Domain Name Investing

Many people now-a-days are looking towards domain names as an investment .  I mean why wouldn’t them consider domain investing, with the stock market jumping all over the place, and doubtfulness everywhere? .  Despite an increase in domain values of near 50% per annum over the last five years, the marketplace for these web address’s have gone relatively unnoticed .Without a doubt these are great investments.

In the last 3 years alone the average LLL.com (L=”letter”) such as TFJ.com has gone from $2000 in 2005 all the way to $7000 in 2010 .  Thats an awesome increase in value .  Even the country code top level domains are increasing at extremely fast paces.  .cn, .fr, .es, .de, and .in are leading the way .  Having said this, .com’s will always be the charm of any domain investment portfolio .  When anyone in the world thinks of a website they immediately think of .com .  The growth of other domain extentions like, .net, .us, .biz, .org, and country codes will only increase the value of the .com version .  If a domain suchas MoneyMakerGroup.in starts receiving traffic, it is only natural that a large set of people looking for Moneymakergroup.in will type in http://www.Moneymakergroup.com instead.  Why?  Because .com is automatically associated with the internet.  All the top companies use .com as their extension. 

What does this mean for the future of the .com domain industry ? 

It is my opinion, that .com domains will always warrent a premium over nearly every other extension, even the multiple keyword domaisn like HomeMortgageBank, etc .  There are 6 billion people in the world, and only a limited number of possibile .com domains out there.   Because of the possibilities to use 2 and 3 letter .coms as initials for large companies, they will continue to hoard attention in the marketplace .  4 character .coms will also increase at a faster pace then the rest of the market .  I personally like the “Number followed by a 3 letter word or abreviation” .com domain names.  An example would be 4her.com.  These are easy to remember, yet there are literally hundreds, or even thousands of these left to be registered .  Everyone rapidly went after the LLLL.coms while avoiding the NLLL.com’s. 

My analytic thinking of the Domain Market in General :

Although we can’t continue to have 80% per annum gains in a limited market, forever, I do feel that 50-60% gains for the next 5-7 years is a good bet .  There are only 1 billion people online as of today.  This is out of over 6 billion people worldwide.  Only a small fraction of these peopel own domain names. .  One day, it is not crazy to think, that at least 80% of the world will have some sort of internet connection, while a majority will want their own website.  This represents an amazing growth forecast in the domain arena. .

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