock up a domain name to block competitors from acquiring and developing it. In 2013, Brian Sharples, former CEO of HomeAway spent $35M to acquire VacationRentals.com just to keep it out of Expedia’s hands! Which worked. Expedia later acquired HomeAway in 2015 for a whopping $3.9Billion.

The case studies on the inherent advantages of leveraging a premium .com are legion. Look at Russian Standard Vodka’s $3 million acquisition of premium domain Vodka.com. Furthermore, look at the timing: the Russian company was one year into their first foray into the lucrative US market. For three straight years after the acquisition of Vodka.com, with US growth rates at 56.5%, the brand received honors and awards for understanding and achieving consumer appeal. Acquiring the premium domain name was an integral part of this success.

In the early 2000s, as the online travel booking industry was taking off, Hotels.com (then known as Hotel Reservations Network) made a bold move by purchasing the domain Hotels.com for $11 million. This hefty investment was based on the belief that a simple, memorable, and highly relevant domain name would be pivotal in capturing market share. It was. The rebranding to Hotels.com enhanced brand recognition, trust, and credibility—as well as provided SEO advantages, making the site easier to find through organic search, and gave them a competitive edge over rivals with less intuitive names. The simplicity of the name improved marketing efficiency, reducing customer acquisition costs and boosting returns on marketing investments. As a result, Hotels.com has grown significantly, becoming a leading name in the online travel industry.

It’s also worth mentioning the impact of Ultra-premium Domains on company valuation. Monaco, a Swiss payments and cryptocurrency platform start-up, spent $12M to buy Crypto.com. Here’s where it gets interesting: The morning Monaco announced the purchase of the domain their MCO token was trading at $8. After the announcement, MCO was trading at $9.50—a $22M increase in terms of market cap. The fact that they bought Crypto.com—and the resulting PR impact—increased the value of their currency more than they actually spent for the domain!

What these case studies show repeatedly is that when companies utilize a premium domain name, particularly with a name in direct alignment with their brand and positioning, they see a huge bump in traffic and conversions.