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Mysterious Domain Names with Ads
April 28th, 2007 by 
Jay Westerdal
I was just asked a question by a friend. The questions was not your simple question, it was out of the ordinary for him. You see he does not know much about the Internet. So it was a shock to hear the words come out of his mouth. He asked about these “mysterious domain names” that only show ads. He knows my job is running DomainTools and Name Intelligence so I am sure that is why he asked. It was like asking a comic book collector about superman issue #1. He could not have come to a better person to explain the basics about domain names. I have been watching this industry for 10+ years and I dumped some knowledge on it.
It is pretty basic, I explained, people type domain names into browser expecting to find something. “uh yeah”, he agreed. Well, people buy domain names so they can make websites. It is about being found. If the domain buyer places ads on the site and the site naturally starts makes money and in that case the buyer has struck Internet Gold. Nothing was done except buying a domain name. No search engine optimization, no in bound link building, no marketing, nothing. The thing just makes money. His eyes shot open. “You mean they make money forever and no work is required?” It was like waking a sleeping giant.
My friend works as a repair person for a cell phone company and doesn’t have any easy life. This revelation that anyone can find Internet Gold was amazing. To this day I am shocked that people do not understand the basics of the Internet. He asked a second question, “How does someone get started?”. Ugg, what a loaded question for me to answer. I hate anwsering this question for a few reasons. It takes a level of determination to find a good domain and a commitment to learning about domains. I decided to give him the quick answer, “register names that people type in”. A quick follow up proceeded, “What names do people type in?”. Well I guess there are two types, 1) Sites people already know about and 2) Sites that people think should exist but do not. If they already know about the Seattle Mariners for example then they type in Seattle Mariners.com. However sometimes they try shortcuts like Mariners.com instead. (Actually that shortcut will not work but that doesn’t stop people from trying.)
The second type of domain is the one you want to try and register. If for example you type Visit Places.com I am not sure what people are looking for, but I would suspect they want to find a place they can visit on a trip. I registered this domain a few years ago because I wanted to build a travel site. Never got around to doing it, so I parked it until I do. I opened up my laptop and loaded the control panel that showed my income on the name, as an example this domain made $1.28 this month just sitting there. It only had 16 visitors the whole month. It costs me about $8 a year to own a domain name, so I make about $15 a year in revenue or $7 in profit. If a person is able to buy enough domains like this they make a good passive income stream.
I want to stress that it is not that easy to just find good domains. You just don’t pull them out of a hat. But if you watch the news and stay informed about new developments you can register what you think will be good names for the future. The traditional professional domain collectors does not speculate on future names very much, they like names that are instant hits. Local domain names are getting more and more popular. People type in things like Seattle Plumbers.com and expect to find Seattle Plumbers. So if you can find names like these that would be the place to start. I do not expect anyone to make a full time occupational change overnight, it takes years of work to figure out what names are good and what names to delete our of a portfolio.
I have domains in my portfolio that do not make any money at all. But I would never delete them. I own Official Value.com and it gets zero type-ins a month, makes zero money, and costs me money every year. The reason I keep it is for the bigger picture. I name can be sold in twenty years from now for huge amounts of money. That $200 that is cost me to own the name for 20 years should net several thousand dollars in the future. If I sold land in downtown Seattle for $500. Would you buy some? “Well of course”, he said staring at me like an idiot. Well that is exactly what I have done, I have bought land in downtown Seattle in 1889. I expect land/domain to increase in value. Two words strung together that possible mean something is tomorrows Gold. A few years ago we had 5 million .COMs now we have 65 million. In a few more years we will be above 100 million names. If you think it looks good, then hold it. Just because a domain name doesn’t generate money now doesn’t mean the domain is worthless.
The trap to avoid is falling in love with bad names. Don’t get crazy and start registering sentences or bizarre sounding names with numbers in them. Keep it generic and keep it in .COM.
It was a lot for him to absorbed, but he really wants to try it. I am sure I just created a monster.
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Posted in Domain Investing, Domain Parking |
April 29th, 2007 at 8:29 am
Excellent article
You may have just saved me some time in explaining to friends part of what I do. Good luck with your Seattle real estate!
April 30th, 2007 at 5:09 am
Would you NOT recommend that he own Seattle.tv or Seattle.info?
If you tell someone to just focus on .com they will get discourage very quickly.
I would tell them to find either a keyword niche or popular domain extension.
April 30th, 2007 at 8:13 am
Rob,
No I would not. I would not tell anyone to focus on anything other then .COM. This TLD has super gravity and people naturally type it in. The grandmother test, Tell her to go to Microsoft’s website. She would type Microsoft.com. Not Microsoft.biz or Microsoft.info. Of course if you can get a generic city name, well then Dot Info that may be a good exception.
April 30th, 2007 at 9:32 am
As new TLDs are introduced that can actually compete with .com, you will find that your .com names slowly lose value. Not overnight, to be sure, but over time. They will continue to appreciate for the next few years, but there will be a peak. The trick is knowing when that peak happens.
Those who think that .com will remain the sole source of high-value names as a rule are set to be disappointed.
April 30th, 2007 at 1:28 pm
Hey, Jay, I blogged a response to this, but I can’t find the trackback URL anywhere. I’m likely just being an idiot today, it is Monday after all…
April 30th, 2007 at 2:47 pm
Cool Chris, I just read your post, I am not sure why the trackback didn’t show up. You may want to look at your software.
I found your post interesting. Your point that there is currently “no genuine competition for .com” is very true. You believe this will change one day. Until there is a Dot Web I think I think I am correct
Their is “Atomic mass” around .COM at this point and it is huge. Everywhere I see advertising I see those two little words end everything, “Dot Com”. Until we reach the point where that stops I would not bet on anything else.
Do people dial 1-800-flowers or do people dial 1-888-flowers? Or what about 1-877-Flowers? Or what about 1-866-Flowers? Did you know the Government has allocated 855, 844, 833, 822, and 811 as well?
The front runner and the one with the critical mass is 800. Same with dot com. People just guess it right into the address bar every day. I suspect that will be true for a long time to come.
April 30th, 2007 at 4:35 pm
It will be true until a decent competing registry is allowed by ICANN *and* they’re prepared to put the time, effort and money into proper marketing.
There was no proper marketing with .biz and .info, and look at how they’re doing.
There’s no trackback, by the way, because I can’t find your trackback ping address. What’s the proper trackback ping address for this entry?
April 30th, 2007 at 5:06 pm
I think that the ccTLDs will increase in value at the expense of .com domains. The ccTLDs tend to give the precision that .com or the gTLDs cannot give, especially in local search. Most of the large ccTLDs are doing very well and tend to overshadow .com / gTLDs in Europe. Though .eu has been quite a disaster for the European Commission and EURid. (At least 260K .eu doms were deleted in the past few weeks.) Few people in Europe consider it to be anything more than a joke extension and it has had a side-effect of increasing registrations in EU ccTLDs.
The .biz and .info gTLDs have had marketing but not enough of it. The .info gTLD is very heavily subsidised and without that, it would fall back to the 1.5 to 2M domains registered region. But these were never going to be serious competition to .com TLD.
May 3rd, 2008 at 4:08 am
Fairly new to this, i found a poker domain i like at sedo and its minimum bid is $100. Its got no hyphens and is two words pokerbrilliance.com. is this good value? or would i be better creating my own which would have to contain hyphens. i havent been able to fnd another suitable 2 word combo that hasnt been taken already. Thoughts would be appreciated…