Bounce Back from the Housing Bubble Blues

Mike Riggs | August 4, 2008

Feeling a little down on your luck after failing to flip that refurbished 1br/1bath bungalow just outside Ft. Lauderdale? Or maybe you're flailing to get out of a subprime pit? I suggest you look into the sale and trade of domain names:

[T]he domain name market is hotter than ever. GoDaddy.com recently announced its 30 millionth name sold; the company registers, renews or transfers domain names at the rate of one per second these days.

"You can definitely do it part time, and, in fact, I think that's the best way to start," says [Ron Jackson, a domain-name investor as well as the editor and publisher of DNJournal.com]. "This business is open to people from all financial backgrounds. A domain costs less than $10 most places, so you can start with very little. Those who already have a lot of money can afford to buy more attractive assets right away, but others can certainly build up to the major player level. Over the years, I've seen many people become millionaires."

The downside: Sales of domain names are subject to some kooky laws, such as those pertaining to cybersquatting; combine said legal obstacles with the reluctance of the Internet Corporation for Assigned Names and Numbers (ICANN) to increase the number of top-level domains (which would increase the number of potential domain names by an unimaginable exponent) and what you get is a market in which a memorable URL costs more than that stupid bungalow:

Sometimes, the payoff is huge. Online entrepreneur Gary Kremen snagged $12 million in cash and stock this year when he sold Sex.com to Escom, an adult-entertainment company....

"Those who understand domains and what they represent, can and have done very well," says Schwartz, 52, who sold Men.com for $1.3 million in late 2003, a huge profit from the $15,000 he paid for it in 1997.

Psst, looking to invest right now? As far as I can tell, no one has bought www.durtygurls.com.

Jesse Walker wrote about ICANN here. I wrote about ICANN here and here.

Comments

Episiarch|8.4.08 @ 2:27PM|#

Psst, looking to invest right now?

ICANN'T. Don't you know we're in a recession?

|8.4.08 @ 2:33PM|#

Zing!

I did not--absolutely did not--see that coming.

tim|8.4.08 @ 2:44PM|#

A five second search shows that "durtygurls.com" is owned by someone.

The domain name market isn't really worth it unless you snag names that are can generate advertising dollars or you are lucky enough to have a domain name of a new product that is being launched. I still happen to own a dozen domain names from the 90s - two of which I sold last year for a few thousand each. The names they reference in the article are rare and doesn't prove their point.

|8.4.08 @ 2:56PM|#

I own foamscape.com I've no plans to sell, but if anyone offered me $1,000,000 I'd give it some serious thought.

Episiarch|8.4.08 @ 2:58PM|#

I did not--absolutely did not--see that coming.

Well, I am a ninja.

|8.4.08 @ 4:57PM|#

I'm having trouble flipping my chronicanalleakage.com domain. I should get some tips from the guy who sold sex.com.

|8.4.08 @ 6:17PM|#

Chronic Anal Leakage, like Educated Stupidity, would be an awesome name for a blog.

|8.4.08 @ 7:07PM|#

Domain names are wide open still. I have a list of domains that are all words and phrases that get heavy search volume for the exact phrase. I don't buy to flip, though. I buy for the residual income.

FWIW,
When 1 domain I was looking for was taken I ran the whois and it was owned by someone I have seen post on many libertarian political blogs. His company had over 600,000 domains! I only have a few hundred ( Not a domainer or squatter- I develop content around 99% of them with the obvious exception).