Rhodri Marsden: Are catchy domain names worth paying big sums for?

If you've got a massive fortune set aside that you're desperate to fritter away on something of questionable value, you could always put $1m down as a deposit for the right to bid on the domain name Sex.com, which comes up for auction in New York on 18 March. It's a chance to own a piece of virtual real estate with a colourful history involving a five-year legal battle and a midnight flit to Mexico to escape justice. All you'll find there today, however, is a nondescript page offering a link to "sexy lingerie". If it's racy entertainment that you're after, a kitchenware catalogue might be a more arousing alternative.

Sex.com is a prime illustration of the absurd amounts that companies and individuals are willing to pay for two strings of letters separ-ated by a dot – the modern equivalent of the personalised number plate. I should stress that I was not a regular visitor to Sex.com – but nor was anyone else, and that was precisely what forced its sale.

A domain name alone doesn't equal a business model, and without a strategy of how to become the web's premier pornographers, its owners were never going to make back the eye-watering $14m (£9m) they paid for it – still a world record. On a smaller scale, I never clawed back the £40 I spent on Simulblog.com; it seemed like a good idea, but again, I didn't really know what to do with it.

Memorable domain names can be powerful marketing weapons, and there are guidelines to follow when you're choosing one – make sure they're pronounceable, avoid hyphens or numbers within the address, and don't make them too long.

But if your idea ticks those boxes, you can be sure that one of a clutch of resellers has snapped it up for under £10 and will be offering it at some absurd mark-up, knowing that we're often willing to pay over the odds. Think twice before bidding high, however, because domain- chasing betrays an ignorance of how most people use the web.

Google is still the premier hopping-off point, and people still prefer to type things into a search engine rather than the address bar. The current top result for "sex" on Google is a pornography site that's barely three years old, but it hasn't reached that position because of its catchy name – it has just cleverly optimised for search engines. So, in the unlikely scenario that you were thinking of blowing £200,000 on Cleaning.com this week, there are undoubtedly far better ways of using that money to achieve your dream of bestriding the web like some J-cloth-wielding colossus.

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