EuroDNS Blog

Investing in domain names gives higher returns than investing in NASDAQ listed companies. What are you waiting for?

Thies Lindenthal, visiting scholar at the Massachusetts Institute of Technology (MIT) Center for Real Estate, and Product Manager for Domain Pricing at Sedo, has created the IDNX price index, revealing the evolution of domain name sales since 2006. The index shows that the prices for the ten most commonly traded TLDs have increased by 64% since January 2006. It would appear, when comparing the IDNX with the NASDAQ 100 (index of the 100 most actively traded companies listed on the US NASDAQ stock exchange) that domain name prices are influenced by changes in the stock market. Interestingly, the comparison also indicates that investing in domain names gives higher returns than investing in companies listed on the NASDAQ.

Domain flipping is the buying and selling of domain names for profit, as with any investment there are risks, and there are no guarantees that money will be made. It is not a ‘get rich quick scheme’; it requires patience and hard work.  

Domains hit Wall Street

In April 2012, two leading financial companies, Bloomberg and Reuters, added the IDNX to their stock indices, adding credence to domain name investing and making the domain market more visible so profitable investment decisions may be more easily reached. Domain name owners will be pleased to note that the index reports growth over the preceding five months, with a significant increase in March.

Virtual investment

Will this trend lead to people playing the stock market with domain names? Sedo, a domain marketplace, brings buyers and sellers together offering marketing and brokerage services. It’s a trading platform offering a domain parking program, enabling domainers the opportunity to park their unused domain names, loaded with relevant pay-per-click (PPC) ads, thus earning revenue whilst increasing the value and likelihood of a sale. 

Mann, he’s making millions!

Anyone remotely interested in the domain name industry will have heard of Michael Mann, he is the chairman and founder of numerous companies and charitable funds, and he is a multimillionaire earning copius amounts of money buying and selling domain names; in his own words he, “wants to own the world.”

He was bitten by the domain name bug in the late 90s when he was made an offer for menus.com, originally purchased for $70; he was offered $25,000, overnight the offer doubled, the rest, as they say, is history.

In the good old days registering an innovative and exciting domain name was easy as there was less competition, but as time went on the volume of available names reduced. Things started to get dirty with domainers designing software that rang alarm bells immediately a name expired, some small, unscrupulous registrars took payment for revealing inside information regarding names coming up for renewal. Michael, not to be beaten, fought back and designed his own system which allowed registration and transfer of domain names and URLs such as those used to access content via the Internet and world wide web, the system was awarded a patent in 2003. 

Alledgedly, Michael purchases approximately 300 names per day, selling them through his company, DomainMarket.com. He is obviously a busy man and while continuining to add to his shopping list, he had reduced his spending. All that changed in April 2012 when he decided to go shopping. Using his in-built filter for sorting the ‘wheat from the chaff’, and software performing multiple purchases, he obtained 14,962 domain names in under 24 hours. Judging by past form, Michael will surely be selling these for a substantial profit.

Some people may consider Mr Mann’s business ‘cut throat’, making it difficult for others to obtain the domain names they need whilst he fills his coffers; others may admire his business acumen and foresight.

Are you a Mann or a mouse?

It’s risky, but so is any investment. Currently, there is no way of predicting whether a domain name will be a success, and not everyone possesses Mr Mann’s inherent ability to spot a winner. There are companies offering valuation of domain names but they can never be 100% accurate, it all comes down to what a buyer can pay, and how much they want to own that particular name. 

Research is essential to avoid paying over the market value, check out similar names and how they have performed. Before purchasing any domain name use Google Adwords to see what people are searching for, and how many are looking; aim to buy names containing these keywords. Be aware of current and future trends, niche markets, news stories, events; these are all potential markets that may be looking for domain names. 

It’s only worth money if someone wants it

Building and nurturing your domain name portfolio takes time and money, you will need a crystal ball to see which names are going to become popular, hard work is required to promote your domain names effectively, and you will need an abundance of patience; a domain name may be parked for years waiting for the right market. 

Develop the domain name and increase its value by generating traffic; create a website and add keyword specific content and meta tags, or park the domain name with an online marketplace where ads will be placed and traffic generated. The number of new websites increases every day and with them, the demand for good domain names, but if you don’t have ‘spare cash’ investing in domain names is not for you, your investment may not pay out for five to ten years or more; and annual renewal fees eat into any potential profit.

There are no tricks

.COM is the most popular domain but with this comes huge competition, the growing popularity of ccTLDs such as .US, .DE, .TV, makes these viable options which may be sold to businesses wishing to develop in their own country. 

If you are lucky enough to get hold of a three/four letter domain name, congratulations, they are like gold dust; otherwise try to stay with two word domain names ensuring they are memorable, easy to type and are visually pleasing. 

Generic names can bring in huge profits, one only has to look at insure.com selling for $16m, sex.com at $13m, clothes.com at $4,900,000, but steer clear of trademarked names as this can lead to a lengthy court battle and eventual loss of money and domain name.

Previously unregistered domain names may be purchased for very little as they have no history but they will require effort on your part to market them and make them more attractive. The secondary market offers more valuable choices with price tags reflecting their desirability. 

In November 2011, EuroDNS announced the deployment of Afternic’s unique ‘Instant Transfer’ technology for domain sales, offering transactions in record time. This new service allows EuroDNS customers to purchase secondary market domain names directly from the Domain Listing Service (DLS) of Afternic. Existing customers of EuroDNS will also benefit from direct access to more than 50 million prospective buyers that acess Afternic’s DLS every month. Read more about the benefits of this premium domain marketplace at the EuroDNS website.

Holding or flipping

Parking a domain name to increase its value, or executing a quick flip, with a well prepared portfolio it is possible to make money on your investments. 

Will you own the world… hey Mann, who knows?

The US Department of Justice has a Task Force, and its mission is to fight domestic and international intellectual property (IP) crime. Their latest investigation brought to light the online sale of counterfeit goods, netting $896,000 and taking seven domain names into custody.

The warrant for the seizure of the seven domain names was issued by the District of Columbia on April 2012, Ronald C. Machen Jr, US Attorney for the district said, “Seizing the domain names of these unscrupulous operators was one big step, and seizing their ill-gotten proceeds should send them another message that these counterfeit sales will not be tolerated”.The investigation, Operation in our Sites, was originally launched in June 2010 by ICE’s (Immigration and Customs Enforcement) Office of Homeland Security Investigations, and is a federal law enforcement initiative hunting IP pirates and online vendors of fake goods and copyrighted property. 

Cyber Monday I

On November 29, 2010, Operation in our Sites executed seizure orders against 24 domain names of websites selling counterfeit merchandise and copyrighted property, such as shoes, handbags, sunglasses, pirated DVDs and music, and sportswear. The ‘sting’ was instigated on Cyber Monday, the Monday following Black Friday. In the US Black Friday is the day after Thanksgiving and signals the start of Christmas shopping, Cyber Monday follows and is promoted as the biggest online shopping day of the year. The counterfeit goods, including fake Chanel, Nike and Cartier, were imported from China. One domain name seized, tvshack.cc, was a website acting as a ‘link’ between sites allowing users to obtain illegal copies of films and tv shows, tvshack.cc replaced tvshack.net, this domain name was terminated in June 2010.

Several of the online businesses continued trading, overcoming this technical glitch to their business by using new domain names; fraudsters in China selling fake sportswear and college sports jerseys forfeited their domain names when undercover agents purchased goods and confirmed them to be fake. PayPal Private Ltd was used for payment process with the money then wired to Chinese banks. 

Cyber Monday II

To celebrate the ‘biggest online shopping day of the year’ the US Department of Justice struck again, Operation in our Sites cast its net on November 28, 2011, and seized 150 domain names attributed to commercial websites selling spurious merchandise. The feds went undercover and purchased an array of goods with fake trademarks, manufactured abroad and imported to the US, the domain names were terminated.

The fight continues

Operation in our Sites has, to date, terminated 758 domain names of websites dealing in counterfeit goods. The IP Task Force continues to investigate and fight this on-going battle, endeavouring to protect the US against fraudsters who undermine the economic wellbeing of the country. The Task Force is currently working with IPEC (Intellectual Property Enforcement Coordinator) to improve the protection of intellectual property rights. 

Sedo and .ME Registry are joining forces to auction keyword rich .ME domain names, the auction takes place from May 26 until May 31, 2012.

There are 200 domain names available, predominantly keyword and geographic domain names. Examples from the list are computer.me, greencard.me, domainregistration.me, unitedkingdom.me. Unfortunately there are no outstanding ‘call to action’ names present, so the chance of topping the success of meet.me at $450,000, is unlikely.

.ME goes global

ICANN delegated the .ME domain to Montenegro in 2007, and the .ME Registry was elected to operate the extension. Montenegro was assigned the .ME domain as its ccTLD after the country became an independent nation in 2006. The government was quick to recognize the potential of the extension as a generic name and it became widely available in 2008, making the .ME domain available for worldwide registration. Similar to TLDs, the domain names can be geo-targeted by Google, which has a positive impact in terms of searches.

In August 2008, 100,000 .ME domain names were already registered, beating its rivals .ASIA and .MOBI, both launched prior to .ME. By 2010, over 320,000 domain names had been registered.

This is not the first auction held for.ME domain names and Sedo has to date, managed the sale of over 1,000 .ME domain names. Big name companies have jumped on the .ME bandwagon such as Facebook (fb.me), Yahoo! (me.me) and Time Magazine (ti.me), proving the popularity of this extension as a memorable TLD. 

Show .ME the love

Hugely popular in English speaking countries, during the land rush period date.me sold for $70,000, love.me for $32,500 and hug.me for $20,000. This extension has proved a big hit with domain hacks (‘Hack’, implying a trick as opposed to exploitation), i.e. a domain name created by combining domain levels and spelling the full name or title of a name, for instance, del.icio.us and goo.gl. 

Fiesta time in Spain as over one million domain names, with extension .ES, have been registered, with the slogan, “lo hemos conseguido, 1,000,000 de .ES”, roughly translated as, “we have exceeded, 1,000,000 .ES”.

Since 1988, when the .ES domain was created, the number of registrations has steadily grown but, it wasn’t until 20 years later that it reached a million. The sudden influx coincided with a change to registration rules, allowing any citizen to register a .ES domain name, at a much lower cost than previously. The .ES domain has experienced a growth of 17%, representing the largest increase in four years. With approximately 1,460,000 active domains at the end of 2011 this indicates an increase of over 200,000. 

Today, .ES is unrestricted and anyone in the world is able to register a domain name without having to prove local presence. With over 45 million inhabitants in Spain and the world’s second largest tourist industry, adopting a .ES domain name opens up a vast audience to businesses and individuals.

Don’t go loco, be a local hero

Another explanation for this recent growth spurt would be the marketing push encouraging websites, with content in Spanish, to promote their identity and location by adopting the .ES extension. The hope is that this will engender an increased appreciation of Spanish businesses, the businesses thus benefiting from improved web ranking, brand awareness, trust and quality of service.

facts&figures.es

• .ES accounts for approximately 50% of the Spanish market, 57% belong to individuals and the remaining 43% to corporations, limited partnerships, cooperatives, associations, etc.

• 2007 saw the government approve the use of accented characters in .ES domain names.

• The number of .ES domains not renewed in 2010 has decreased in 2011 by 29%.

• Geographic distribution – Madrid hosts 329,900 active domains, Catalonia 199,600, Andalucia 168,600. 

A strong presence in the main domain forums, including: CENTR, LACTLD and ICANN, has brought invaluable support. 

Pronto!

“Action is the foundational key to all success” Pablo Picasso

Already popular in Spain, the .ES domain extension has been used for ‘domain hacks’, a domain name using the extension letters to spell out the full name of the domain. Examples utilizing the .ES domain are geociti.es, beach.es and iTun.es.

EuroDNS offers a wide range of solutions and services to assist our customers with all their domain name requirements. For more information, please visit our website, or speak to one of our sales representatives at sales@eurodns.com.

In a world that has over 500 million Spanish speakers, it makes perfect sense, act now!

Holders of French domain names no longer have to settle for a name that does not meet their requirements, or say what they mean. Looking for ‘forêts’ or ‘forets’, ‘congres’ or ‘congrès’; could bring unexpected results, never again will a search for drills end up in the forest.

Try to say what you mean

Not always easy when your alphabet has been substantially reduced.

AFNIC (Association Française pour le Nommage Internet en Coopération), the administrator for the .FR domain, announced in February 2012, that from May 3, .FR domain names would be able to incorporate accented characters.

In 1985 the first domain name was registered, since then France (and many other countries) has struggled to incorporate their language into the domain name format. Prior to this new ruling, when a French domain name was written down the relevant accents were included, but if one searched online using accented characters – there was no guarantee it would work. 

Introducing internationalized domain names (IDN) to .FR allows domain name holders to present the true pronunciation and meaning of their brand. This new function also applies to .RE Réunion, .TF French Southern and Antarctic Lands, .WF Wallis and Futuna, .PM St Pierre et Miquelon, and .YT Mayotte ; characters available are: à, á, â, ã, ä, å, æ, ç, è, é, ê, ë, ì, í, î, ï, ñ, ò, ó, ô, õ, ö, ù, ú, û, ü, ý, ÿ, œ, ß.

Richelieu says, “très bien!"

This is surely good news for the Académie Française, established by Cardinal Richelieu in 1635, its role is to protect the French language against foreign influences, slang, and the degradation of the language.

Identity protection

AFNIC has decided to offer two registration periods:

• The priority period, from May 3 to July 3, allows users with existing domain names to register the exact equivalent utilizing accented characters and all its possible variants. AFNIC state, “If you have peches.fr you are entitled to register pêchés.fr, péchés.fr, pèches.fr etc. with the same registrar, for the same holder (i.e. with the same "NIC handle").” A NIC handle is the unique alphanumeric character sequence assigned by the registrar to a particular domain name, such as registrant’s name and email address. This period applies to users with domain names registered with .FR, .YT, .PM, .WF, .TF and .RE.

• General release begins on July 3 and there will be a ‘first come, first served’ policy. Any registered company or individual residing within the European Community (including Iceland, Liechtenstein, Norway and Switzerland) may register a .FR domain name.

EuroDNS supports you

We would strongly recommend users contact their domain name registrar to confirm they offer IDN registration and if so, the availability of the various versions of their domain name.

From May 3, 2012, EuroDNS offers IDN registration on the aforementioned domain name extensions, .FR, .YT, .PM, .WF, .TF and .RE. Current holders of the relevant domain names should contact sales@eurodns.com, for assistance with obtaining new IDN versions of their domain names.