Do You Own a Domain Name That’s Worth a Fortune?

by Paul Michael on 30 August 2010 6 comments

Chances are, many of you reading this already own a few domain names. At around $8 a year these days, they're cheap enough. I own several, usually because I have a "bright" idea that I think would make an awesome product or website and snag the domain name before someone else does. Then it sits there gathering internet dust.

Many people do the same as I do, and then forget about those websites. The option to auto-renew makes it very easy to sit on a website name for years and not even remember that you own it. And some of those domains can be worth hundreds of thousands of dollars. Even millions.

A highly publicized example of this was the sale of the domain name sex.com a few years ago. That particular domain name sold for $14 million dollars! That was clearly going to be a very popular web address considering the amount of money the online pornography industry is worth. I am by no means suggesting you go out and buy smutty web addresses, by the way. No, there is money to be made from any web address if the right person is in the market for it.

A friend of a co-worker of mine recently sold a domain name he bought back in 1994. He received over $100,000 for it. Not bad for an $8/year investment. Do a little searching on the internet and you can find many examples of this. But how do you know if you have one of these domain name goldmines?

Well, first, use a little common sense. If you look into your archive and see a domain name that is a short, popular word, it's going to be valuable. Three-, four-, five-, and six-letter word domains are generally very difficult to come by these days. If you have one, consider putting it up for sale. An auction site like sedo.com is a great way to sell off your domains, minus a small percentage for the service.

Next, remember that .com addresses are still the most sought after. The .info, .tv, .net and .org addresses can still be worth a ton of money though, so don't rule them out. But generally speaking, .com is where the money is.

If the domain name you own isn't obviously popular, it still doesn't mean it's not valuable. You could have a made-up word like "plunty" or "gigazig," and although it's meaningless, it could be the next Napster or Starbucks. If you put it up for sale, you may be surprised to find that a startup business wants it.

There is also a growing business in domain name speculation. This is NOT cybersquatting, which is buying a domain name with the bad faith intent to profit from the goodwill of a trademark belonging to someone else. For instance, buying nikeshoes.com and waiting for a big fat check from Nike.

This is speculation, pure and simple. You buy a domain name that's free and hope that someday you can sell it for a profit. For instance, I could see if "gigazig.com" is free, and if it is, I could snap it up. It will probably be worth nothing for many years, but hey, you never know. For a while I owned "goalfrenzy.com," which was going to be a website dedicated to the best goals from soccer matches around the world. Of course, I never got around to creating the site and the domain name expired. Who knows, though. If I held on to it and a magazine or TV show appeared called Goal Frenzy, then that domain would now be worth cash.

So, if you have a few domains sitting around doing nothing, go and check them out. Maybe you're sitting on something that could be worth thousands and thousands of dollars. Good luck to you.

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Guest's picture
Guest

I have a friend who does this for a living. She just buys and sells domains and earns about $30,000/year. It's not much if it's your only job but definitely cool for some extra cash on the side if you get lucky or put in the time to research.

Guest's picture
Guest

Great article! First time I have seen a non-domain website accurately distinguish between cyber squatting and legitimate domain investing and speculation.

If you are sitting on a domain and not using it, you may wish to "Park" it with a company that displays ads and pays you everytime someone clicks (namedrive, domainsponsor, etc.). It probably won't generate alot of revenue unless you have an amazing domain, but its free money,

Guest's picture

If you really had bought a domain name sometime late 90’s, that could be worth a thousand bucks. There were lots of generic word domain names sold back then at a time the internet is just booming. Companies back then were buying domain names they thought they must have and its worth thousands of dollars. But today, competition for domain names has gotten to a maximum where you can’t get it if you are not fast enough to think about it.

Guest's picture

I agree with the other commenter, this article does a great job of distinguishing the above mentioned practice from cybersquatting. However, it should also be stated that if the domain name is confusingly similar to a trademark it might be cybersquatting. For example, if you use Niky.com, it might be too similar and might be trademark infringement. The case DaimlerChrysler v. The Net, Inc. very explicitly defines cybersquatting. The case can be found for free at http://scholar.google.com/scholar_case?case=4716961749813728681 (see the third paragraph under the "Analysis" heading for the definition of cybersquatting.

In addition to cypersquatting, there is one more academic principle that should be discussed, which is somewhat tangential to cybersquatting. Using another party's tradename in your website's Meta Tags might be trademark infringement. This practice is frowned upon because it either unjustly attracts traffic to your website or it deters traffic from the trademark owner's website. Either way this is found to be trademark infringement. For a more thorough discussion on this, see the article at http://fromthegroundfloor.wordpress.com/2010/07/19/be-careful-with-your-..., but remember to come back to this website because it is very thorough and well written.

-The above information is intended to be academic in nature. It is not legal advice. For legal advice contact a local licensed attorney.

Guest's picture
Guest

Thanks for reminding me...a couple years ago I came up with a domain name and discovered someone was already using that domain name for an unrelated purpose.

(mine was a phrase of two short words with an obvious social meaning and the person using the domain name was using it in a contrived sense for commercial purposes.).

Turns out the domain name is now available.

And I have a five-letter idea (available) for a domain name which concisely describes a popular product AND a specific place.

Guest's picture
Guest

i think domain name speculation sucks harder than cyber squatting. If you want to find a domain as a non-profit or ngo you'll find out that most names describing your ideals are for sale for big money. I don't care about cyber squatting though. Let those people make money of typos.