Last month at an engagement party, I met a friend of a friend who works for Advertising.com. After brief introductions and small talk, he mentioned that he works for Ad.com. Knowing that Ad.com had just sold at Moniker’s auction for 7 figures, I inquired further, and he mentioned that his company is actually Advertising.com, but everyone calls it Ad.com. Therein lies the problem.

In most cases, when a company or famous person has become known by a nickname, and that nickname or moniker becomes just as famous as the person (and clearly associated with the company or person), that company or person may be able to legally claim common law rights to that nickname or term.

Michael Jordan was known as “Air Jordan” because of his leaping and dunking ability. During his playing days, Nike introduced the Air Jordan brand, and I believe it is still one of their most famous brands. Had Michael Jordan not been known as “Air Jordan,” the term “air jordan” would probably be worthless unless someone else used that term famously. Like Jordan, Advertising.com became known as Ad.com internally and externally, and many people associate the term Ad.com with Advertising.com. However, unlike the term “air jordan,” the term and domain name “Ad.com” has significant value besides its usage by Advertising.com.

As an entrepreneur and marketer, I can commiserate with all parties involved in the situation. The current Ad.com domain owner just wants the sale completed as expected, Moniker/Oversee.net wants the commission they are rightfully owed, Skenzo is worried that they are going to have to spend tens or hundreds of thousands of dollars in addition to the purchase price to protect their new investment, and AOL wants to protect the brand they believe is rightfully theirs.

As a domain investor on the other hand, I am very concerned by this move by AOL, and it will make me more vigilant about researching the domain names I buy and develop.

Earlier, I discussed in detail why I think generic domain names are so important, and I would now like to provide a real world example of the importance.

My wife and I are looking to re-do our kitchen and bathroom floors. Black slate looks cool, but it’s difficult to clean and we want to give our kitchen a fresh look. While at dinner with friends on Friday, we saw that they had black granite flooring that my wife and I both liked. We decided that we were going to look into new flooring options, and our first to stops were HomeDepot.com and Lowes.com, both of which did not have the type of flooring that we want.

Since we haven’t done much renovation other than wood floors from Home Depot, we don’t really know many home improvement or renovation stores in New York, and I haven’t owned or needed a phone book in about 8 years. That said, my first step in searching for granite floor tile were Google searches for “granite floor tiles,” “granite floor tile,” and “granite flooring.”

Had any of these domain names been owned by a flooring company, it’s likely they would have ranked fairly high in Google, since the term isn’t ultra competitive. Fortunately for the existing companies (well, the 5 highest ranking companies anyway), the keyword domain names, GraniteFloorTiles.com, GraniteFloorTile.com, and GraniteFlooring.com aren’t developed.

People often look at generic domain names for their type-in visitor value. Although this is important, it isn’t the primary reason why I like generic domain names. Based on my development experiences, I have found  that keyword domain names generally rank very well in the search engines (Bing moreso than Google), while their competitors with more brandable domain names don’t rank nearly as well.

I may or may not have bought my granite tiles from GraniteFlooring.com, but when all things considered are equal and I don’t have any brand loyalty to a local store, it makes things easier for the company to rank well organically and not have to consistently pay for visitors through SEM, which can be useful but requires continued investment. Generic domain names aren’t the answer, but they make finding the answer much easier.

Most companies and their brand managers prefer their brand name over a generic domain name, after all, they are called BRAND MANAGERS!  The brand helps them stand out from their competitors, and they know (well, hope) their customers will remember the brand name when walking the aisles at Walmart or searching the shelves at Best Buy, or some other retail shop.

Many of the world’s large brands can afford to spend billions or millions on marketing to ensure everyone remembers their company name. They buy television commercials, sponsor the biggest sporting and other televised events, pay for stadium and building naming rights, send billions of direct mail pieces, rent billboards along the highway, have extensive Internet marketing campaigns, and do a whole host of other things to make sure customers and potential customers know who they are – maybe even more than what they actually do.

When a company chooses a unique brand name over a generic domain name, they are missing a big piece of the puzzle – Google/Bing/Yahoo/Ask searches. Sure, a company can pay for search engine marketing campaigns, but organic search results are much less expensive, and they don’t require the same amount of money for constant upkeep, although a great website is costly. SEM costs a lot of money, and if you stop, the traffic will stop coming as well.

Keyword domain names generally perform better than non-keyword domain names when it comes to search engine results for the searched keyword, especially with Bing. When people search for a specific product, and they either don’t know the brand they want or simply want a comparison of brands, they would probably type the product name in Google or search engine of choice.

In fact, have a look at some Google search comparisons of brands names vs the generic name (Global Monthly Search Volume, exact match). You’ll see that although the brands sometimes to get more search volume, there is still a significant number of people that don’t look for brands – they look for products.

Candy: 1,220,000
Hershey: 90,500

Cell Phones: 1,500,000
Verizon Wireless: 3,350,000

Mountain Bikes: 301,000
Trek: 368,000

Vodka: 368,000
Grey Goose: 74,000

This isn’t scientific at all, but it shows that many people either aren’t satisfied with a particular brand or they would like to see some sort of comparison, to get an idea of their options (ie Bing is “the decision engine”). If a generic domain name is well-developed, it will rank right up there organically, allowing the company to capture a significant amount of that search traffic (at no incremental cost). They can compete with the big brands at much less ongoing cost, aside from website upkeep.

With Lowell.com, about 20% of my traffic is type-in traffic. I am sure this percentage is much higher on an established brand like Verizon or Apple. However, there will always be a significant percentage of people who find the website via Google, and many of them are searching for generic search terms, as witnessed above. If a company owns top rankings for a well-searched generic term, they might not need to spend millions on brand marketing, since the consumer might find what they want simply by seeing the meta tags and trusting the generic brand.

If a company owns the generic term, they can build a site on that domain name ala Toys.com, and either brand the generic domain name or make sure there is easy access to get to the main brand. Doing this can help both websites rank for the generic term, rather than just taking one out of commission by forwarding the type in traffic, since a forward rather than a stand alone website will probably remove it from Google and other search engines.

In my opinion, when it comes to Internet marketing, a generic domain name can handily beat a known brand at a fraction of the cost.