Even though there's not a NASDAQ or S&P 500 for domain investors, industry insiders all know how steeply the domain market rose in 2007.
More people have asked me about domains -- or told me that they've started their own portfolio of domains in 2007 -- than in all the years since I registered my first domain in 2000. I wouldn't suggest that domaining has gone mainstream yet, but the industry of domaining does seem to have sparked interest in a far wider demographic over the last twelve months than it had previously. Services such as Domain Capital have arisen due to the explosive growth of domains. Domain Capital is a financial service to help fund the purchase of domain names in much the same way as a mortgage funds the purchase of a new home.
What is Domaining?
The classic definition of domaining is to buy domains for the sake of buying domains. A domainer is someone who purchases domains as an investment without planning to develop them. I know people who register domains, develop them, and end up with a portfolio of sites, but I wouldn't really consider this to be domaining in the true sense of the word. Of course, many domainers also register domains in order to develop them, so there is significant crossover here, but in this article we'll look specifically at domaining without developing. To make domaining work for you, you need to start out with a strategy that details how you're going to make a profit on a domain without developing that domain.
There are two primary strategies for domainers:
- Buy a domain because you think you can sell it for a higher price than you'll pay for it.
- Buy a domain for the traffic it attracts, which, you hope, will produce a steady stream of revenues.
Most domainers that I know use both strategies, but buying domains on a speculative basis, with the intention of reselling them for profit, is certainly the most common approach.
Source: SitePoint
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