News Column

Internet Domain Names Pay Off for Lucky Few

Feb 18, 2013

Tom Sowa

The odds of winning the lottery are better than striking it rich by scooping up Internet domain names.

At least that's what people in the business of hoarding dot-coms and dot-orgs say.

Domain names -- the online addresses of businesses and organizations -- once were a hot commodity. During the Internet boom years, people snapped up and registered thousands of domains, hoping to cash in when a business needed a specific Web address.

Most so-called domainers didn't score big payoffs, but some domains with popular generic names like toys.com and jewelry.com made their owners millions of dollars.

Spokane Web developer Don Adair, who also writes an automotive column for The Spokesman-Review, last year found the unexpected benefits of domaining, getting an offer for a site he never expected to sell.

In the 1990s he and a group of associates bought Steamteam.com for a loosely defined business idea that never jelled.

In 2012, after nearly 20 years of hanging onto the site, Adair was contacted by a Texas businessman who wanted to buy steamteam.com.

The call came from the owner of a steam cleaning business, who realized the Web name was ideal for his purpose.

"I probably tripled my investment, considering the fees and renewals I paid," Adair said in an email, although he declined to disclose the amount he received for Steamteam.com.

Not all owners of a coveted domain are willing to sell.

Avista Corp. discovered another company already owned the domain Avista.com after it changed its name from Washington Water Power.

When Avista, the Spokane-based utility, tried to buy the name, the owner, a hotel company in Florida, refused to sell. So Avista went with AvistaCorp.com and AvistaUtilities.com.

In general, websites cost around $10 to $15 per year to register and between $20 and $30 to renew. Companies like GoDaddy and Network Solutions offer those services, and most registration companies also offer discounted prices for volume purchases.

Adair's experience was the exception, however.

Laura Bracken, owner of Spokane Web design and development firm Design Spike Inc., has owned dozens of domains and has sold a few, including infoaxis.com and cliqueit.com.

But the good old days of getting big checks for a Web domain are long gone, Bracken said. By this point in the Information Age, most purchases of domains are for relatively inexpensive sites.

"If you have domains and are hoping to make money, the longer you 'squat' or hold on to them the less value they have," Bracken said.

Spokane search marketing consultant David Johnston said premium sites with short names are generally already claimed.

The shorter the domain name, the better, he said. Dancing.com is more valuable than Wilddancing.com or Dance-with-me.com, as domains with hyphens are a tough sell. Johnston said he uses the website Flippa.com to gauge the value of a specific domain.

Spokane Web developer Alex Gousak said another reason holding a bare domain name isn't as valuable as before is the tendency for developers now to create random names. That's become easier than buying someone else's domain, said Gousak, who said he owns more 300 domains.

Like Johnston, he looks for undeveloped domains and tries to resell them. He bought MotorcycleScan.com and converted it to Bikeads.com, hoping that site will sell because the name is easier to remember.

Spokane-based marketing consultant Ray Edwards owns 118 domains. That's down significantly from a decade ago, when he owned roughly 500, he said.

Many of those are versions of his main website, rayedwards.com, where he sells marketing books, touts his consulting business and offers podcasts.

Some personal name-related domains are defensive, to prevent domain encroachment by another Ray Edwards in Florida who has a similar business, Edwards said.

He also owns domains he expects to develop into something worthwhile and then sell for a profit. He created a site for his homesolarpowerexplained.com domain, for example. So far, though, there has been no interest from potential buyers, he said.

"I've been an accidental domainer," he added. "I don't go out looking to buy names to sell them. Those I have sold, every one was because I had an idea but did nothing until someone tracked me down to buy it."

Johnston, owner of Spokane-based Optimization Tutor, said he makes money by creating a site, boosting its traffic, then selling it the way a flipper sells a house. He sold the site vehiclemicrofinancing.com a few years ago for $8,000.

Johnston is trying to do the same with balancedbyearth.com, increasing its advertising reach, adding an e-commerce system and trying to lure Web traffic to the site.

It's difficult to make a decent profit unless you can prove a site draws many visitors, Johnston said.

Johnston said he has one interested buyer wanting to get balancedbyearth.com, but the two sides haven't agreed on the price.

He didn't say what his asking price is. "But up to now, we've put close to $15,000 into (building) it," he said. "I have to get at least that much back."

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Distributed by MCT Information Services



Source: (c) 2013 The Spokesman-Review (Spokane, Wash.)


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