Domainers

There is a unique clique of people who treat the domain name business the way a day-trader would treat the stock and options market. They do nothing all day but buy and sell domain names! I was intrigued that such a lifestyle was possible. Here’s the scoop: Good domain names are sold every day for somewhere in the $1T to $10T range. The brokerage will normally charge 4% for the transaction. If the name is good, you can hold onto it for several years and make money *purely* on the traffic that goes to the domain. This is normally enough to cover the cost of renewing the domain. Generally this revenue will come from targetted advertising from Google or Yahoo. (Not Google Adwords, which only pay about 3% of the cost-per-click). A good deal with Yahoo or Google will get you 20% of the cost-per-click revenue. Intriguing.

The key to domain name investing - is to understand the sort of people who buy domains for six to seven figures. Generally these are young people - flush with venture capital cash. These people have a great idea for a product, and want nothing more than a domain that matches this new product. Creating a brand is terribly expensive; you need $20M in the US alone to create brand recall - so a $1M investment on a good domain name will be money well spent for these people. So if you want to make money on domains - think high-tech. Think voip.com or wifiphones.com or wimax.com or wimaxcentral.com. Or think callcenters.ph or outsourcing.ph. You get the idea - think of forthcoming business trends, and imagine the businesses that will rise to exploit these trends - and the domain names these businesses will want to have!

Full disclosure - I run the PH Domain.