Buying Domains For Investment Vs Development

Something that has seemed to come up more than normal in conversations this week with various people is the difference in buying domain names for development versus buying domain names for investment. When I look at buying for development I have completely different metrics as well as intangibles that I think about as compared to when I buy a domain name for investment and gain.

I am sure many will say in either case you will always need the .COM, well as is obvious I do not necessarily agree with that. Although there will always be some level of direct type-ins for extremely high value two word or one word generic .COMs for anything below the absolute top in many cases the amount of type in traffic can easily be exceeded through proper SEO and marketing. I am sure people will disagree but I have enough evidence to the the contrary that makes it a simple fact for me. And enough people have talked about their keyword domains, even decent ones, not having traffic and that is why they develop.

The other argument heard frequently is that you will lose type in traffic to the .COM. Well, I have no doubt I lose some type in traffic from people typing in the .COM version of the domain I develop on a non .COM but it is a small amount, the amount of money spent on acquiring the .COM far exceeds the amount, in many cases, needed to brand and market the non .COM to a high enough traffic level to not worry about the traffic leakage. Once again, feel free to tell me I am crazy, does not bother me. When you are developing it is about the business not the name.

Now, all that said there is no way anyone can say that the best value for investing is not keyword generic .COMs and .NETs. But holding a name for something other than development changes the way you look at it. As an investment you look at the marketplace to either find opportunities (native cctlds) or names that inherently have value (.COMs and .NETs). I buy very few names outside of .COM and .NET for investment purposes.

I view buying a domain for development by looking at a business plan, now if I can fit in the acquisition of a high dollar .COM as part of the plan then well, that may be the best option. But if that acquisition would kill the business from the beginning so it can never make it off the ground then does it make sense to never start the business. No it does not, a good business plan is a good business plan, it is not about the name. As domainers sometimes we miss the point, I would venture to say that most who make comments like "I would never start without the .COM"  have never put together a full business plan (although there are people that have done very well, but they had the funds to start with the bigger names, they are the exception not the rule, do not ever forget that.).

I cringe everytime I hear people say that the .COM should of been bought, etc. Well if a company received 500K to start and the .COM would cost them 300K, does it really make sense to go after the .COM if you can show a successful path to growing a brand and traffic. No, once again buying for development is much different than buying a name for investment.

Long story short, if you can afford a large investment in your generic .COM without killing the business plan sure, go for the .COM but do not ever let the name keep you from starting your business.