What Is a Premium Domain Name?

The Internet is a crowded place: There are more than 180 million registered domain names, according to VeriSign. Launching any sort of website in such a saturated cyberspace can be difficult, but premium domain names are domain names geared to produce more traffic than most still-available pieces of web real estate.

Importance of Domain Names

While they’re sometimes overlooked, domain names play an enormous role in your website’s success. Not only does your URL become a paramount part of your site’s identity, it also plays into how well your pages perform in searches, as domain names figure into search engine rankings. Many users bypass search engines altogether in the first phases of a web search, and surf to relevant domains, bringing them to your doorstep if you own a premium domain.

Short Domain Names

With 180 million potential competitors, simply owning a domain name that’s easy for visitors to remember will help boost traffic. Because of this, web developers covet one-word domain names. They’re short, they’re usually easy to remember and their single-word status grants them a kind of definitive appeal that longer domains can’t muster. In many cases, a one-word domain name implies permanence, even if it’s not true: With most single-word domains claimed years ago, websites owning them have an original-development feel to them. When single-word domains are unavailable, short combinations of brief words may also be treated as premium domains in some markets, simply because they’re easier to type and remember.

Established Domains

Established domain names tend to fetch a higher price on the domain-name market, simply because they're likely to already be drawing visitors. Even when they provide little in the way of content or functionality, websites on established domains attract visitors to their pages through search engines, which can be a potentially lucrative advantage. Many search engines' algorithms monitor the amount of traffic sent to each domain, with more visited sites weighing heavier than fresh and lightly traveled ones in rankings.

Keywords and Relevance

Keywords on a website, especially in its domain name, help attract visitors searching for goods and services that relate to that search term. Valuable keywords can be broad and general to attract as many searchers as possible--“comic books,” for example--or they can be more specific to draw a higher concentration of relevant traffic--for example, “Golden age Batman comics.” Keyword-rich domains don’t just perform better in search engines, they also attract visitors because of the panache that comes along with their name.

Investment Opportunities

Although the dot-com bust threw a wet blanket across the idea of speculative Internet real estate investments, a strong domain name still has the potential to make a start-up company a lot of money. Because of this, many top-level domains are being privately held and kept unused, and are often traded among investors hoping to see interest levels in the domain increase, thus driving the resale price up.