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Assume that we've got a 10.000 (usd or euros) budget.

Which of the following 3 options is better for launching?

1) Spend all of it on a great domain (e.g mymobile.com)
2) Spend 20 on a mediocre domain (e.g mymobile2.com) and the rest 9.980 in AdWords
3) Spend 20 on a mediocre domain (e.g mymobile2.com) and the rest 9.980 in AdWords (8.980 actual AdWords budget and 1.000 to an AdWords qualified individual to run this for us)

In other words, are expensive domains worth the money? And will an expensive AdWords campaign make up for a mediocre domain?

Edit: Assume that the domain is about a free service in a niche area (confident that the CPC will be low). The immediate target is to grow the userbase as much as possible and revenue may come at a much later stage but it's not important right now. The budget is fixed at the imaginary limit of 10k.

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IMHO there is no way to answer your question as it is currently presented. It totally depends. Some obvious factors to consider, which are currently unknown: Search volume for the domain name itself. Realized signup percentage, aka conversion rate. Cost per impression on Adwords. – Jesper Mortensen♦ Jan 31 '11 at 18:46
I've added some more info. Thanks. – cherouvim Feb 1 '11 at 17:32

7 Answers

up vote 1 down vote accepted

A truly great domain name is going to cost a lot more than $/E10,000. I know a company that spent $35,000 on a boring .com domain name that matched their company name. Try spending a couple of days thinking of a really good new domain name that is available for .com, .net. .any-other-tld

The guy that paid $15m for business.com didn't have any money left to build a business. You'll need some money to run the operation too.

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I know. The domain and numbers in the original question are examples. – cherouvim Feb 1 '11 at 21:40
I accepted this answer because the domain I had targeted needed 65k$ which I could never give. After a couple of days of thinking I found a better domain which was free so I only paid 10$! – cherouvim May 17 '11 at 11:47
up vote 1 down vote

I agree with Jesper that there is no real way to answer your question as it is presented.

However, note that if I rephrase your questions as:

"Is it better to spend on a quality domain name or on AdWords first"

I can give you direction. With my question, spending on AdWords first is a like going down a oneway street. You can't really back up and decide to buy that quality domain name later since it would waste at least some portion of the money you already spent on AdWords.

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My target is to gain userbase. In case I later on grab a better domain, can't I just redirect all old to the new? Will it matter? – cherouvim Feb 1 '11 at 17:29
up vote 1 down vote

I can't address the questions as formulated either simple because if you spend all your money on a "great domain name" what do you do next?

But if push comes to shove a truly great domain name is, IMHO, the far wiser investment. A great domain name will continue to pay dividends long after your adwords money is spent and should retain it's value on the reseller market. The kicker is what do you consider to be great.

Tech Coast Angels lists a great domain name as one of their examples of a defensible competitive advantage. http://bit.ly/gh0Q1D

"5. Sustainable competitive advantages Some examples: a "blocking patent" (that can keep out competition); a vanity number (eg 1-800-WEDDING); a domain name (e.g., buy.com); "first-to-scale" advantage (i.e., show you already are the first company to achieve some scale in a new niche)."

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up vote 1 down vote

Well .. assuming that you want to start generating revenue fast ... what is the thing that has the capability of generating revenue asap for you? Without knowing the details I would assume it's the Adwords - so go for it.

You can have the best domain but if no one goes on it - what's the point.

Other's argue about how good it is to have a good VALUABLE domain - which granted - they are right but then again is your business dealing domains or selling other things?

IMHO if you have a good product/service, priced right and there's demand - then i don't think that people will choose if to give you money or not depending on how valuable or cool your domain is.

One very basic obvious question - if you invest everything (or almost) on the domain - do you have more money to invest in marketing to get the people to your site?

There are loads of companies that have been successful with a silly domain.

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Assume that it's a free service which means no revenue. The target is to grow the userbase. – cherouvim Feb 1 '11 at 17:31
i'm sorry but free service with no revenue is an alien concept to me :) Joking aside .. somehow you must be monetizing something - so i guess somehow you must still bring people to the site! – vellad Feb 1 '11 at 19:04
sorry - i only noticed your edit now. if you need to grow your user base - you still need to somehow get the users to the site. again - if the service you will be providing is a very good service - i don't think your users would move away as you don't have the best ever domain. – vellad Feb 1 '11 at 19:07
up vote 1 down vote

I agree with @jimg! A great domain is vital for your company and for your brand. It is a long term investment. If you don't buy it maybe your competition will, and then what ? It is about building your image first. You have plenty of free tools you can use to advertise your company, beside AdWords.

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I agree with this but the domain is pretty expensive. – cherouvim Feb 1 '11 at 21:37
up vote 1 down vote

Two different issues. A domain is a one time purchase - some may say investment, whereas an adwords campaign is a hit and miss event. If the domain name is soooo good, and so relevant to the product offering, its a long term investment that is likely worth it.

(adding more info)

Here is a link to a quora thread discussing a similar issue - a startup considering burning 1/2 its raise for a memorable domain name. Most interesting is the negotiation tactic used to secure the domain - mix of cash, future payments & equity. Maybe an approach worth considering here.

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up vote 0 down vote

even if you have the best domain name in the world, you still have to budget to brand (advertise) it. Trust me, if you look hard enough you can find a domain name for a decent price.

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In the .com TLD it's as hard as seeing Jesus Christ alive! :) – cherouvim Feb 1 '11 at 17:21
As for Jesus Christ, I saw his image in my cereal this morning, and in the toilet the other day... as for .com tld, can still be found with a big investment of time. Cant find something 4-5 characters or single word, but with some creativity its possible. I never hesitate to contact WHOIS contacts from domains. Sometimes its not an investor, but just a regular joe that registered the domain and never moved on it. I just picked up a GOLDEN DOMAIN for $200 usd. Make sure when you email, that you sound BROKE, emailing from a hotmail address works best for me. – Frank Feb 1 '11 at 19:48
Although I'm interested in a generic answer the specific detail is that the guy behind the domain I want is a whole domain trading company who sells it via sedo. – cherouvim Feb 1 '11 at 21:40
Chances are if its on SEDO then its a real domain investor, most investors have the funds to wait it out and get a good price for the domains they own. I suggest finding other domains you like... – Frank Feb 2 '11 at 21:58
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@cherouvim Don't make any assumption on the price the owner of the domain will ask. It might be very high. But you should ask. Sometimes they look like $50,000 and they sell for less than $5,000. Why because domainers like cash and they might have plenty of domains. – tucson Feb 4 '11 at 16:24

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