1. Buying And Selling Domain Names

by Das Brain

To have a presence on the internet the first thing any company or person must do is register a domain name. For example, sportswatch.com if the company wants to sell sports watches.

The domain name is the foundation, that all other services is built upon.
- Websites and blogs can be built once a domain name is registered
- Email services can be created for a domain name
- PPC (Pay Per Click) domain parking sites can be set up for a domain
etc…. you get the idea.

It is no wonder that keyword rich domain names are highly sought after and can be very expensive. Especially the one word and two word domain names. Three word names right now are in demand, but they generally have to have high value keywords in the domain name.
Take for example a one word domain like business.com . If my memory serves me correctly this sold for 2 million. I might be wrong but it is somewhere in the millions of dollars.

So, what makes a domain name worth a lot? There are many factors, however one major determining factor is based on what keywords it is comprised of and how often that keyword is being searched for on Google and Yahoo search engines. In the case of business.com, you can easily see that it is a one word domain which makes it extremely desirable and next you can see that the keyword is “business”.

When I go to the Yahoo keyword tool I can see that the keyword business was looked up 1,223,861 times in the Yahoo Search engine for the month of December 2006 (It gives last months stats). With that many searches on the keyword “business” and that fact that it is a one word domain name is the reason why it commands millions of dollars for the domain name. This gives you an idea how expensive domain names can get.

Yahoo Keyword Tool

Another determining factor of why these domain names command so much money is TRAFFIC. The reason why I capitalized and bolded the word traffic, is because if you are planning to start an internet business of any sorts this is pretty much the most important word. Just like in real estate they say “location, location, location” with the internet it is “traffic, traffic, traffic.” The keyword business with 1,223,861 searches a month, must also have people typing business.com directly into their browsers url field. This generates an enormous amount of type-in traffic which can be converted into buyers and ad clickers and thus big revenue.

For your information though, 99.9% of all keyword rich one word and two word domains are probably all taken or have been registered. And, they probably have been registered or acquired through domain portfolio buy outs by the large players in this space. They have deep deep pockets which small fries like me don’t. The reason why they are buying up all the good domain names is of course to monetize them. Either park them or develop them out.

For this reason, I don’t really participate in buying domain names for the sole purpose of selling them. My aim, is usually to register new domain names to see if there is traffic on it, and I would park them if there is traffic or develop the domain names out. If there is no traffic on it, I would try to sell it or cancel or just let it expire. The reason I would cancel it is because if it renews it will cost me another $7 a year. Imagine if I had 100 domains with no traffic and the domain names are not catchy for sale or good enough for website development, I should drop those domain names or else it is going to cost me another $700 to hold them for another year. I usually have to do this or else the cost will reduce my revenue.

If this sounds interesting to you, I would suggest you do some extensive amount of research before you commit to paying $500 or more for a domain name. A few places or businesses on the web that sells aftermarket domain names are pool.com, snapnames.com, domainsbot.com and sedo.com. Take a look, and see if this is something you want to get into.


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