Is Domain Name Speculation Big Business?

November 24, 2011 by  Filed under: Domain 

A friend of mine received an email telling him that his domain name was up for renewal from a different company to where it was registered and this alarmed him. Actually, it was nothing to worry about because the hosting company had merely changed ownership.

Depending on who you believe, there is a supposedly roaring trade in domain names. I know some of the names that I see for sale, thousands of dollars are being asked. I suppose when a person buys a domain for $10 a year, even if it takes ten years before the name is sold for some exorbitant price, the profit is huge. This is especially so if some one pays $10,000 for the domain name. In which case, what is $100 holding costs when a profit of nearly $10,000 can be made. If anyone is able to do this on a regular basis, like once a month, then this has to be a good business.

Many have tried to do this and found that there is not such a rush for names. Why would a person go to the trouble of spending up big time to get a domain name when any number of variants will do. Besides, dot com is not so important any more. These days there are any number of possibilities available with more top level Internet domains being brought on line every year. Whereas .com was the domain to have in years gone by, these country specific and industry specific top level domains are created. This has diluted the field and thereby speculators are not able to hold people up to ransom as much.

With the use of .net, .biz, .info. .name, .blog. .tv, .org. .edu, and regional (.asia) and country specific domain names, the opportunity for speculators to corner the market has diminished. Not only are people able to have a variety of top level domains at their disposal, it is also possible to have variants of what every name a person may choose to use.

For instance, say you are into dogs. Well dogs.com is gone, I’m sorry. But you might be able to have variants like my-dog.com or my-only-dog.com. I am suspecting that mydog.com is gone and myonlydog.com is also taken. Still, you get my point. And, if you are providing an information service, then you might like to use .info domains.

One source I read claims that many speculators are still holding onto domain names in the hope of getting a good profit from selling them. I see quite a number of domain names for sale. If you were a speculator, unless you happened to come across something generic in a specific country that would be highly sought after then, don;t get your hopes up. Still, if you do your homework and discover that, say, horse.ws would represent a fantastic opportunity in Western Samoa because the Islanders were horse mad and the domain name is available, you could make a killing.

To answer the question “Is domain name speculation big business?” I would be inclined to say that it is not as big as some thought it was going to be. More to the point, domain name speculation is a very selective business, which still provides some opportunity for speculation.

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