U.K. Domain Prices Surging

LOS ANGELES — While the physical real estate market may be suffering in many locations these days, the virtual real estate market in the U.K. is enjoying a double-digit boom in the value of its .co.uk domain names.

According to Sedo, which bills itself as the global marketplace for buying and selling domain names and websites, the average price of a .co.uk domain name is around $5,200 — while the average price of a .com domain name is around $2,700.

This premium reflects a 22 percent growth in the value of .co.uk domain names over the past three years — during which time the value of .com domain names fell by 18 percent.

According to Sedo's director of business development, Nora Nanayakkara, the world is becoming increasingly connected, and the nature of the Internet is reducing face-to-face transactions.

"Companies run the risk of appearing detached and out of touch with their customer base if they have only a catch-all global .com domain," Nanayakkara said.

The importance of regional domain names when imparting a local feel to a website is supported by a recent survey by Nominet, a U.K.-based domain name registrar, which revealed that 62 percent of U.K. surfers prefer to visit U.K. websites more than other websites — including generic dot-coms.

"Consumers still like dealing with local businesses," Nanayakkara said. "Having regional domains such as .co.uk gives consumers greater confidence that they are dealing with a local organization."

Adult website operators seeking to develop a distinct sense of community should examine the benefits of creating new properties, or porting existing ones, over to localized domain names; while domain name investors should carefully consider expanding their portfolios with .co.uk names in order to take advantage of this global opportunity.

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