Google Domain Strategy Could Impact Domain Resale Values

How does Google plan to use its new status as a domain registrar? Speculation abounds. One of the most intriguing theories, outlined at Datamonitor, is that Google will use its access to the list of recently sold domains to clean up its search results, resetting a site's "PageRank" when its domain changes hands.

That would be consistent with Google's indication that it will use its ICANN accreditation to "learn more about the Internet's domain name system ... While we have no plans to register domains at this time, we believe this information can help us increase the quality of our search results," the company said in a statement. As a public company, Google is unlikely to publicly misstate its intentions, lest it face scrutiny from regulators and investors.

Even if it doesn't enter the registry business, Google's plans could affect the price of domain sales on the secondary market. The strategy outlined by Datamonitor, citing "a source claiming knowledge of Google's plans," would make it more difficult for domain owners to benefit from a strong Google ranking when they sell a domain.

Google is secretive about its PageRank system, which assigns a number to a site based upon more than 100 variables, including the number of links from other sites. A popular domain will generally be rewarded by the system - Yahoo has a PageRank of 10, while Slashdot (9) and Netcraft (8) also have high ranks.

Given the importance of Google traffic in a site's success and profitability, a high PageRank makes a domain more attractive to buyers, who will pay a premium for added visibility in Google. Domain sales tend to pollute Google search results, however, as new owners can remove the content which earned the ranking. Domain name speculators commonly point highly-trafficked domains to pages bearing keyword-related advertisements - an outcome certain to disappoint a web searcher using Google to locate specific content.

As a registrar, Google would be able to negotiate access to a centralized list of expiring and resold domains (known as the "batch pool"), and then know when to reset PageRank on a domain that has changed hands. The site would then have earn its position in Google's rankings, rather than inheriting the "Googlejuice" of the previous owner.

While that would lead to less link spam in Google's rankings, it has implications for web site owners selling a site with an established PageRank. If the strong PageRank disappears once the domain changes hands, the buyer may be less likely to offer a premium for visibility in Google.

Google has recently taken steps to eliminate rankings based on comment spam in weblogs, which is consistent with a focus on insulating its searches from manipulation.

Is this speculation upon speculation? Perhaps. But it's speculation that merits the attention of domain and web site owners. If the PageRank reset theory proves to be correct, Google's strategy could suppress speculative sales in the secondary domain name market, and become a factor in the sale price of reputable Internet-based businesses.