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Are premium domain names good investment and inheritance for your children ?

by jayman
10 replies
I was recently searching for a good domain name for a project
I am working on and in the process found some good domains
from domain sellers and auction sites. Before I know it,
I have purchased more than 20 domains ranging from low $XX to
medium $XXXX, from simple keyword domains to a few brandable and
rare 3 characters domains.

I guess this is partly due the collector's addict in me, I collect
antique coins and stamps since I was a kid and I collect
antique and rare furnitures. Right now, I just can't stop
collecting domain names !

We know that good domain names, just like land and real estate
are getting less and less everyday especially the .com.
I heard in this depressed market, premium domain names are
underpriced and now is a good time to buy.

So do you think it's a good investment and will the value
continue to go up ? Does anyone here collect domain names
and hold them (not flipping) for long term, maybe pass them
on to their children ?

Here's some domain valuation tips I found from a domain appraiser expert

1. Dot. Value

The domain name market gives far greater valuations to Dot.com's than
Dot.net's, Dot.org's and any one of several other major extensions.

2. Recognition

Plain English words, spelled correctly, including slang, make more sense to
people. They are the most valuable. Names like cars4u.com have a
second-class aura about them and are more difficult for people to read and
recognize.

3. Marketability

The number of people on the Web (in the world) who are potential
customers for the website that the name promotes is a significant
component of domain name value. For instance, the domain name cola.com
rates 10 points (assuming it doesn't violate a trademark), because virtually
everyone loves cola.

4. Development Potential

A domain name that's relevant to what's being sold is more valuable,
because it's self-explanatory. For instance, we suspect that if we see a
website with the domain name dietbooks.com, we will expect it to have
something to do with books on various weight-loss schemes.

5. Length

Short and sweet is generally best. Single, recognizable words are
considered better than multiple words

6. Traffic and Revenue

Websites that are receiving traffic have better value than those without
traffic. Websites with good revenue (over $2000) are much more
expensive.

Source : Domain Services

Top 10 most expensive domain names in the world
1. Insure.com, sold to QuinStreet for $16 million in 2009.
2. Sex.com, sold for $12-$14 million in 2006.
3. Fund.com, sold for $9.99 million in 2008.
4. Porn.com, sold for $9.5 million in 2007.
5. Business.com, sold for $7.5 million in 1999.
6. Diamond.com, sold to Ice.com for $7.5 million in 2006.
7. Beer.com, sold for $7 million in 2004.
8. Israel.com, sold for $5.88 million in 2004.
9. Casino.com, sold for $5.5 million in 2003.
10. Toys.com, sold to Toys 'R Us for $5.1 million in 2009.

Source : World's Top Ten Most Expensive Domain Names

Premium auction currently on sedo.com

Domain Search*-*Sedo.com
#children #domain #good #inheritance #investment #names #premium
  • Profile picture of the author Kay King
    Websites that are receiving traffic have better value than those without traffic. Websites with good revenue (over $2000) are much more
    expensive.
    Buy what you want but don't get carried away. Is there anything in the statement above that is "new info" or that is not simple common sense? You are quoting info from a site that sells domains and domain appraisals.

    There are some members here who are experts at buying/selling domains but just because a domain is listed as "premium" doesn't make it worth more than you just paid for it. If you are buying domains "before you know it" - are you making investments or impulse purchases?

    kay
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    • Profile picture of the author jayman
      Thanks for your advice Kay. I know there are many domain experts here. As for me, it's more of a case of me finding a domain I like, especially rare domains and keeping it long term. I am not a domain flipper, don't intent to profit from it now, unless the offer is too good. I do build sites for my other domains.
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      • Profile picture of the author Ryan Johnson
        I think they are great investments. The internet isn't going anywhere and names are just like real estate. That being said, I have some Facebook real estate that I'm not going to develop for sale with the high bid of $1 right now. Reserve has been met, and they will be transfered Monday night.
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        • Profile picture of the author jayman
          Facebook recently bought Fb.com to launch mail service.
          One can only imagine how much they paid

          Yep, Facebook Takes Control Of Fb.com Ahead Of Mail Launch


          Originally Posted by Ryan Johnson View Post

          I think they are great investments. The internet isn't going anywhere and names are just like real estate. That being said, I have some Facebook real estate that I'm not going to develop for sale with the high bid of $1 right now. Reserve has been met, and they will be transfered Monday night.
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  • Profile picture of the author Always-A-Warrior
    Yes domaining can be very addictive as you don't want to make the mistake of passing up a domain name that someone else has bought and sold for big money. I get carried away sometimes even without keyword research.

    Domain names are worth it for future investment and thinking ahead of the crowd can be worthwhile too. Look at 3D domain names are already taking off as new product lines are introduced online. EV or electric vehicle is another hot investment. To find the nest buzz you need to read or watch the news and think ahead ... sometimes you can find gem or two for only $8.
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  • Profile picture of the author subashchandrapoudel
    Yeah, Premium domains are are a good place for investments.
    Domains name can give good return if bought by doing good research.
    But never take it as an inheritance to your children world is changing rapidly and no one knows what happens tomorrow.
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  • Profile picture of the author Sparhawke
    Define "premium"

    Is it premium because someone else says it is premium or because it happens to be in the dictionary or because it is a major keyword like computers?

    To me the most important thing is whether it is actually something people buy or want to know about, there are many words out there that are in high usage but which do not bring in the pennies, the trick is to weed out the wheat from the chaff and to try to figure out what is better, "paranormal" is longer than "ghosts" however it is far more wide ranging for instance and while "law" would be a super-elite keyword it is quite scatter shot until you really start working on it.

    I personally prefer small keywords and product domains that others ignore, everyone is looking at .com for example and I don't intend to compete with them :p

    @Ryan, Facebook is going to screw you so bad. Why are you taking a trademark of one of the leviathans of the internet and hoping to profit? Stick to little generic domains that any company could use to market their wares like my most recent acquisition, "anti wrinkle cream . info"

    (Yes, it is an info but it is such a nice little domain with 10,000 exact searches that I couldn't pass it up lol)

    Anyways, domains are an excellent investment I think, so long as you utilise them and do not simply park and let everyone overtake you. Look at sex.com as a perfect example of this, while that guy who stole it was collecting pennies everyone else was overtaking him and developing their sites...it could've been a leviathan but instead it is merely a footnote in internet history lore.
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  • Profile picture of the author Matt.Lake
    Correct me if I'm wrong but any domains with "facebook" in them aren't all that great. It's blatantly a trademarked term and it was only reported recently about Facebook suing a load of website owners with "facebook" in their domain name.

    If you don't develop the site for profit then may be you're OK, but then what's the point?

    May be they do have value but I for one wouldn't touch them with a barge poll.
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  • Profile picture of the author j0s3
    Originally Posted by jayman View Post

    So do you think it's a good investment and will the value
    continue to go up ? Does anyone here collect domain names
    and hold them (not flipping) for long term, maybe pass them
    on to their children ?
    Jayman, there are more stable things to invest in if you're thinking about passing something along to your children.

    The net is just a decade old and we've already seen a dot boom. Not only are domain names intangible in terms of economy but it's purely speculative to try and guess the shelf-life of them, because we don't have much hindsight when it comes to watching the web evolve and seeing 'what happens'.

    A few years ago, dot com millionaires lived the highlife because financial institutions perceived successful dot com ventures to be worth... a zillion dollars.

    And boy did that come crashing down...

    Nobody can tell you how people will be using the web by the time your children are ready to cash in whatever you've passed on, so nobody can really say what the value of a domain name will be.

    And domain names don't generally go up in value anyway (they're not like brick and mortar properties, because space isn't an issue).

    The founders of eBay dismissed the idea of selling cars on eBay. They thought nobody would by cars online. That was just a few years ago. If they didn't have the foresight to at least guess correctly how people would behave on the web (what would matter to them, what would hold value etc) then nobody can really answer how people will use the web, or what value it will hold for people in 50 years time.

    Hope that stops you from spending that zillion on domain names


    PS But buy a handful... just in case
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    • Profile picture of the author Sparhawke
      Originally Posted by j0s3 View Post

      Jayman, there are more stable things to invest in if you're thinking about passing something along to your children.

      The net is just a decade old and we've already seen a dot boom. Not only are domain names intangible in terms of economy but it's purely speculative to try and guess the shelf-life of them, because we don't have much hindsight when it comes to watching the web evolve and seeing 'what happens'.

      A few years ago, dot com millionaires lived the highlife because financial institutions perceived successful dot com ventures to be worth... a zillion dollars.

      And boy did that come crashing down...

      Nobody can tell you how people will be using the web by the time your children are ready to cash in whatever you've passed on, so nobody can really say what the value of a domain name will be.

      And domain names don't generally go up in value anyway (they're not like brick and mortar properties, because space isn't an issue).

      The founders of eBay dismissed the idea of selling cars on eBay. They thought nobody would by cars online. That was just a few years ago. If they didn't have the foresight to at least guess correctly how people would behave on the web (what would matter to them, what would hold value etc) then nobody can really answer how people will use the web, or what value it will hold for people in 50 years time.

      Hope that stops you from spending that zillion on domain names


      PS But buy a handful... just in case
      Mass hysteria and investing always goes on but when you add idiots to the mix that do not understand what they are doing you get a recipe for disaster.

      What those people were doing was building out little random sites with completely random domain names that only had $20 in sales and yet had values in the millions because of wild speculation. Amazon and Ebay on the other hand pretty much started it off (After pizza hut) and already had impressive sales and while they were still not making a clear profit they at least making money before the IPOs got their hands on everything.

      Amazon and Ebay particularly had sales in the many thousands of dollars a month so all the boom did was give them massive free publicity while they concentrated on getting big fast.

      No one can deny that generic domains have value because as long as someone wants to buy soap on the internet the chances are they are going to go to the domain directly or at least come to the conclusion that it is where it would logically be.

      When you have thousands of blind speculators bidding on companies that are hosting $10,000,000 launch parties and have nothing concrete to show for it you are courting trouble.

      The internet is young yet, that cannot be denied but it has matured in a way past those early days because of the gambling by companies, they laid the foundation for so many things we take for granted.

      Buying random domains can be a bit hit and miss, chances are you will drop the registration long before you collect but if you buy the right ones that are correctly spelt and keep them long enough you will make a return.


      Some reading for you
      The charmed dot-com life of Jeff Bezos - Apr. 15, 2008
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