Monday, October 30, 2006

The Domain Name Business

I found this blog post by John Chow on something referred to as "domainers," people who make money from domain name speculation and ad parking.

It is an interesting read for anyone with entrepreneurial curiosity of the online sort, though I have trouble believing some of his figures. Regardless, you don't have to accept his numbers in order to believe that domain name speculation is, or should I say was, a lucrative business. If you had spent the early '90s grabbing any and every short and sweet domain name and you actually had the foresight to hold on, there is no doubt you would be rolling in money, but that bang is over.

So where do new comers stand? I liken it to the phase after a big name, highly successful IPO (like Google). Getting in on the ground floor is over, now all that is left is buying and selling just like you would with any entrenched equity. This is hard work, and usually requires a large amount of capital and research. Most likely you only stand to make several percent on your investment, and what good does 3% on $5 do you? Even if you did have the sort of capital necessary, you could probably do better elsewhere. If someone can prove me wrong on this, please share.

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