Pumping Up The Domain Name Speculation Bubble

from the buy-and-hold dept

A few weeks ago, USA Today wrote about how much money there was in domain name speculation. Now, the same author is taking a look at the people behind the business. They view the business the same way a lot of people view real estate investment, that it’s as easy as buying a property up, sitting on it, and then — voila — selling it for more later. As we noted before, there seems to be a total lack of skepticism about the strength of the market among the participants and by the author of the article. There are trends that may undercut the value of the market such as greater use of search engines (are people still just typing in clothes.com when they’re looking for an online clothing retailer?). Also, ICANN isn’t slowing down on approving new domain name suffixes, each time diluting the value of the existing ones. Perhaps their naiveté is actually a shrewd business strategy. Almost any time a domain name speculator is interviewed in an article, they seem to go out of their way to talk about how easy the business is and how anyone can do it, which sounds like a tacit invitation for fresh fools to keep bidding domains up. As with anything else, anytime you start hearing how easy it is to make money, and how anyone can do it, it pays to be cautious. Hmm, is there any way to short domain names?

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Comments on “Pumping Up The Domain Name Speculation Bubble”

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J Taylor says:

most domain name lookup sites illegally sell data

You type in your desired domain name. It says it is available. Then after a few minutes you click on “buy”. Already it was just taken that very day. Why? Because the same people who run domain name lookup sites also buy desired domain names.

Somebody call the DA already on these people.

Anonymous Bum (user link) says:

Starting an appraisal business for stupid people

This is so stupid. Content and or services create revenue, not domains.

I should start up a domain appraisal business for all the idiots quitting their day jobs to open an ebay store in their basement. I am sure I can schuck Thirty bucks for a worthless appraisal saying how valuable their online property is.

Ivan Khanine (user link) says:

Re: Starting an appraisal business for stupid peop

The business in domain names isn’t necessarily, a content-based type of site. As a recent advocate for the “domaining” hype – I see it as more then just creating a name, or an “ebay store”. A lot of people are creating domain names, and parking them with AdSense codes in order to make revenue.

In order for this to be successful, you need to feed off the “mainstream” sites that have already made it big, for instance, MySpace.

MySpace is a great medium for advertising and networking for people that are in the market for your business. It’s much more then just creating an eBay sotre. Its getting a “brandable” dot-com and sitting on it for a while.

Me personally, I own a few domains. Including, ThatPig.com, InsomniacGroup.com, FreakinAssholes.com and aWhoreTrain.com.

The first three, are brandable. The last one, is purely for advertising and marketing purposes running off the MySpace craze.

Buck (user link) says:

Sometimes it is just a impulse purchase

I bought http://MyFreepress.com (years before MySpace) because I was hoping to sell a website to the local newspaper (Winnipeg Free Press). I just thought it sounded better. They didn’t buy it, and I got stuck with the purchase.

I use it, but I would sell it in an instant for a decent buck.

I also bought http://ConsumerEnergyAudit.com for the same reason. I thought I was going to sell it as part of a website deal. I just kept the website and stuff for myself in the end.

Scott says:

Not like real estate

When you buy real estate, it takes a significant investment and there is a lot of risk.

When you squat on domains.. you pay $9 to godaddy, then turn around and sell it for thousands.

I don’t have a lot of money and whenever i am searching for a new domain for some new web project, it takes me forever to find a decent name because they are all taken by squatters!

Chris Parente (user link) says:

The Domain Game

Agree with point in the article that search engines are changing the nature of web navigation, making the perfect URL less vital. But disagree that new TLD’s blessed by ICANN reduce value for the established .com, .net etc. There would have to be big time adoption of alternative extensions like .biz and .info to affect the value of a top quality .com, which hasn’t happened. And globally the national TLD is the most desirable, unlike here in NA.

.mobi may be an interesting new one, if it’s adopted as planned to signify sites optimized for display on mobile devices.

For an explanation of how to get an expired domain name, this is the best description I’ve ever read:


Chris Parente


Mike says:

Domains is BIG.

I myself am in the “domain business” and have made quite a few bucks selling domains. I recently bought short domains and made lists of untaken short domains that sound “cool”.

Domains can sell for 10.00-1 million+ (dollars)

It’s happened before and can happen again. Since a shorter domain name means people are more likley to remember it, more people will come back each day (especially for companys). This is the same reason behind “cool” domains.

Not anyone good do it. Some people might put in 6 random keys “aaa

Michael (user link) says:

Expensive names

I’ve heard a lot of stories about domain name importance. However, check out the figures below – here are the top five most expensive domain sales in the last few years:

Business.com – $7.5 million

AsSeenOnTv.com – $5.1 million

Altavista.com – $3.3 million

Wine.com – $2.9 million

Autos.com – $2.2 million

I am not sure how such an investment – paying millions of USD for a simple name – can be recovered and used to produce profit. There was a story about Coca-Cola, which said that if the company lost all its infrastructure, but kept the name and brand characteristics, it could bounce back in about 4 years. However, if the company managers were left with all the infrastructure, but lost the Coca-Cola name, the company would be very likely to go bankrupt. Do you think this is also true for domain names?


Michael Rad

Web2earn.com – learn how to make money online

Mark says:

The thing is you don’t have to make a lot of money on domains. Since you can register a .com name for $6-$8 a year all you do is have to generate enough traffic to that site to cover that small amount.

This results in a massive amount of cybersquatting which helps nothing.

If you can’t make a useful webpage and a bunch of links isn’t a useful webpage and it’s easy to see a page that is links and google adwords it’s worthless

This needs to be stopped.

Ginny Crandall (user link) says:

On the whole, I’m not a fan of the “short selling” aspect of business. If you want something then you should hold on to it, not sell it in the hopes of making a quick buck off of it. I’m also not a fan of domain squatters…if you aren’t going to use it, then don’t buy it and let someone who will have it. It’s worse than the people that buy home exercises systems and expect to be thin the next day.

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