Domain names are mostly irrelevant
Okay, that title was a little bombastic. My beef isn't with domain names in general, but with generic ones like "sport.com" that people worry way too much about. When was the last time you were looking for a website to help you with something, and you just typed "thatthing.com" into your address bar? I would hope the answer is never.
I'm not talking a company name here - I'm talking a generic word for a service. Let's say I wanted recipes. "recipes.com" doesn't seem to go anywhere. Maybe I'm hella new to the internet and am after an email account; "email.com" is just a parked domain with ads. Most of us, if after these things, would simply go to our search engine of choice and search for what we need, letting the complex ranking systems built into the engines tell us what the best site is, rather than just who grabbed a domain first. What I'm trying to say here is that domain names are mostly irrelevant.
Sure, if you are a company then you should get yourcompanyname.com. That's a no brainer. If you are starting a new internet company, then make up a name that has a free URL. Most forward-thinking web companies just make up or modify a word for their company name/URL - Flickr, Digg, Tumblr, Google (well that was an accidental misspelling, but still) - the list goes on. Flickr isn't called "photosharing.com," 9gag isn't called "thisisahorriblewebsite.com".
But people still really care about these kinds of domains. This guy makes mega-cash snapping up millions of generic URLs and selling them. And it works. The WSJ even thinks it's a decent way to make money. Generic word domain names are all right, but I would class them more as vanity purchases (think "weather.com" for The Weather Channel, or "news.com" for CNet) than an essential marketing strategy. Just think - Apple don't own "apps.com". If you are starting a new web service and you want to spend millions of dollars on a URL like "cameras.com" then stop, build a better product, and sort out an excellent SEO (search engine optimisation) team.
Am I entirely wrong? I'll concede that having a generic domain name helps make a site memorable, once I had seen "bigassmessage.com" (which is an awesome site) I never forgot the URL. I just don't think it should be part of a strategy - just make up a catchy word that doesn't sound too stupid and run with it. The word "vimeo" has no real meaning, but you can tell its spelling from hearing it and it's easy to remember - I'm happy they didn't buy "video.com" to compete with YouTube.
This was kind of a rant - but it just seems like a silly practice. The only domain squatting I approve of is grabbing your kid's one when he/she is born. Because someone owns "henrycooke.com" and they don't even use it.
* Side note! I'm thinking of doing a feature on some NZ internet startups soon. Chuck me an email or a tweet if you would like to be involved. I feel as though I spend way too much time writing about mega-companies with billions of dollars based on the other side of the world, when we are doing some world class stuff here ourselves.