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Getting Rich Quick With Domain Names

Posted on 25. May, 2008 by Saarthak in Featured

A brief study into the history and present of the business of domain names, and how you might still be able to catch the bus to the millionaire’s club!

Pizza.com was recently sold for $2.6 million dollars by its owner, and this was just for the domain name, he hadn’t even developed a website on it! In 2006, diamond.com sold for $7.5 million while sex.com sold for $12.5 million! Meanwhile, porn.com auctioned in 2007 for $9.5 million cash. Again, these are just the domain names, which some enterprising people had bought and saved to sell at the right moment.

What’s so special about these domains that corporates and individuals are shelling filthy cash for them?

First of all, for the internet marketing noobs and the general public, here’s an introduction to domain names:

A domain name is the unique name that identifies an Internet site. Domain names have two or more parts separated by dots. For example www.lughole.net or www.google.com. In these 2 examples, lughole and google are the domain names respectively while .com is an extension.

You can easily buy a domain name from a domain name registrar (more about the process later in this article). A dot com domain registration will cost you between $8 to $10 and you will have to renew the registration annually.

Now, when a domain name costs just $10, how come they are being sold for millions?

Not all domains sell for millions of dollars. Some sell for thousands, some hundreds and some sell at cost price. Its the type-in-traffic these domains derive that matter. Common English words derive the largest amounts of visitors who simply type in the phrase followed by a .com (e.g. sex.com). Then there are others, like “lughole”, which is a more uncommon dictionary domain.

A dictionary domain is a single word that is a part of the English language (or any other language for that matter). The simple test for a dictionary domain is that it should exist in the dictionary of that language! Many people have bought dictionary domain names in speculation, hoping to sell them for thousands or millions of dollars in future. So meanwhile, these domains do not contain a website, but are on a prospective big sale by these speculators.

But not all dictionary domians are profitable investment, though surely most are. This brings us closer to a term called premium domains. Wikipedia describes premium domain names as follows:

In the business of marketing domain names, “premium” domain names are often valuable, and have particular characterizations: The names are short and memorable, may contain words that are regularly searched on search engines or keywords that help the name gain a higher ranking on search engines.

Premium domain names are the ones that fetch maximum money at domain auctions. Besides the ones mentioned earlier in the article, names such as funny.com, cute.com, article.com etc are premium domain names and surely get loads of type-in visitors.

So if you have the stamina to search for unique dictionary domain names that may turn out to be premium domains (I assure you all the popular ones have already been taken), go ahead! Here’s a simple step-by-step procedure for buying a domain name:

1. Register yourself at a domain registrar like GoDaddy or Sedo
2. Search for domain names on the site you have registered – they have the search domains functionality right on the front page.
3. Once you find your preferred domain available, add it to your shopping cart.
4. Add any other extra features you’d like with the domain to the cart. Once done, proceed to checkout.
5. Pay via Credit Card or Paypal (if the Paypal option is available) and you own the domain for a year! You will need to renew the domain next year by paying the renewal fee (which is usually the same amount that you spend on buying it). Don’t worry about forgetting to renew the domain, because your registrar will send you countless reminders for renewing it 3 months before it needs to be done and till the last few days.
6. Park your domain name(s) at Sedo, which is the largest domain-name after market. List your domain for sale there and till the time you find a buyer for it you earn cash from the parking it at Sedo – which normally means the guys at Sedo will put advertisements on it and pay you a commission from the revenue generated.
7. Alternatively, you could make a website out of your domain name. Making a website is really easy if you know some basic html. You would definitely earn more from your website than parking your domain, but then you also need to invest a meager amount. You will need to buy web hosting space to keep your website live once you have made it. I recommend Hostgator for hosting your site. It has a reasonable price structure and excellent service and support.

Its not necessary that you go for dictionary domains to create your website. Enterprising people come up with unique and amazing names for their sites which become brands in themselves. Names like youtube, google, metacafe are household names, and yet these are nowhere mentioned in the dictionary. Such internet behemoths have given the webmaster industry a new phrase – brandable domains. What really is a brandable domain is a matter of speculation. Neil Patel has a good article on choosing a brandable domain.

Its not easy to buy a domain now that you can sell in millions, but if you try hard, you can get domain names which may sell for hundreds or thousands of Dollars; and that my friend, is still a fabulous return on investment!

Important: always try and get your hands on a .com domain. All other variants like .net, .org or .info etc are also fine, but a dot com always has the maximum branding power.

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