Domains are attractive investments

It appears that investing in domain names is getting increasingly lucrative. Good domain names are indeed rare and many entrepreneurs would pay a fair amount of money to acquire such a coveted space on the web. Moreover, the decreasing number of available good names makes prices rise.

That’s what recently revealed itself at a domain name auction organised by Sedo, where went for 300,000 dollars and won first prize with a selling price of 10 million dollars. Many find these sums phenomenal or even overrated. Others think that investing in domain names is an excellent business. And if we go by a couple of examples from history, we should conclude that the latter are right: when Jake Winebaum of eCompanies Ventures paid 7.5 million dollars in 1999 for, he made the press as a reckless man. But in July 2007, this same domain name was sold to the American publisher of the Yellow Pages for 345 million dollars – 47 times the price Winebaum paid for it.

In the meantime, the early investors are already making good money. One of them has become quite a celebrity, like Rick Schwartz a.k.a. the “domain king”. He owns 6,000 domains, among which, and He doesn’t do much with most of these sites: he puts ads on them and uses them to transfer visitors to other sites. But that alone does make him millions of dollars. And of course, there’s always a chance that he makes profit by selling some of those domains to interested parties. Among other domains, Schwartz owns, a site that welcomes over 1,500 visitors a day. In 1997, he bought for 42,000 dollars – and everybody thought he was crazy for doing this – but each year, the site produces an income of over 1 million dollars via ads. Schwartz sold for 1.3 million dollars; the domain, which he bought for 100 dollars in 1997, was later on sold to CNN for 750,000 dollars.

Many good generic names are still available in English, but that won’t last forever. Therefore, it is advised that those of you who would like to develop their company through Internet under a generic name reserve that name as quickly as possible.

More info on domain name trading.