How to invest in domain names

[icesar]

I've been dabbling in domain name investment now for a little over a year, and I'm wondering if anyone here has had any success with it. If you don't know anything about it, I wrote a short introduction to domain name investing on my blog. The basic idea is that there is a certain class of domain names that A. appreciate over time and B. return a monthly income because of natural, type-in traffic. It seems like a great way to generate a residual income.

[Mayo]

Well, yes you could make money on that crap... But it is not 'sellmydomain4MM's.com' that will make you money, or the fool that buys the domain from you. It is "this-is-a-crappy-name-domain-with-1st-class-service.com' that will make you money, and nothing else.

[icesar]

I completely agree that as a business, the domain name is secondary and it's the service or product that you provide which is of value.

But I'm asking about domains as an investment vehicle, something that you can buy and get a yearly return on, much like a bond or a rental property.

I know that this is possible because of type-in traffic, and I'm wondering if anyone has had any experience with it.

[JiriNovotny]

It's not much creative, and not a big contribution to society.

I would rather build USEFUL websites, it might be not as easy, but much more purposeful and fulfilling.

Do you like these domains with just ads on them that you come to from time to time (aka spamsites)?

Plus someone who actually might use the domain name can't get it since it's taken already.

It might look exciting, but look at it from the higher perspective.

Just my two cents

[da1prophet]

Originally Posted by icesar

I completely agree that as a business, the domain name is secondary and it's the service or product that you provide which is of value.

But I'm asking about domains as an investment vehicle, something that you can buy and get a yearly return on, much like a bond or a rental property.

I know that this is possible because of type-in traffic, and I'm wondering if anyone has had any experience with it.

I agree with the previous poster....its not really something that adds a lot of value to society. I also don't see it as something you could be really passionate about.....

I think what you're thinking of is what is known as "domain parking". Basically, you buy domain names and when people go there they get a list of sponsored links. What some people have done is buy what are essentially "typos" of well known domains hoping to get traffic from people who type in the names incorrectly. Here's an example of what I'm talking about:

TARGETS.COM: The Experts in Targets

They're likely hoping to get traffic from those who are looking for the department store, as well as those who are looking for targets to shoot at. They've got a simple web page with nothing but sponsored links.

Now there's nothing inherently "wrong" or "evil" about it I guess--I own a bunch of domain names that I'm not actively using right now and the domain registration company sets up "parking" pages on these with sponsored links and makes some money off of them. I could easily set them up with a third party who'd serve a similar "parking" page and give me a cut. I just haven't really considered it to be worth my time and effort. I'd rather wait until I can develop them into something useful...

Furthermore, if you're hoping to get traffic based on the "typo" sites it may be a situation where technology is quickly going to put the kibosh on that. I use a service called "OpenDNS" which self corrects typos--so if I type in "Gogole.com" it corrects it and sends it to Google. If there *is* someone with a parked page on "Gogole.com" I never see it. It would be very easy for ISP's to implement this sort of thing on their DNS servers, and there goes your "typo" market.

If you can come across some good domain names, you can always try to resell them on the secondary market for a profit (and set them up with "parked" search results pages in the process). At this point, however, its gone from passive income generation to an actual job...

A problem with that, however, is that ICANN (the organization that administers domain names) has a process by which a business can "claim" a right to a domain name. Say you got wind that Apple was going to make a broom and call it iBroom. In advance of that you went out and registered "iBroom.com". Apple might try to cut you a deal for the domain name, but they could also claim a proprietary right to the name and dispute your ownership of it. In situations like this companies will frequently just try to work out a deal with you, but they have a recourse if you try to get too much money out of them.

Bottom line--there may be a way to make money with domain names but its more likely a full time job rather than some sort of investment or passive income generation technique.

[icesar]

Thanks for the extensive responses guys, I agree that it doesn't add much value.

[JiriNovotny]

BTW...

Even if something doesn't add much value, it can still be used as a temporary tool to change your current financial state, so you can actually do something that adds value.

However, this doesn't look like a useful tool like that, because it would consume way too much time to have a meaningful income from it.

[prasad_lg]

I know one person who is part time domain investor he has mre over 10,000 names ( you read it right.. ten thousand).. He parks his domains on different parking sites. He makes around 1000$ a month from all his domains. He sold his domains for over 85K USD last year. if you see the stats- he made good money on his investment last year. Luckly- he got a domain name which is expired for 15$ whcih is fetching him 300$ a day from parked page alone due to a merger of 2 big companies recently.

I would say- Domain Investment is 'Buying a vertual property'. If you get a great name, you can sell it at great prices. Else- It will be a burdon for you to drop it or renew it.

If you can build a website with good SEO, any domain name would fetch you what you want.

Good Luck

[Mayo]

Yes, there are a lots of domains that made a buck, just like (^_^) sex.com for 14MM$US, shemale.com for 0.5MM$US,....

But,.... if you own a domain name that you can potentially sell for MM's$US, why then not earn that 500K$US every year after year, instead of once walking away with tens to hundreds of thousands of dollars why not walk with that same money year after year after year..... ??

The point is: the domain name doesn't worth a sh#% if you don't have a real BUSINESS! It's like you sold hot Montecarlo property for a MM$US, but you later slam your self on the head because you could make MM's year after year and still own that property, and if you get fed up with that property you could sell it for 10MM$US(and running it you made another 10MM$US, i.e. 10+10 = 20MM$US) instead of one million. What you would prefer: one million without working your butt of, or twenty times more while working your butt off??!!

I personally chose to do the second thing, working my butt off. There was never a free meal and never will bee(except if you are willing to be a bum), i prefer to eat some fancy meal on my private yacht(^_^), if you prefer to stay at the local thrift bar so bee it, if you want that fancy life style than you have to WORK for it.