By Andreas Gauger
 
As an established business owner, you know just how vital your domain name and Web site is to your business. Just as a company's physical address is unique, a company's domain name is the unique address for its Web site. No one else can have that address. That's why some domain names are sold for a million dollars.

Timely Renewal
This fact is an alarming contradiction to the slackness of many companies dealing with their unique domain address. An August 2006 report by VeriSign revealed that 25-30 percent of domains are lost each year simply because of failure to renew in a timely fashion.

And the people at VeriSign should know: years ago they held the monopoly of assigning domain names. It was their predecessor, Network Solutions, which designed many of the original dot-com domain registry procedures. One of these procedures established that domain names were to be registered for a certain amount of time. If the claim is not "renewed" in time, the domain will be made available to a new owner.

Because of that, numerous businesses lose their domains, not through willful negligence, but a lack of diligence. There are domain investors who are becoming increasingly vigilant about acquiring lapsed domain names. Think of your domain as virtual real estate and domain investors as speculators.

If you don't think virtual real estate is a big business or that your company is not vulnerable, think again.

A December 2005 CNNMoney.com article stated that Yun Ye, a Chinese citizen living in Vancouver, British Columbia, sold his portfolio (consisting of more than 100,000 domains) to Marchex for a reported $163 million.

In some instances, Ye acquired those domain names when they expired. The same article recounts the sad tale of Chad Folkening, a domain investor who was victimized by Ye. Folkening had several hundred domains but was disorganized and sometimes missed domain renewal deadlines. He noticed that Ye was snapping up his domains at the moment they expired-acquiring about 100.

Value of Goodwill
If you are a hard-working business owner with a thriving business, this should get your attention and make you more diligent about protecting your online assets. Here's why: After years of building up your business financially and increasing your presence on the Web, it can disappear instantly if you lose your domain. In addition to growing a business financially, there is also part of the business that is "goodwill."

Goodwill makes the business worth more than its tangible assets. Things such as reputation, a desirable location and a unique product can all-but-guarantee an earnings stream, and give the business more value than simply its tangible assets.

If you lose your domain name after years of building a positive reputation, someone can hijack your goodwill and turn it into their profit.For example, they might sell it back to you at an enormous cost, or "park" it with a registrar and reap revenue from advertising. According to VeriSign, parked Web sites include Pay-Per-Click (PPC) sites that contain advertising links to generate revenue from click-through advertising.

Tim Schumacher, CEO of Sedo, a domain name trader, said, "What makes domain names valuable is the increase in Internet advertising. People frequently search the Web by typing Web site addresses directly into browsers—commonly referred to as direct navigation. Site owners then turn that traffic into cash by parking their domains with us or other parking services."

Covering Your Assets
Small business owners must be vigilant in protecting their online "turf." For example, if you own "Lou's Lobster Pot" in Portland, Maine,  you might want your domain name to be LousLobsterPot.com. But, you also should make sure to register LouisLobsterPot.com, LobsterPotLous.com and LousPortland.com so that wayward customers can find you. It would also be smart to register names such as LobsterPortland.com, LobsterMaine.com, LobsterRestaurantPortland.com, etc., to protect them from your competitors or domain investors who would park those addresses to get pay-per-click revenue. 

To further protect your goodwill, it's probably worth it to register up to 10 misspellings. Those domain misspellings should then direct traffic to your Web site, as well. It also might be a good investment to further protect your domain by extending your registration to other extensions, such as .info, .biz, .org or .mobi, and even different country extensions of your domain, such as .ca or .tv. Because one domain only costs around $6 per year, this need only be a tiny part of your advertising budget.

Here are some suggestions to protect your domain names:

• Double-check with your domain registrar to make sure your credit card and e-mail address are up-to-date.
  
• Update your account information at each Web host or registrar you use, each time you change your e-mail address or update or change your credit card information.
  
• Some registries offer the option to lock your domain, which prevents someone from surreptitiously transferring your domain to another party.
  
• Make a list of all your domains, where they are registered and when they expire.
  
• Ask your registrar or Web host if they provide an auto-renew feature. In this case, your domain will be renewed automatically and you'll never have to worry about losing your domain name again. Since an increasing number of domain owners ask for a one-stop-shop for hosting and domain registration, an increasing number of Web hosts offer an inexpensive full service menu that includes everything to protect your online presence.

Andreas Gauger is chairman of 1&1 Internet, Inc. You can reach him at www.1and1.com.