What Does A $405,000 AreaRug Domain Feel Like

I have no idea what a $405,000 area rug domain investment feels like but a group of Iowa investors will soon find out! This particular group of investors decided to team together to purchase AreaRugs.com, now my fellow domainers don’t jump on the bandwagon just yet! I can see it already, almost every product carried in the neighborhood bed bath and beyond will have a domain name pertaining to it. Lets keep that from happening, ok!

This is an incredible investment, but is it currently worth $405,000? I can only give my honest opinion on this and personally I can say that it just might be. The only thing that worries me about this investment is that it did not include the domain name AreaRug.com as well! I can see a number of people including myself simply typing AreaRug.com and forgetting the s! So why is this domain name worth $405,000 or shall I say why is this domain name worth the price of a basic house here in sunny California? The answer directly correlates with the google adwords keyword tool. According to this tool the keyword combination “area rugs” received an outstanding 3,350,000 searches locally in August 2009! That is a tremendous number for any keyword combination, let alone one geared towards an item such as an area rug. This statistic alone proves to me that the domain name is worth a pretty penny.

Now lets move on to discussing the current state of the site and future development plans. I am purely guesstimating here, but for this investment to be worthwhile in the long term the Iowa investors are going to have to put there running shoes on. Development will need to occur rapidly. With larger companies already established in such a key market such as overstock.com and rugs-direct.com these domain investors will be fighting a behemoth.

This brings me to my final thoughts on the topic. If $405,000 was spent on the acquisition of the domain name, how much has been reserved for development, sales and marketing? This is the magical question here. I almost feel that to effectively compete against the larger companies which are already selling items, there will need to be another $400,000 – $500,000 investment. In the end the investors might find themselves in a bit of a tough spot. The hard work has just begun. Although this domain name is a category killer, it won’t sell area rugs by itself.

To read more about this topic feel free to view the following press release.