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Selecting domain name
Importance of domain name for high rankings in search engine optimization can barely be overestimated. A well-selected domain name helps to achieve very good results and generate traffic especially when it is complemented by other on-page and off-page optimization techniques. It stands a little different from the other on-page factors as it is not 100% within your control - domain name has to be unique and it isn't something you want to change frequently (preferably not at all), since your promotional efforts are targeting towards this particular domain and if you get a new domain name - the work has to be done all over again. So put some time into selecting an optimal domain name. Below are things to consider.
As it has been discussed you should have a set of keywords and key phrases with individual pages targeting their particular keyword. For a domain name however you should identiryf your main target keyword(s) or key phrase and try to register a domain name that contains those words, while still remaining easy to read and remember.
At this point it is often difficult to find a straight-forward domain name that has your keywords but you should still try to avoid domain names that can confuse your visitors. Repetitive letters is one sure way to cause confusion - for example John's Socks, would it be johnssocks or johnsocks? You can be sure your visitors will never remember and a significant portion of your traffic are returning visitors, who do not come to your website through search engines but come there directly because they remember it based on previous positive experience.
Let us consider an example. Let's say you want a site about car engines. Your first pick might be carengine.com. BUT, first of all it's taken but even if it wasn't it isn't optimal because it looks weird to a human eye - you first read the word "care" and then struggle to understand what "ngine" might mean. For this reason, car-engine.com would be a better pick but unfortunately it's taken. However the-car-engine.com is available (at least it was at the time of writing this article) and does the job just as well, so I would go for that.
Main TLDs (top level domains) are .com, .net, .org etc. I would say .com is your first pick as it is something that most people would automatically add to the address. If you can't find a free .com TLD, then try .net. If you manage to get a really good domain name, you might want to consider registering all main TLDs to make sure your traffic is not deluted by someone else registering a similar address.
Registering a domain
A domain name has to be registered. Registration is done on annual basis and it does cost money. Not a major investment - usually under 10 USD a year. One other alternative is to get a sub-domain at another website (i.e. www.yoursubdomain.somesite.com), which you can get for free, but that does not produce results anywhere close to having a separate domain name, so even though this site is about generating money with minimal investment my recommendation would be to register your own domain name.
You can search for available domains at a domain registrar (I hesitate to recommend any particular one - just do a search for 'register domain' and you will get plenty of results to choose from). As you will be looking for a domain name you will notice that many obvious domain names have already been registered, so you will have to be creative and try to find a combination of words that has not yet been registered but does not make your website name bulky or hard to read. Some of the registrars offers tools for selecting domain names, that offer alternatives if domain name you selected has already been registered.
Other considerations when selecting a domain name
While proper optimization techniques can help increase popularity of your domain, misuse of some tactics can hurt a domain and even get it banned from search engines. Before you finalize your selection make sure that domain is not black listed or banned. One site that offers a tool to check domain black lists is blacklistalert.com. A site that gives a registration history for a domain: http://domain-history.domaintools.com. If you want to get details you need to pay, but you can still see if there are any previous records of domain registration for free.