Valuable Advice When Investing in Domain Names

November 24, 2011 by  Filed under: Domain 

Domain names, when wisely invested can be quite lucrative, just as investing in real estate would be. It’s picking the right name, following the registration requirements and selling or trading at the right time. With any investment, you want to be well informed of exactly how and when you can turn a profit and there are important considerations before you want to even make your purchase.

The shortest name is almost always the better option. Phrases are ok, and some of them will get a lot of hits to your site or get you plenty of offers for decent money, but keep in mind when people are doing searches they usually just put one or two words. The less words, the more hits you are likely to get.

Avoid domain names that have hyphens or numbers. People rarely if ever put either of those in their searches.

If you have never purchased a domain name before and want to use one for your business, website or as an investment, you may want to ask around and find someone that has invested in it before and take all the advice you can from them. Find out what hurt them and how they negotiated the value. You may also want to seek advice from a business advisor or domain name appraiser. It may cost you a little bit of money, but a small cost in the beginning could lead to big profits in the end.

Become familiar with ICANN (the Internet Corporation for Assigned Names and Numbers). ICANN governs extensions i.e. .com, .org, .edu, etc. from around the world, with its headquarters in California. Certain extensions have different rules and regulations, so your location could affect the rules and regulations you are governed by.

Don’t just buy a domain name from anyone. Do your research and get the background on the seller. Make sure the seller actually has the name registered and owns it. They should be an accredited owner. There is a website called WHOIs that will tell you exactly who owns what name. In Australia, the name for the WHOIS website is AUda. Australia has some different rules they go by.

People often forget to register their domain name and could therefore think they own it, and did at one point, but if the don’t register it every year and pay the $10, the name goes up for grabs again for anyone that wants it. When buying, be sure to notice the registration date and if it is less than 60 days old, it is not a legal sale.

There is no formula in purchasing a domain name, just as there is no formula in purchasing a home. It’s about knowing the rules, regulations, registration requirements, etc. and going from there. The most important thing is picking a name that everyone wants. The more people that want it, the more valuable it is and will give you great negotiation power when selling or trading. Always do your research when investing. Look at background on everything as well as consider the future of that name. Will a name that is valuable now be valuable in the future? For example, would VCR’ be as valuable today as it was 25 years ago? No. Of course we didn’t have the internet in the 80’s but hybrid cars are going to become more and more popular with the oil issue right now so is probably a valuable name that will continue gain more and more value as time goes on.

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