For any business to succeed these days, it has to have a presence on the Internet. But before you delve into the complexities of an Internet strategy, there's a crucial first step to take.

You need to find an effective domain name -- one that's easy to remember and will draw in potential customers in a simple Web search. And one that isn't already taken.
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It isn't easy to do. Domain-name speculators, or "cybersquatters," gobble up unclaimed names they think business owners will want and attempt to resell them at a hefty markup -- sometimes thousands of dollars more than they paid. Between the speculators and the millions of businesses already on the Web, it's increasingly tough for a start-up entrepreneur to find a domain that will help get an online business off the ground.

"Not only are there very few choices left for a distinctive name, it's [also] so hard to make yourself stand out from the crowd" because of the similarities among so many domain names, says Tom Barrett, president of EnCirca Inc., a domain registrar based in Woburn, Mass. A customer might mistakenly add a letter to your domain name "and end up on a totally different Web site."

About 50 million domain names for common extensions are currently registered, according to Name Intelligence Inc., a Bellevue, Wash., company that tracks the industry, with several million new names registered each year. (An estimated 15 million more names are registered in domain extensions that are more difficult to track.) Of those domains already registered, more than 30 million end with the .com extension. While many desirable names are still up for grabs with other extensions, such as .net, .biz or .pro, .com is the preferred extension, because it's so widely assumed by Internet users to be part of most Web addresses.

So, in the increasingly competitive world of Internet businesses, how do you choose -- and nab -- the name that will be best for your business? Here are some suggestions.

The Name Game

In picking a domain name, the obvious choice may seem to be the name of your business. But you may want to abbreviate it or go with something instead that describes what you're offering.

"You want a name that's short and memorable," says Peter Forman, chief executive of Register.com, a domain-name registrar. "You want to make it simple for people to find you, like a good 800 number does."

Or you can try to claim more than one name, so you can use both your business's name and a descriptive name: The Rugs Direct online store, for example, can be reached at RugsDirect.com or at Rugs.com. That way the site can be easily found both by people who are familiar with the business and by those who have never heard of it but are looking for rugs.

Using descriptive words in a domain name also might help propel you near the top of a keyword search for businesses like yours -- something that can make a huge difference in traffic to your site.

Product names often don't make the best domain names for small businesses, says EnCirca's Mr. Barrett. A name like Viagra resonates so clearly with consumers because the product has been backed by massive advertising and marketing. But if you're trying to sell a new product with an opaque name, and you don't want to spend a ton of money promoting it, you may have trouble luring potential customers to your site if you use the product name as your domain.

Also, try to steer clear of hyphenation and unconventionally spelled words that might trip people up when they go to type the domain name into a Web browser.

Research Time

Once you've chosen some potential domains, the next step is figuring out if they're available. Registrars' sites have search engines that will show whether a name you type in is registered or not.

Registering a domain name that isn't already in use typically costs $30 a year or less, and some registrars offer discounts for multiyear registrations; a name can be registered for as long as 10 years at a time. A list of registrars accredited by the nonprofit Internet Corporation for Assigned Names and Numbers, which manages the domain-name system to ensure against duplication, can be found at Icann.org.

Most registration sites will suggest alternative domains or the same name with a different extension if the name you enter is already taken. If you search for FurnitureWorld.com, for instance, you'll discover it's taken, but available domains include FurnitureWorld.cc and GoFurnitureWorld.com.

However, be careful about choosing an alternative. Using an extension other than .com or another popular one such as .net or .biz could mean less traffic to your site. People will usually type in the .com extension if they don't know or don't remember that a site uses a different extension, says Jay Westerdal, president and chief executive of Name Intelligence. As an example, he says many people looking for the official site of the White House, which is WhiteHouse.gov, for years were surprised to land on a porn site that used to inhabit WhiteHouse.com.

You also might consider buying up domain names similar to yours to prevent customer confusion or to keep someone else from buying them.

Art of Negotiation

If the name you want is already registered, it isn't necessarily a lost cause. Many domains are owned by cybersquatters with the sole intention of reselling them to businesses. Sometimes a domain is registered by someone who simply isn't using it.

Because so many of the best domains are already registered, it's often best to buy one from someone instead of coming up with an unregistered one that may not be as effective, says Mr. Westerdal.

Most registrars' sites provide a directory where you can find out who owns a domain name and get contact information. One possible obstacle: A growing number of registrants -- now about 5% of new registrations -- are anonymous, Mr. Westerdal says.

You can also try simply typing the name you want into a Web browser and seeing if anything pops up. If the domain is registered but for sale, the site might include a link that lets you email the owner and place an offer.

When Chris Cameron of Birmingham, Mich., started an insurance agency last summer, he wanted two domain names: www.MainStreetInsurance.com, the business name, and www.123Insure.com, a name that would lend itself to advertising because of its simplicity. Both were already registered.

Searching a directory, Mr. Cameron discovered that MainStreetInsurance.com was owned by developers in Texas who bought the name a few years back with the prospect of starting an insurance arm. He called the firm directly and found out that it had dropped its plans and no longer needed the name. The company asked Mr. Cameron to name his price, and he bought the domain name for $1,000.

The other name, 123Insure.com, wasn't quite as easy. It was held by a squatter in New Jersey. Mr. Cameron, posing as a tech guy working for the insurance agency, called the man and asked how much he wanted. The man asked for $10,000, and Mr. Cameron offered $6,000. The squatter first turned him down, but called back a few days later and accepted the offer. "It's hard to know what to offer" squatters, Mr. Cameron says. "It comes down in the end to how badly you want it."

It's important to be careful about what you disclose to somebody squatting on a domain name, says Rich Sloan, co-founder of www.StartupNation.com, a company that helps small businesses get started. You certainly shouldn't sound desperate or as if your business plans are doomed without that particular name. "You can't sound wealthy, and you should not reveal any significant plans that you have for the name," Mr. Sloan says. "That's how they establish their leverage over you in negotiations."

Another possible tactic: Wait for the registration to expire. Of course, if the site is unused, there's a better chance the registrant won't renew. Directory searches will show when a name is up for renewal.

You won't necessarily be able to snap up an expired name unchallenged, though. Once a name expires, it goes to the first person who manages to register it. Sometimes several people rush to grab the same name. Online services such as SnapNames.com can help you try to grab a name right after it expires. Also keep in mind that if you get an expired name, it can sometimes take several weeks for the name to be transferred over to you.

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