Many of us have thought of “locking up” a killer domain name or Web address. Then, all we’d have to do is find a buyer. Some people with whom I speak tell me that all of the good domain names have been registered. Personally, I think that an enterprising and savvy person can still make a big score in online “real estate.”
Through the first half of this year, we have seen some domain names fetch in the millions: Porn.com — US$9.5 million; Chinese.com — $1.12 million; Topix.com — $1 million. I’d say that there still is a thriving and growing market for domain names, defined as an alpha-numeric designation used to identify a particular computer or address on the Internet.
Some Leaders in Domain Name Real Estate
There is a major player out of Waltham, Mass., called “NameMedia.” I recently went to their Web site, and here is how they describe their domain name marketplace:
“NameMedia combines the industry’s largest portfolio of premium domain names with SiteMarket, our domain valuation platform designed to drive the most dynamic marketplace for revenue-generating online properties.”
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According to an article in the New York Times, this company owns 750,000 domain names. It is playing a big role in the latest gold rush, the frenzy over prime cyberspace. With that many domain names in their portfolio, NameMedia certainly has critical mass on its side.
Another major player is Sedo.com, a German-based company with offices in the U.S. According to a recent article in the Boston Globe, this company “handles more than $3 million of transactions every month, acting as kind of an eBay for domain names.” That same article talks about Internet Real Estate Group that “takes a luxury developer’s approach to the domain name game.” This approach has focused on companies such as jeans.com, chocolate.com and software.com.
Incredibly (and rightly so, in my opinion), we’re now talking about domain names in the same way that we speak of real estate. It is — after all — real estate, albeit virtual or cyber-real estate. I have no doubt that the laws applicable to this type of real estate are adapting to accommodate this new and fascinating market.
The Popularity of Domain Names
A recent Google search of “domain names” gave me 112 million hits, dealing with such things as domain name registration, domain name sales, how to reserve a domain name and how to search for a domain name.
It is quite obvious that a major market has developed for cyber-real estate. In fact, venture capitalists are funding companies that are specializing in domain name acquisitions and sales. When venture capitalists start focusing on an industry, one can rest assured that there is a good probability that such an industry is here to stay and will remain profitable.
Just as the real estate industry has dedicated journals and magazines, so does the domain name industry. There is an online publication called the “DN Journal” that has quite a bit of data on the industry. This journal calls itself the “domain industry news magazine.” If you go to its Web site, you’ll see links to articles, legal matters and latest news.
Another online resource is a publication called “PlusDomains.com.” This publication has links to news articles, domains for sale and domain parking, among others.
The Future of the Industry
I consider the Internet as a virtual reflection of the entire world economy. Just about every business of any significance has a Web site — thus a domain name. In fact, many individuals presently have their own Web site.
With the economy constantly changing, and with so many new businesses and industries being spawned, I have no doubt that the future is a bright one for virtual real estate brokers.
The competition is obviously severe — it usually is. But by all means, if you can think of a domain name that someone or some company would covet, register it. It’s an easy process, and it’s relatively inexpensive to maintain an active domain name.
Some Tips on Naming a Domain
Since the world economy is constantly evolving, one has to be aware of which industries are coming into being and what names would lead Internet surfers to their sites. Then, it’s a matter of registering the name and keeping it active until either you are approached to sell it, or you go to a broker who will sell it for you.
Assuming that you have a domain name with cachet, you shouldn’t have any trouble disposing of it. The trick is to come up with a domain that will be actively sought after. There’s the rub.
Keep an eye on the economy and evolving industries. Then, try to create catchy domain names that would appeal to some of the companies in those industries. The rest is easy — you will either be approached to sell your domain name or a broker will approach you. In either case, you have nothing to lose.
Theodore F. di Stefano is a founder and managing partner at Capital Source Partners, which provides a wide range of investment banking services to the small and medium-sized business. He is also a frequent speaker to business groups on financial and corporate governance matters. He can be contacted at [email protected].