Domain Name Value by Keyword and Length

"How is the value of domain names affected by number of keywords and length?"

A DomainsBot study on secondary market trends by Emiliano Pasqualetti, with assistance from Antony Van Couvering

[edit] Introduction

We examined 4304 domains containing up to 3 keywords sold on AfterNIC from January 2003 to September 2005. We examined their value based on the number of keywords and the length of the domain name.

We decided to test two truisms about domain names:

1. Is shorter better?
2. Are fewer keywords better than more?

[edit] Conclusions

• The proposition that fewer keywords and fewer number of characters mean more valuable domain names is generally upheld, but there are surprising and significant exceptions

• Value is significantly affected by whether a domain name contains "lexical" components (or "real" words"), or "short" (non-grammatical) components

• The importance of "lexical" component grows as the number of keywords grows

• Two-character domain names are exceptionally valuable

• One-keyword domain names longer than 2 characters gain in value as the grow longer, up to about 8 characters; the top domains of this area are "lexical" names made of two or three syllables

• Two-keyword domain names gain in value as they grow longer, up to about 11 characters, then descend in value

• One-keyword domain names are worth on average about 3 times more than 2-keyword domain names, and 4.5 times more than 3-keyword domain names

[edit] Data

Figure 1 – Number of domain names sold by length and number of keywords. Single keywords (after excepting the very rare two-letter words) descend in price as predicted by conventional wisdom. Two-keyword domain names have an “ideal” length of 11 characters, with an apparent (good) exception for 8-letter words. Three-keyword domain names sold in low quantities regardless of length.

Figure 2 – Total Value Exchanged ($ spent) depending on the number of keywords in a domain name. Two-keyword domain names account for the bulk of sales and dollar value.

Figure 3 - Average value by number of keywords in a domain name. Takeaway – get the one-keyword domains if you can!

Figure 4 – Among the different keyword groups, we see surprising results: one-keyword domains grow in value (!) as they get longer before showing a sharp drop in value when greater than 8 characters in length. Two-keyword domain names do not follow a regular trend-line, with 4-letter, 11-letter, 16-letter and 19-letter names outstripping names of all other length. Three-keyword names do best when they are 8, 9, or 10 characters in length.

Figure 5 – Trend-line analysis of one-keyword domain names. As expected, two-letter names (mostly acronyms) command the highest prices. But single-keyword names in a group between six and eight characters do significantly better than domain names of 3, 4, and 5 characters in length.

We explain this by dividing domain names into “short domains” (acronyms and abbreviations) and “lexical domains”(real words). Acronyms predominate up to four letters, and then are replaced by “real” words, which have more value. For example, top 2-letter domains includeeq.com, ke.com, while longer “lexical” domains include marble.com, password.net, and america.org. We see therefore a double valuation principle: short domains are good, but domains with meaning will often be worth more, even if longer.

Figure 6 – Trend-line analysis of two-keyword domain names. These have a more stable distribution: still a higher value for short domains (4 characters), and then a stable value area up to the 16-character group. After this value drops clearly (we are ignoring the 19 and 20-character domains because of their low sample relevance).

We continue to see a distinction between “short” and “lexical” domains. For example, top 4-letter domains includetwox.com, 121s.com, and x360.com, while longer “lexical” domains include petsupplies.com, proproject.com, and newmovie.com.

Figure 7 – Trend-line analysis of three-keyword domain names. The comparative lack of value for “short” vs. “lexical” domains is further emphasized, even showing a penalty for very short three-keyword domain names. “Short” domains include ugetit.com, mytop5.com, and soup4you.com, while the longer “lexical” domains include tipsandtricks.com, itoldyou.com, and playandwin.com.

The lexical effect appears to be related to the difficulty of remembering domains containing abbreviations as the number of keywords grow. For example, the phrase “music for you” could be abbreviated in several (confusing) ways: music4you, musicforu, music4u.

Figure 8 – Aggregated average value by length. Two-letter domains are, not unsurprisingly, worth much more than any other domain name. The difference between domain names of other lengths are shown better in the figure below:

Figure 9 – Aggregated average value by length, with two-character domain names excluded. We see general confirmation of the proposition that the shorter the name, the more valuable. However, with the exception of two-character domains, the difference is not dramatic and has exceptions.

Figure 10 – Average value trend lines. The apparent anomaly of one-keyword domain names increasing in value as they get longer, up to 8 characters, is explained by dividing up domain names into “short” domains (acronyms and abbreviations) and “lexical” domains (real words). “Short” domains are worth more with fewer characters; “lexical” domains are worth more at middle lengths, which correspond generally to real words.

Source: AfterNIC

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