No - buying an expensive domain name is not increasing customer value when so many names are still available - use your money to make your application better. My cofounder demanded a .com name, and I agreed - .com is the way to go as long as you can still find a suitable name. For example, our company makes a project management application with the essential feature that it focuses on customer valuestreams. After brainstorming for hours and bouncing around about 30+ different dot.com permutations (and using a thesaurus extensively as well as the greek-english dictionary) we ended up with the simple name: StreamFocus.com essentializing what our app does. (We just finalized the name last weekend)

Depends what you call expensive.

Our default advice is that buying domains doesn't work. The owner either wants a ridiculous price, or doesn't want to sell, or doesn't answer your emails. There are also plenty of good names still untaken. We can often find one in a few minutes using instantdomainsearch.

Picking a brand new domain does usually seem to be the best bet.

Net marketing guru John Reese has a tale of how he sold his first domain for $1,000. After the paperwork was signed, the domain broker let him in on a secret. He was actually buying the domain on behalf of a VC firm for $1 million. =)

The trick would be (if it still works) to always use a no-name broker or middleman to get the lowest price... but I'm no expert either.

I used this service when I could not dream up a cool domain name. http://www.pickydomains.com/ It works wonderfully and real people think up your domain name. Its well worth the $50 and also one of the coolest simplest startup ideas I have seen in a while.

That's really cool - especially as it seems kind of fun to participate in creating names.

A problem is of course giving away the idea, but often one can probably formulate it general enough to not do much harm.

you just give them your idea in a sentence or two and they fly with it. Also I had my new name in 24 hours, which is pretty cool and fast, especially when you where supposed to choose a domain yesterday...

I had the perfect domain name - but it was a .net. We even had the perfect logo for it. But everyone in the biz told me I needed a .com, even my mom. So I spent a few hours with a thesaurus and came up with a shortlist, and of the ones available, the best was offered by BuyDomains.com for $2,500. I mentioned it to my investors and my parents and they said BUY IT NOW. My team was less enthusiastic about the name, but they understood why it was good: - .com - 5 letters, 2 syllables - easy to pronounce and spell - the name made sense for our business, it wasn't nonsense

I went for it and I'm really glad I did. Would I do it for $3K? Not sure. $4K? I don't want to think about it.

Another question: is it mandatory to have a .com domain name? I kind of feel it is, because otherwise your customers will just go to the .com domain even though they might have been looking for you. Perhaps one exception would be if the TLD somehow is part of the name? But even then, I wouldn't be sure.

On the other hand it seems inevitable that in the long run people will get used to other TLDs, because not every valid business will be able to aquire a good .com-name.

I would steer clear of .org, .net, or many others...but I think that .tv domains can be a great choice if you're doing something video-related.

.tv is different enough from .org/.com to be memorable, and can be quite descriptive about what you are offering.

Is .mobi accepted yet or should mobile startups use a .com?

No... crazy names are Web 2.0ish anyway... so just think of a weird way to spell it, or make up a word. Both those strategies worked out fine for Yahoo and Google.

Closer to home, I imagine this was the strategy employed by Loopt and scribd too.

What do you think of them, though? I don't really like them, but perhaps it just takes some getting used to. Google and Yahoo are different, because I don't even now the words they are derived from. But the others - it's weird that those misspellings will probably become normal words if the startup is really successful. Perhaps they'll even replace the correctly spelled words.

Then again, if the exist strategy is getting bought by Google or Yahoo, perhaps the name doesn't matter much - it can be changed after the acquisition anyway (ie scripts.google.com).

No, but the answer is relative. If you have a million dollars then $5,000 isn't "expensive" for the perfect name. But if you have $20,000 spending $5,000 on the domain name would be insane.

I just went through this myself. I started negotiating with the squatter and I came to find out that we went to the same school and we travel in the same circles. Even still we were not able to agree on the price so I walked away.

Last week I finally had a new inspiration for the name. It's just one character longer than the perfect name. I was able to buy .com .org and .net with this minor variation from a registrar (not a squatter)!

Keep thinking!

A domain name that would be perfect for my next project is already taken, but for sale for 4500$ (9 characters). Another one is available for 1500$ (15 characters :-( ).

Which raises the question, would you ever buy a domain name (for that kind of price)? Something in me doesn't want to do it, but then again it is hard to find good names that aren't taken. 4500$ is too much for me at this stage of the project, but in principle?

What makes you think that the price is $4,500? In almost all cases, these prices are very negotiable. Keep in mind that the owner probably paid less than $10 for it. Even considering overhead, $200 is a very good return on the sellers investment.

Here's how I would go about negotiating the price:

 Subject: Interested in buying a domain name
 Date:    2007-04-28
 To:      squatter1; squatter2; squatter3; ... ; squatter50

 I am thinking about purchasing one of the following 
 domains. According to the WHOIS information, you are the
 owner of one or more of them. If you are interested in 
 selling, please reply back with domain name and the price 
 you want for it. In order to give everybody enough time to 
 respond, I will wait a few days collect the responses I get
 before I make a decision. I promise I will not disclose 
 your offer to anybody.

 Thank you!

 domain1.com - squatter1
 domain2.com - squatter2
 ...
 domain50.com - squatter50


 Subject: RE: Interested in buying a domain name
 Date:    2007-05-10
 To:      squatter

 Thanks for your reply. I cannot afford the price you gave
 me. If you still are interested in selling, please reply  
 back with a smaller price. Thanks again!

 Subject: RE: Interested in buying a domain name
 Date:    2007-05-25
 From:    me
 To:      squatter

 Thanks for your numerous replies. I guess my expectations
 are unrealistic because I didn't want to pay more than $100
 for this project. I am not interested in the other 
 variations (.net, .org, etc.) you offered me. Please let me
 know if you will accept $100 for just .com.


 Subject: RE: Interested in buying a domain name
 Date:    2007-05-30
 From:    me
 To:      squatter

 Sorry, $ is too much for me. I will pay $200 if you throw
 in the other variations too. I want to finish this up soon
 so please reply back with the payment/escrow information.

Maybe members of the news.yc could help you brainstorm and choose an alternative?

have you not heard of the term, "synonym"?

buy a thesaurus instead.

Yes. I spent tens of thousands of dollars to purchase FreeDrive.com. It was a web 1.0 company back in 1997 that raised $20 million dollars and went bust.

I'm building the web 2.0 version of this company now and I am starting with a memorable domain that has over 200,000 backlinks already built-in.

If you are a web business, your domain name is your most important asset.

Wholeheartedly disagree. You can turn a worthless domain into a valuable one.

Can you really count on people manually typing in familiar urls today? Even organic search results are not as crucial as they once were.

Somewhere down the line you're going to sink many $K into marketing, I don't see why paying for a domain name that already has some traffic and name recognition is a categorically bad idea.

Was it a bad deal for 'freedrive.com'? Depends on the specifics of the situation and how the company leverages their name recognition.

Depends on a lot of factors, but your pagerank can be a huge deal for many sites still. People deep searching into your content, when they didn't even know they were looking for you, is huge ... if that applies to you anyway.

I paid about $100 for mine. I went to either sedo.com or afternic.com and looked for domain names that were selling for a single price. I may have typed it in and saw that it was for sale--I don't remember the details now.

too many good domain names still available

I would never get a domain 15 characters long

I actually got a great one today :)