Articles - The .com Extension - Species under Threat
(originally published in 2002)
Recently, I was hunting for a new domain name for a project I was working on. I followed my own advice that I had published in the article "What's in a name", and spent a few hours listing suitable names.
View my guide on selecting domain names
Armed with my list of 20 choices, I used a WHOIS
application to determine if the names were available. WHOIS is a program that will give you information as to whether a domain name is currently taken, and the owner of that name.
Out of my 20 choices, I found none. Domain registrations are accelerating at an alarming rate.
In 1997 the average number of domain registrations per day was 4,115. Now there are around 30,00 - 45,000 domain registrations per day. On Feb.15, 2000, there were 15,447,479 domains registered.
There are only so many meaningful names and phrases in the English language to go around. I really didn't want to use www.3445dkfieasfjljiwoifdlf.com - but it was available. I also felt that while www.eightfishinapurpleslightlyfluorescentsock.com was a bit easier to remember, it didn't really relate to the service.
The reason for this vanishing of the .com species is that the .com name is now extremely hot property. Unlike "cyber squatting" it is not illegal to buy generic domain names for resale or reservation. The prices asked by some sellers is nothing short of amazing, here are some examples from February of 2001:
3dMegaMall.com - US$15 000
NICFinder.com - US$30 000
ipocentral.net - US$20 000
And that is just for the name......
Many others are going for around $600 000 - $1 000 000.
The introduction of the new TLD's (Top Level Domains, such as .biz .info and .museum) has created a fair amount of controversy amongst the ecommerce community. The general feeling at the moment is that the new TLD's may cause a great deal of confusion initially. The consumer is used to .com and will probably remain .com oriented for some time to come.
While many people have made money from reselling domain names, it is an industry that has gone from boom to bust very quickly. Unfortunately, most resellers have not
realized this as yet and tenaciously hold out for high prices. This attitude has been fuelled by the proliferation of companies offering domain name valuation services. While it's great to get an estimation on the worth of domain names, be aware that it is very much like the diamond game. High buy price, high valuation, poor resell price.
The domain names that we purchased early in 2001 were valued at around the US$1 million dollar mark. We purchased approximately 200 names and could have sold most of them for around an average of US$100 each back then. In 2002, they would still be valued the same - if we had kept them. We couldn't sell any of them at even US$100
at short notice and let the registration lapse on many of the domain names.
Let our mistake save your hard earned money! If you do decide to become a domain trader, my best advice to you is to make it
a strong focus; you're going to need to invest some time to get things going. There are literally millions of names for sale. The market is out there, but you will need to spend a great deal of your time in locating interested buyers. Domain name trading as a
part-time sideline? - I don't like your chances.
If you are planning on registering a .com domain name, make it sooner rather than later - but do shop around. I have seen prices ranging from US$9 per registration per year to US$35 . If you find that someone has taken the domain name of your dreams and is offering it for sale at a ridiculous price, offer them little. They may accept it. Many people that have placed high price tags on domain names are simply testing the market.
And, as always, make sure you read the fine print before signing anything - especially important if you are buying a domain name from a reseller is to ensure that it doesn't encroach on another companies trademark.
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