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Internet Domain Name Aftermarket Growing to Gigantic Proportions

December 15, 2006; 01:21 AM

The real estate boom isn't over; it has simply shifted online with market speculators now buying, selling and renting online properties. While the housing market is currently undergoing a correction, real estate on the Web is booming. Some domain speculators are making huge profits by finding domains at bargain prices, making improvements and reselling them.

A recent article in, citing a study of domains sold on the aftermarket within the last year, showed an average return on investment of more than three hundred percent. Even more amazing than the ROI is the time it took to realize it. The same study showed that the average time between purchase and resale was only two hundred thirty days!* Now anyone can play the market, either by buying up established domain names or thinking up their own creative concoctions.

Of particular interest is the domain name aftermarket which is quickly growing to gigantic proportions. This is the sale of “established” domain names to people or companies who see a value in that name. Another article in The Age recently cited Icann, the non-profit organization that manages the internet's top-level domain name system, saying they estimate that the domain name market, which has an estimated annual worth of five hundred million dollars, is quickly being overshadowed by the domaining after-market, now believed to value between one and two billion dollars.+

There are two strategies to investing in domain names:

1) Parking- “parked” names are domains that are registered with the registry but are not made active for website or ecommerce service. This is a simple “Buy and Hold” strategy. The name is just reserved and made available for resale.

2) Monetizing- this is adding “virtual equity” to your online real estate by building a functioning Web site around it to generate traffic. These “monetized” sites are (usually) built to derive an income to help offset hosting fees. There are two main ways to monetize a domain name:

a) Affiliate Programs- When looking for appropriate affiliate programs to join, you should consider the major affiliate networks such as Commission Junction (, LinkShare (, ShareASale ( and FineClicks (

b) Pay Per Click search engines and bulk traffic aggregators- Some examples of PPC search engines are and Examples of bulk traffic aggregators include and

There are more domain name extensions than ever with .com being the “Park Avenue” of them all. There is still opportunity for the more obvious names within the other extensions with most of the obvious names under .com being long taken.

Mark Goldstein, of the International Research Center in Tempe, Arizona says: “The use of longer domain names has added opportunity to the .com extension provided that the name reflects some product, service or cultural phenomenon that people are interested in. It further helps to monetize the domain name by building a site around it and linking it to an affiliate or pay-per-click program. Then you have a train moving with a potential income stream and verifiable traffic”.

The use of longer .com names is helped by the fact that there are now few restrictions on what now qualifies as a saleable domain name and many are now mimicking the search patterns that people plug into search engines such as: or

Matthew O’Brien, CEO of Searchmarketing, says that this growth in the Domain Name Aftermarket is just in the beginning stages with the names eventually being traded and held in portfolios like stocks: “All current statistics and indicators point to continued growth, making domain names a highly attractive addition to any investment portfolio while demonstrating they are assets that require effective management.”

Dale Merritt, CEO of Dotventures, maintains that just “parking” a domain name isn’t enough anymore. According to Mr. Merritt: “Valuation of online real estate exactly parallels the physical kind; it’s all about increasing the value to your property by making improvements to it. The more one improves a domain space and increases traffic to it; the more attractive it will appear to potential buyers on the aftermarket. Fortunately, the costs of making improvements to a domain space are not anything like what it entails to “improve” physical real estate”.

Internet REIT, Inc has amassed one of the premier portfolios of internet domain names in the world with over three hundred thousand properties and over one hundred million visits per month. Bob Martin, CEO of iREIT said: "We have completed over sixty domain portfolio acquisitions in 2006 and have focused on quality domains that have defensive, sustainable internet traffic that converts well for advertisers. Specifically, we believe that the value of domains names is correlated to the quality of the sustainable traffic it generates."

As more and more domain names are registered, the .com space becomes more and more valuable. Again, exactly paralleling physical real estate, it’s just like when Will Rogers advised investors to buy land and keep it because “they aren't making any more”. True, given that there are millions of .com domains registered, all the low-hanging fruit are overwhelming taken. Every possible two or three letter domain name combination is already taken. However, with the advent of longer names available, now up to sixty-four characters, names can be created utilizing “searched” terms. Then by using strategies and techniques to “monetize” that domain it can possibly be instilled with a great deal of value on the burgeoning aftermarket. The sky is, literally, the limit here.

Searchmarketing, is a privately held company headquartered in Scottsdale, Arizona. They are a marketing technology leader that helps domain investors “get found” through an innovative online and offline marketing process. For more information about Searchmarketing, please call: 866-666-6838 or visit

DotVentures, LLC is a privately held company headquartered in Scottsdale, Arizona. They help individuals successfully invest in domain names. Interested parties can call them at: 888-291-2976. Learn more about DotVentures here:

* Choosing a Domain with High Resale Value
+ The Age- Louisa Hearn, June 26, 2006

Kiloh Smith, (602) 393-2001 ext 2132

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