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?
Hide this

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team


Reader Comments

Subscribe: RSS

View by: Time | Thread


  1. identicon
    Ray Deez, 10 May 2006 @ 11:05am

    Domain Name tom-foolery

    I recently read the blog of Godaddy's founder at http://www.bobparsons.com/adddropscheme.html
    He explains another way people are making money on domain schemes.
    Not illegal, but not nice either....

    link to this | view in thread ]

  2. identicon
    Dr. Daemon J. Thrion D.D., PhD., 10 May 2006 @ 11:10am

    Shorter names?

    "Hmm, is there any way to short domain names?"

    How about http://www.shorturl.com/ :^)

    link to this | view in thread ]

  3. identicon
    J Taylor, 10 May 2006 @ 11:23am

    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.

    link to this | view in thread ]

  4. identicon
    Anonymous Bum, 10 May 2006 @ 11:38am

    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.

    link to this | view in thread ]

  5. identicon
    pl, 10 May 2006 @ 11:41am

    godaddy doesn't sell data, and neither does frugalname

    link to this | view in thread ]

  6. identicon
    Ivan Khanine, 10 May 2006 @ 11:52am

    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.

    link to this | view in thread ]

  7. identicon
    Dr. Freud Langer D.D., PhD., 10 May 2006 @ 12:21pm

    Tikiti

    Its awhoretrain.com? That certainly must be in reference to MySpace.

    link to this | view in thread ]

  8. identicon
    Buck, 10 May 2006 @ 12:45pm

    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.

    link to this | view in thread ]

  9. identicon
    Bob, 10 May 2006 @ 12:45pm

    Re: Shorter names?

    I think Joe was referring to Selling Domain Names Short, like short selling stock.

    link to this | view in thread ]

  10. identicon
    Curious George, 10 May 2006 @ 1:21pm

    Profits?

    I know this won't seed your retirement nest egg, but do you make enough to buy a couple extra beers off those names?

    link to this | view in thread ]

  11. identicon
    Buck Too, 10 May 2006 @ 1:41pm

    Murmp.com

    Kinda google-esque. I would entertain offers, but I do have a few plans for it. Its pretty catchy, 5 letters, and easy to spell once you figure out what it is.

    Bids anyone?

    link to this | view in thread ]

  12. identicon
    Scott, 10 May 2006 @ 2:44pm

    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!

    link to this | view in thread ]

  13. identicon
    Chris Parente, 11 May 2006 @ 11:32am

    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:

    http://www.mikeindustries.com/blog/archive/2005/03/how-to-snatch-an-expiring-domain.php

    Chris Parente
    www.gotostrategic.com

    link to this | view in thread ]

  14. identicon
    Mike, 12 May 2006 @ 7:30pm

    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

    link to this | view in thread ]

  15. identicon
    Michael, 14 May 2006 @ 1:18am

    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?

    Regards,

    Michael Rad
    Web2earn.com – learn how to make money online

    link to this | view in thread ]

  16. identicon
    Jon, 20 May 2006 @ 10:48am

    The Real Story

    For the real story on the domain name business see DNJournal.com (especially the Weekly Sales Report) and DNForum.com.

    Diamond.com just recently sold for $7.5 million.

    link to this | view in thread ]

  17. identicon
    Ivan Khanine, 22 May 2006 @ 2:14am

    Re: Profits?

    Nope, not there to make a profit. I'm here to make a stand. I want to sit on these names for years to come. Maybe, when I DO make enough money that would allow me to create a brandable product. Until then, MY DOT-COMS!

    link to this | view in thread ]

  18. identicon
    s.f., 10 Jun 2006 @ 5:15pm

    Domain name:

    I am actually the owner of emega.com
    Short, catchy, and memorable, five letter domain name that has many uses.

    Comments on its value anyone?

    link to this | view in thread ]

  19. identicon
    Ivan, 16 Jun 2006 @ 1:10pm

    Re: Tikiti

    ... Yes. Yes it is. Very observant, doc.

    link to this | view in thread ]

  20. identicon
    Manager, 7 Jan 2007 @ 5:06pm

    This industry is alot harder than it sounds

    I think this Domain Name Industry is alot harder than it sounds, because sometimes it takes years before you can get an offer for your premium domain name or if you unlucky it might never sale. This is noway you can comparing this shady industry with real-estate investment.

    link to this | view in thread ]

  21. identicon
    Mark, 16 Mar 2007 @ 12:47pm

    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.

    link to this | view in thread ]

  22. identicon
    Ron, 17 Jul 2007 @ 5:57pm

    Yep. I just sold a domain for $US20,000. It had been dropped several years ago. Thought maybe it might make a few dollars - but the right company wanted it badly.

    link to this | view in thread ]

  23. identicon
    Streetz, 4 Feb 2008 @ 1:36pm

    Re: Shorter names?

    Obviously your PHD is not in finance. To short a commodity means to sell something as the price is about to drop in hopes of repurchasing it at a much cheaper price.

    link to this | view in thread ]

  24. identicon
    Ginny Crandall, 6 Jan 2011 @ 3:17pm

    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.

    link to this | view in thread ]


Follow Techdirt
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Discord

The latest chatter on the Techdirt Insider Discord channel...

Loading...
Recent Stories

This site, like most other sites on the web, uses cookies. For more information, see our privacy policy. Got it
Close

Email This

This feature is only available to registered users. Register or sign in to use it.