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Peter2

Fastane Legend. RIP.
Aug 2, 2007
408
187
Palm Beach, FL
One hundred domains. Sounds like a good, round, impressive number. And 100 felt like a lot for Howard Hoffman, who began snapping up domains like HealthWater.com and SportsWater.com to help redirect web surfers to his bottled water company's site, taking advantage of what's called "type-in traffic," when users just enter words or a guessed-at domain into the browser address bar.
Hoffman then went on to purchase cityMagazine.com-type domains, like SantaFeMagazine.com and MontereyMagazine.com. Then he found out just how big his new hobby could get: "I e-mailed or spoke with people who owned a thousand or more domains," Hoffman recalls.
That was more than 10 years ago, and today, Hoffman still runs his water company (recently rebranded as o2cool.com), reinvesting any and all profits in the company, while earning his living strictly from domaining.


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"Like most people in the business, my wife thought I was crazy, wasting time and money on domains," says Hoffman, who lives in Palo Alto, California, and also runs PPCIncome.com, a review site for domain parking services. "However, she now understands how good it's been that I stuck with domains."
While the real-world real estate market has taken a nosedive, the domain name market is hotter than ever. GoDaddy.com recently announced its 30 millionth name sold; the company registers, renews or transfers domain names at the rate of one per second these days.
"Domains have held up remarkably well," says Ron Jackson, a domain-name investor as well as the editor and publisher of DNJournal.com, a magazine that compiles statistics on the industry. "In the first six months of 2008, total reported sales in the domain aftermarket rose 11.6 percent over the first half of 2007 when the overall economy was in dramatically better condition than it is now."
There are a finite number of domains available--especially .com names--and as more folks go online (1.4 billion at last count, according to Internet World Statistics), internet real estate is growing ever more valuable.
"Domains have been able to defy economic gravity," Jackson says, "because so many traditional businesses are moving online to take advantage of the cost savings and global reach."
Domain-name investors (otherwise known as domainers) purchase domain names from registries like GoDaddy.com; auction sites like Sedo.com, which recently auctioned pizza.com for $2.6 million and vodka.com for $3 million; or from the domain owners themselves. Then they have three options for monetizing the site: They can "park" the domain, placing relevant ads on it to generate money; they can sell the domain to an interested party or at auction; or they can develop the site into a real business. Most domainers seem to park sites--either permanently, if ads bring in enough cash, or temporarily, while waiting to sell the name or develop the site.​

Getting Started
The barrier to entry for domainers is nil to zero--great if you're low on funds but bad because the competition is stiff. In a market where Fund.com sold for $9,999,950, iReport.com for $750,000 and even 248.com for $175,000, you can see why so many people are viewing this as the latest gold rush.
"You can definitely do it part time, and, in fact, I think that's the best way to start," Jackson says. "This business is open to people from all financial backgrounds. A domain costs less than $10 most places, so you can start with very little. Those who already have a lot of money can afford to buy more attractive assets right away, but others can certainly build up to the major player level. Over the years, I've seen many people become millionaires."
To just leap in is to risk wasting your money and time, however. Much research is required if you're going to be successful.
"First, domaining is not a get-rich-quick scheme," says John Motson, author of the e-book, Domaining Manifesto, proprietor of industry blog DNXpert.com, and owner of more than 1,000 domains, including a few valued at more than $100,000.
"Yes, you can earn a lot of money with the right investments," he explains, "but first you have to put the hours in. You should do a lot of research, follow popular domaining forums and domain news blogs and, in general, feel your way in."
Motson describes the current domain name market as a ladder--a few on top have the most sought-after URLs and are bringing in big bucks. The midlevel is full of domainers who've been working at this for awhile or who, according to Motson, "saw an opportunity to invest in quality domains at the right time." The "bottom dwellers" are the newbies trying to get into the game by flipping small-time domains.
"The thing you have to remember, though, is that due to the nature of the domain industry, the road from the bottom to the top can be quick," Motson says. "All it takes is one smart investment."​

An Ever-Changing Market
While it's inexpensive to enter the domain business, you've got a steep learning curve and immeasurable competition. You also have a perpetually shifting market to follow.
There are many more top-level domains (TLDs) than .com, .net or .org. Country-code TLDs (ccTLDs), two-letter extensions such as .uk or .ca, can be popular if the code is catchy, like .tv (Tuvalu) or .me (Montenegro). The Montenegro code, which was released this month, caused a frenzy in the market, and technical difficulties (and bad press) ensued for GoDaddy.com when some buyers were told, minutes after making their purchase, their desired domain was no longer available.
Paying attention to these ccTLDs and other gTLDs (the 21 generic TLDs like .com, but also newer ones like .asia and .travel) can be a smart move, but it's all part of the research and due diligence.
Both Hoffman and Jackson have a soft spot for the .us domain. Hoffman says he "holds a significant portfolio of great one-word and city domains" like desk.us, Honolulu.us and grandparents.us.
Says Jackson, "I like America's country code, .us, as a long-term growth play. With most good .com domains long gone, I can see small businesses in the U.S. utilizing their country code, doing what their counterparts in Europe, Asia and other parts of the world have already done."
Motson believes that newer codes like .asia and .me can provide great flipping opportunities, noting that someone recently purchased LasVegas.asia for $4,350 in an auction on Pool.com and then flipped it for $30,000 at a Sedo.com auction.
"That's quite a profit in anyone's eyes," he says. Motson also predicts that all the good .me domains will soon be gone, but that "the future will bring new domain name extensions and new investment opportunities."
ICANN (the International Corporation for Assigned Names and Numbers), the body that's responsible for domain name and IP address assignment, shook the industry up even more in June with the announcement of the new gTLD program, which would allow established "entities" to apply for new gTLDs outside of the current 21 offered--presenting the possibility that sure-to-be-popular extensions like .nyc or .bank, for instance, might soon be up for grabs. The program is set to begin next year.
This latest news, however, may only affect those corporations and organizations with budgets large enough to advertise their new and unusual URL.
"Personally, I think it will have little impact at all," Jackson says, "especially on .com, which has been permanently branded into consumers' minds through billions of dollars' worth of corporate ad spending over the years."
No matter what effect the new extensions have on the market, the bottom line is that there's still room for players, both big and small, in this ever-changing, online real estate market.​

 
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MJ DeMarco

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Bump...
 

mtnman

Bronze Contributor
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Oct 3, 2007
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I would have to agree. I blew some money on worthless domains in the beginning, but that's a SUPER cheap learning experience even though the article refers to it as a "steep" learning curve.
 

Excalibur

Contributor
Read Fastlane!
Mar 6, 2010
64
74
Nampa, ID
I bought RefreshExpress.com, because at the time that's what I wanted to rename my shave ice business to be a combination stationary/mobile business.

But after asking several people what came to mind when I mentioned Refresh Express, none came even close to shave ice, or at least a refreshing, cool treat.


So I let it expire.

Now I see someone has it and trying to sell it for $1,895.

Then again I prolly shouldn't have asked anyone and just went with it. Or at least kept it and possibly developed it into something to sell.

No one knew what Apple, Walmart, or Amazon was before they came into existence.
 
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BeachBoy

New Contributor
Read Fastlane!
Jul 12, 2011
256
13
Interesting.

but as it has been told already, if your site is great, it can be named anything, even unreal words.

paying top dollars for a website name is because you 1- have a huge marketing budget and 2- are getting in a very crowded area and one way to get noticed is to have THE domain name for it...

IMO, any domain that has no content (or has only link farms or landing pages) after 2 years should not be allowed to be renewed.
 

fm1234

New Contributor
Aug 19, 2011
27
7
I don't get it. The internet is an expanding resource, so the existence of certain kinds of sites (whatever kind) do not hurt it. Do we seize land from people who refuse to develop it, or who use it for trivial purposes? Do we seize stocks from people who are just sitting around waiting for them to go up in value, rather than having any legitimate interest or concern with regards to the company that issued the stock?

Why are linkfarms any worse than any other kind of site, promotional or otherwise? (My point is not that linkfarms are not trivial crap; rather, that presuming the ability to make a reasonable judgement call that will be shared by enough people to enforce it, but not immediately be expanded to some other kind of site "because of all the good it did" is foolhardy.)

What happens after two years? I mean, if after two years the domain cannot be renewed, does it pass back into general availability? What keeps a given person from simply re-registering the domain? What happens to private whois data? For that matter, what happens to a domain industry worth hundreds of millions if not billions of dollars if it is to be excised like a boil by the two-year rule? Or will it be like other industry regulatory schemes, where established players get "grandfathered" and only newcomers to the business get the shaft?

Just saying ... the idea seems to open more cans of worms than it caps.


Frank
 

BeachBoy

New Contributor
Read Fastlane!
Jul 12, 2011
256
13
unused land around developped areas is as much waste as unused domain names.

I don't know about the US, but here if you get a building permit, you cannot let your house sit half done for years. You need to build within a timeframe.
And on top of it, you need to build somthing good looking, and withing a set of rules.

I'm not saying to regulate everything online, but I sitll find that way too many domains are unused.

Also, if you have a great company name, you can doa B&M store with that name, and someone else can also create a business with the same name if it's in a different field.
But with internet, for a few $, you can lock in a name that no one else in the world can use, even if you never do anything with it. It's like if I was not able to register a company name called ABC because someone had bought for $2 the name ABC and no one else could use it, worldwide...
 

fm1234

New Contributor
Aug 19, 2011
27
7
posted by BeachBoy:
unused land around developped areas is as much waste as unused domain names.

Lots of things go unused though ... you don't seem to advocate seizing unused land strictly because it is unused. I'm just trying to flesh out what you are suggesting, ie. the logic behind a limit, and more particularly what happens to the domains thus "freed" and just what constitutes a wasted domain to you -- some of the most valuable domains on the Internet go to parking pages, or are redirected to other domains; these were certainly not bought for $2 or reg fee or anywhere near it anytime in recent history.

I'm not saying to regulate everything online, but I sitll find that way too many domains are unused.

Ot used in ways of which you disapprove (landing pages, link farms, etc.) which can tend to lead to a real slippery slope when trying to form regulation -- everybody disapproves of something.

Also, if you have a great company name, you can doa B&M store with that name, and someone else can also create a business with the same name if it's in a different field.

That's not entirely true. I can start a company called, say, Southeastern Lumber Supply. Absolutely no one could go across the street and open a company called Southeastern Lumber Supply. If I open my business, but never actually get in any supplies, as long as I'm paying the $75 a year to the city for the business licence and am otherwise up on rent or property taxes and other related expenses, I for all intents and purposes own that name, at least in this area, despite the fact that there are no doubt many thousands of companies called "Southeastern [Something]" in the southeastern US, and probably even a few called "Southeastern Lumber Supply." If I've filed for the name with the state as a corporate entity, then no one else in Alabama will have that name. If I domain SoutheasternLumberSupply.com then no one else will have that, although other companies might want to grab the .net, .org et al. and are free to do so, within the limitations of the UDRP's trademark guidelines.

But with internet, for a few $, you can lock in a name that no one else in the world can use, even if you never do anything with it. It's like if I was not able to register a company name called ABC because someone had bought for $2 the name ABC and no one else could use it, worldwide...

Registering a company name and a domain name are two separate processes. Not all companies have domain names that match their company names. Not all companies have "brand names" that match their company names (AT&T and 3M come to mind; everybody for all intents and purposes knows these companies by those names, although those are not the names of the companies but branded acronyms.)

Just saying -- the idea and its implementation are a lot more complex than you may be thinking, even starting with how you qualify a domain as "unused" or even more nebulous, "wasted."


Frank
 
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