Short and Sweet
Domain names can be really long or really short (1 - 67 characters). In general, it is far better to choose a domain name that is short in length. The shorter your domain name, the easier it will be for people remember. Remembering a domain name is very important from a marketability perspective. As visitors reach your site and enjoy using it, they will likely tell people about it. And those people may tell others, etc. As with any business, word of mouth is the most powerful marketing tool to drive traffic to your site (and it's free too!). If your site is long and difficult to pronounce, people will not remember the name of the site and unless they bookmark the link, they may never return.
Unless a visitor reaches your site through a bookmark or a link from another site, they have typed in your domain name. Most people on the internet are terrible typists and misspell words constantly. If your domain name is easy to misspell, you should think about alternate domain names to purchase. For example, if your site will be called "MikesTools.com", you should also consider buying "MikeTools.com" and "MikeTool.com". You should also secure the different top level domain names besides the one you will use for marketing purposes ("MikesTools.net", "MikesTools.org", etc.) You should also check to see if there are existing sites based on the misspelled version of the domain name you are considering. "MikesTools.com" may be available, but "MikesTool.com" may be home to a graphic pornography site. You would hate for a visitor to walk away thinking you were hosting something they did not expect.
Also consider domain names that may not include the name of your company, but rather what your company provides. For example, if the name of your company is Mike's Tools, you may want to consider domain names that target what you sell. For example: "buyhammers.com" or "hammer-and-nail.com". Even though these example alternative domain names do not include the name of your company, it provides an avenue for visitors from your target markets. Remember that you can own multiple domain names, all of which can point to a single domain. For example, you could register "buyhammers.com", "hammer-and-nail.com", and "mikestools.com" and have "buyhammers.com" and "hammer-and-nail.com" point to "mikestools.com".
Hyphens: Your Friend and Enemy
Domain name availability has become more and more scant over the years. Many single word domain names have been scooped up which it makes it more and more difficult to find a domain name that you like and is available. When selecting a domain name, you have the option of including hyphens as part of the name. Hyphens help because it allows you to clearly separate multiple words in a domain name, making it less likely that a person will accidentally misspell the name. For example, people are more likely to misspell "domainnamecenter.com" than they are "domain-name-center.com". Having words crunched together makes it hard on the eyes, increasing the likelihood of a misspelling. On the other hand, hyphens make your domain name longer. The longer the domain name, the easier it is for people to forget it altogether. Also, if someone recommends a site to someone else, they may forget to mention that each word in the domain name is separated by a hyphen. If do you choose to leverage hyphens, limit the number of words between the hyphens to three. Another advantage to using hyphens is that search engines are able to pick up each unique word in the domain name as key words, thus helping to make your site more visible in search engine results.
There are many top level domain names available today including .com, .net, .org, and .biz. In most cases, the more unusual the top level domain, the more available domain names are available. However, the .com top level domain is far and away the most commonly used domain on the internet, driven by the fact that it was the first domain extension put to use commercially and has received incredible media attention. If you cannot lay your hands on a .com domain name, look for a .net domain name, which is the second most commercially popular domain name extension.
Long Arm of the Law
Be very careful not to register domain names that include trademarked names. Although internet domain name law disputes are tricky and have few cases in existence, the risk of a legal battle is not a risk worth taking. Even if you believe your domain name is untouchable by a business that has trademarked a name, do not take the chance: the cost of litigation is extremely high and unless you have deep pockets you will not likely have the resources to defend yourself in a court of law. Even stay away from domain names in which part of the name is trademarked: the risks are the same.
Search Engines and Directories
All search engines and directories are different. Each has a unique process for being part of the results or directory listing and each has a different way of sorting and listing domain names. Search engines and directories are the most important on-line marketing channel, so consider how your domain name choice affects site placement before you register the domain. Most directories simply list links to home pages in alphabetical order. If possible, choose a domain name with a letter of the alphabet near the beginning ("a" or "b"). For example, "aardvark-pest-control.com" will come way above "joes-pest-control.com". However, check the directories before you choose a domain name. You may find that the directories you would like be in are already cluttered with domain names beginning with the letter "a". Search engines scan websites and sort results based on key words. Key words are words that a person visiting a search engine actually search on. Having key words as part of your domain name can help you get better results.