Page Rank: Quest for the Most Lucrative Internet Domains
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During the early 1990s, the internet gained widespread momentum. Today, it is one of the most ubiquitous and influential services of the 21st century. With a few key strokes, users have access to infinite amounts of information quickly and easily. Through the emergence of job search, travel, business search, music, entertainment and social networking sites, the internet has a substantial influence on the daily lives of millions. As countless individuals launch their internet browsers each day, typically their first activity is to type a website domain address. As demonstrated by the recent sale of the domain www.business.com for $ 8M, a domain’s price is partly determined by the site’s popularity; the more popular the address, the more costly the domain. As traffic builds, internet domains are becoming increasingly valuable.
Next year, the Internet Corporation for Assigned Names and Numbers (ICANN) will allow top site domains to be purchased by individuals assuming they are willing to pay an initial $185,000 fee followed by participation in an auction of the domain address. With the advent of this new type of “investment”, some investors are becoming very interested in attempting to buy coveted domain names. Given the appeal of popular domains like business.com, it is not surprising that these destinations are so expensive.
The high cost to buy popular domains raises the question as to how prices are set and why prices for some sites are so expensive. The answer is that when an internet domain name is a particularly popular and well trafficked address, it will result in a higher page rank value, which in turn produces more revenue. For example, it is estimated that the domain sex.com has the potential to generate $15,000 in revenues from daily traffic.
Search engines use page rank values to direct search results. For example, a Google search produces a list of website findings based on the ratings of the sites displayed. The priority order is based on the number of in-links, which are labeled as authorities and the number of out- links which are termed hubs. In-links are created by the number of other web pages that either reference or endorse the web page being considered. The greater the number of in-links, the greater a webpage’s authority score. A domain such as www.business.com will have a very high authority score if it is frequently mentioned on other websites. The hub score of an internet domain is determined by the worth of all its authority values. The combination of a web pages’ authority and hub scores forms the web page’s rank value. For example, if someone is looking at various websites related to business, they may glance at a link for business.com. This behavior creates an in-link. The greater the number of in-links, the higher the authority score achieved by that web page. In addition, all web pages have a hub score which is based on the total of its authority values. The combination of a web page’s authority score and hub score yields its page rank value. A website like www.business.com is likely to have a very high authority score due to its frequent mentions on other websites and this high score drives the domain’s monetary value. Using the Principle of Repeated Improvement, websites continually send endorsements to other websites via their outgoing links which in turn bolster the receiving websites’ page rank. In addition, the more important the initial websites with out-going links to the website under scrutiny, the stronger the endorsement and subsequent page rank of that web page. High page rank values can be more easily achieved by popular domain names due to the ease with which they are able to accumulate high authority and hub scores, which contributes to the monetary value of such domains. When one considers the popularity of a common domain name, it becomes clear how a web address like www.business.com and others can achieve a valuation as high as $8 million dollars.