In the last decade, there have been at least 20 recorded sales of dot-com domain names for $1 million or more. According to this Wikipedia entry, the most expensive domain ever sold was Vacation Rentals.com for $35 million in 2007. Insure.com took a distant second at $16 million and Sex.com was the third-most expensive domain name at $13 million. While seven figure domain name sales are fairly uncommon, there are thousands of five-figure and six-figure domain name sales each year.
Single-word dot-com domain names (like Pets.com or Apple.com) have regularly been sold at prices of five-figures and above for more than a decade and a half now. The reason that people are willing to pay so much for these domain names was because of the limited availability of the dot-com digital real-estate. Only one company can have the dot-com for a generic keyword, like “Cars.com”, “Diapers.com”, or “Sex.com”. As a result, dozens of companies have competed for these single keyword dot-coms and have driven them up in price. People have historically wanted single-keyword dot-com domain names because they’re memorable and dot-com is the most common top-level domain (TLD) used by companies. Single-keyword (exact-match) dot-com domains have also historically benefited in Google’s search engine rankings and there are still some people that type in keywords followed by dot-com in their web-browser hoping they’ll land on the right website. While there have been some good reasons to own the single-keyword dot-com domain name in the past, I think these are coming to an end. As a result, the age of expensive domain names will be over within the next decade.
It’s important to recognize that the landscape of digital real-estate is expanding. Believe it or not, there are now 490 different top-level domain names. ICANN is currently reviewing 1,776 applications for new top-level domains and has delegated at least 180 of those. As large companies begin to adopt their own TLDs, consumers will quickly adapt to the reality that a domain name can be “anything.anything” instead of just anything.com. Many startup companies are already using .co, .ly, .tv and .io domain names to avoid the high cost of dot-com domain names. As more TLDs get approved, new companies will increasingly make use of upcoming TLDs to avoid the high-cost of purchasing a dot-com domain name from a private owner. Some upcoming TLDs that have already been approved by ICANN include .technology, .bar, .land, .solutions, .blue, .academy, .company, .today, .tips, .trade, .gift, .social, .buzz, .club, .photos, .farm, .house, .pics, .zone, .ink, .pub, .report, .foundation and .best. Eventually there will be a critical mass of people, organizations and companies that will opt for other TLDs than dot-com and it will be common place for domain names to end in any number of TLDs.
The importance we place on the dot-com TLD will become a relic of the past as a new generation of web-users comes online that know nothing but a cornucopia of top-level domains. For my son, the dot-com TLD will be just one of many possible extensions that a domain name can have. We place an importance on the dot-com TLD because historically that’s been the TLD that everyone has used. Kids growing up today simply won’t care about having the dot-com domain name because it will have always been a reality to them that a domain can end in just about anything. When dot-coms just become one of many TLDs, the value of having a domain like “diapers.com” and “pets.com” will significantly lessen and prices will fall as a result. Why pay 8 figures for a domain like “Pets.com” when you could get “Brandname.Pets” for less than $100.00?
The other two reasons that people have historically placed an emphasis on single-keyword dot-com domain names is the type-in traffic (i.e. people typing in diapers.com) and the “exact-match domain benefit” in Google’s search algorithm that has given keyword-rich domain names a bump in search engine rankings. We know that Google has significantly cut back on the boost given to exact match domains and now most search engine optimization (SEO) specialists recommend building out a brand instead of focusing on an exact match keyword. While there is still some benefit of people simply typing in the dot-com domain names into their browsers, I think this will significantly lessen overtime as consumers become savvier web searchers.
I don’t believe the dot-com is dead today, but ten years from now, I don’t see companies paying seven or eight figures for single-keyword domain names. Long term, I think companies will register their own TLDs (like www.search.google/ and www.images.google/ instead of google.com and images.google.com) and smaller players will use category-specific TLDs, like .tech, .pets and .games, or a variety of newer generic TLDs, like .co, .io and .ly.