The Domains Of The Day – making money from domain names

Making a living from buying and selling domain names is becoming a popular topic for the mainstream media. Recently Business 2.0 had an article about Kevin Ham, and this week Business Week has an article on Andrew Miller and Michael Zapolin who are buying generic domain names and building a business around creating content, and then come visitors and money. They own 17 generic domain names including chocolate.com, software.com and relationship.com.Domain names they’ve bought and sold include beer.com and creditcards.com. Business Week says they bought beer.com “for $80,000 in 1998 and built an audience for the site by giving out free email addresses and having fans rate different brews. Less than a year later, they sold it for $7 million to Interbrew, a beer company. The pair then bought creditcards.com for $100,000 in 2003, created a comparison site for credit-card offers, and sold it to a private equity buyer for $2.8 million in 2004. Now that it’s valued by some at several hundred million dollars, they admit to selling too soon.”The article notes the “crux of the business is the domain name. Chocolate.com automatically gets thousands of visitors a day who type the word “chocolate” into the address line of their Web browser instead of a search site like Google. About one in six Internet searchers never goes to a search site, opting instead for direct navigation. The name also helped the site vault ahead of famous names like Hershey’s and Godiva in Google searches.”The value of the resold domain name market “hit $700 million last year, about double the figure in 2005 and quadruple the 2004 level” the article notes using figures from Sedo.
http://businessweek.com/magazine/content/07_26/b4040059.htm