Hot Tips For Capitalizing on the Domain Name Buying Frenzy

We know it’s happening. We hear the stories every day. Another dot com just sold its name for a small fortune. Another domain name entrepreneur just struck it rich. These stories and the promises offered by the shiny new global economy created by the Internet have led to a veritable domain name buying frenzy.

With over 28 million registered gTLD domain names, the stories about windfall successes are, well, statistically insignificant. But that doesn’t mean that they are not demonstrative of the potential for success in the domain name business. What it does mean is that you should temper your daydreams with some good business sense. And if you’re in the domain name business to make money, then you should plan to be in it for the long haul.

Nine tips for making the most of your domain names

In the spirit of the over-abundant financial advice bombarding us at every turn during these almost-tax-time days, DomainNotes has put together its own list of nine hot tips for maximizing your domain name investment potential and capitalizing on the buying frenzy.

“Why nine tips?” you ask? Well, we thought we’d save tip #1 for you. At the end of this article, click on “Share Your Tip” to tell us your #1 tip for capitalizing on the domain name rush.

Tip#10: Don’t gamble with what you can’t afford to lose

The great thing about investing in the domain name business is that your investment can be as small or as large as you choose. Of course, the best scenario is to be struck by a brainwave for a new series of domain names that haven’t yet been registered and to acquire one or several for less than it costs for a decent restaurant meal.

You may, however, need to dig a little deeper into your pockets if you want to acquire a name or series of names that someone else has already registered. It may be that you pick them up for a song, or it could cost you a small fortune. Either way, realize that there are no guarantees in the world of domain names, so don’t gamble with money you can’t afford to lose.

Tip #9: Find a risk-level that you’re comfortable with

Whether your domain name investments are an interesting hobby or a full-time business venture, think about what level of risk you’re prepared to accept. Don’t plan to sink the equivalent of a year’s salary into a series of domain names unless you can afford to lose it (see tip #10), or at least to wait a while to see a return on your investment.

Tip #8: Don’t panic when the market nosedives – it’s bound to happen

We all know that there are going to be some dips and curves in the domain name business. There are too many factors beyond our control even to guess what’s around the next corner. That’s what makes the domain name game exciting, nerve-wracking, and more than a little bit risky.

Not unlike the recent market “corrections” (a polite way of saying that the bottom just dropped out of the market) for Internet stocks in general, the heady days of domain name mania are sure to suffer a few rough patches in coming years. Know it’s coming might make it a bit easier to plan for your future. Then, when it seems like things are at an all-time low, you can buckle up and hang on. It’s going to be an interesting ride.

Tip #7: Study the .com history and learn from it

What trends and business practices can help you succeed in the domain name business? There’s a lot to be learned from the Internet’s infantile history, particularly when it comes to .com. Justifiably considered the eldest and most mature of the gTLD siblings, it merits careful study and consideration. Not everything about .com trends and practices will bear out for the other (so far) less popular extensions, but some of them certainly will.

For example, the popularity of catchy names is unlikely to wane quickly. The online world is already accepting alternatives to .com as viable options. When this acceptance becomes commonplace, an interesting domain name will be valuable regardless of the last three letters in its name.

Tip #6: Stay on top of emerging technologies and trends

Make it your business to stay on top of new technology and trends. Some of the most interesting Internet developments in upcoming months will surely involve the Internet as a medium for pure entertainment.

Likewise, as the kids who were reared on computers come of age, their nonchalant expectations for high-tech everything will certainly lead to ever-increasing opportunities and demands for the Internet. Domain names will always be an integral part of Internet success stories. So, by keeping tabs on new technologies, entertainment, and business opportunities, you may just capture an interesting piece of the domain name action.

Tip #5: Think about who has the deepest pockets

If you’re a speculator, think about what businesses or which individuals will be most willing to pay top dollar for the domain names of their choice. Telecommunications, financial services, and some well-heeled professional services all rank high on the list of choice businesses. Carefully categorizing the marketplace based on the most and least likely to pay top dollar for their domain names will help you make wise choices in deciding where best to put your hard-earned money.

Tip #4: Diversify your portfolio (.tv, .com, .ca)

“Don’t put all your eggs in one basket.” “A bird in the hand is worth two in the bush.”

These adages hold as true for domain name entrepreneurs as they did for our farming forefathers. It’s true that .com is king. But even kings are sometimes usurped, and more often than not, they don’t see it coming. When you consider that .tv domain name registrations have already exceeded a quarter of a million in just under eight months, it would certainly seem that we’re prepared to start thinking about crowning a prince.

Major players jumping on the .tv bandwagon include Sega of America, Columbia TriStar International Television, Major League Baseball, and more than 150 leading broadcasters worldwide.

The point is that there will be other equally attractive extensions down the road. Perhaps they’re already in our midst, and we don’t know it. Maybe they’re around the next corner. But you can be certain that there are more to come.

Tip #3: Consider this a long-term investment

As with most businesses, fortunes are not usually made overnight. You may not sell your domain names for months or years. You may never sell them for any significant sum of money. You should certainly plan to hold on to them until the right buyer arrives. Take it from Disney – even as it announced that Go.com would be on the auction block, they assured us that they’re willing to wait more than a couple of minutes to find the highest bidder.

Tip #2: Be a visionary

Open your mind and think beyond your borders. New businesses are emerging on a daily basis. New technologies that are beyond your wildest imaginations are being patented at lightning speed, and old businesses are finding new and exciting niches. New geographies, countries and cultures are opening up to the Internet.

One simple and current example is the preparation of the Internet for multilingual names, which is sure to yield new opportunities for domain name entrepreneurs. Don’t dismiss anything as impossible, and keep your ear to the proverbial ground to find out what’s coming down the tracks.

Tip #1: Share your expertise!

What’s the #1 Tip for Capitalizing on the Domain Name Buying Frenzy?

Posted by on April 6, 2001