Investing in Virtual Property

As in Domain Names. What would your take on this be?

I see it as very similar to bricks and mortar property investment.

You claim a plot of land (register)
Or buy a plot that's already been claimed (buy on aftermarket)
You can build on your plot (develop a website)
You can rent your land or your developed property (to advertisers via an aggregator like Google)
There are good neighbourhoods and bad neighbourhoods (dress circle like single keyword generics to slums like net.au's with dashes)
You can speculate on land that you think will appreciate
You can sell your property to others for profit
Properties can be income +ve or -ve
Supply is limited but demand is growing

The actual trading of domain names has only been allowed in Australia for less than a year so it's all very new but things seem to be taking off.

Best thing is low cost of entry - $25 to claim a block of land for two years. Also ROI can be fantastic if the right buyer comes along (eg turn $50 into $10,000 happens frequently)
 
Noone buys 'pre-loved' domains unless they are making money or they are rich and the domain name is fantastic.

I have a very, very snappy domain I can never think of what to put on it, I had it for sale for a year or 3 and no bites.

Every time I need a new domain all the good ones are taken, you find some of them for sale for $5000 or so, but its cheaper to just fiddle around until you find a permutation that is available.
 
Presumably this post is here just to advertise your website?

No. It it were I would have at least mentioned my website and/or company name don't you think?

I'd love the domain trading industry to grow though & I make no secret of that. But I have always drawn very strong parallels between the physical & 'virtual' markets so I'm interested to hear what experienced property investors think (and yes, it might capture the imagination of some of them)

Noone buys 'pre-loved' domains unless they are making money or they are rich and the domain name is fantastic.

I have a very, very snappy domain I can never think of what to put on it, I had it for sale for a year or 3 and no bites.

Every time I need a new domain all the good ones are taken, you find some of them for sale for $5000 or so, but its cheaper to just fiddle around until you find a permutation that is available.


That's because no one knows you can actual buy & sell .au domains as it's so new (in Australia) but there have been a few thousand sales in the last year.

In the past about half a dozen .au domains have sold for 6-figures but the vast majority of sales are in that $500-$1,000 range. Not much but when most have been hand regostered for $25, it's not a bad ROI.

RumpledElf, you're quite right - a bit of creative thinking and you can usually hand register an adequate domain. However if you're planning to promote your website in any way (as all businesses should do), it could well pay to spend $500 to get a domain that might be many times more memorable/brandable. It could drastically increase your return on advertising spend.

I guess that's the real value of a domain IMO.
 
I personally think that the domain these days isn't as important as the information or application on the site itself as it used to be.

Look at Facebook, MySpace, LinkedIn, Twitter.. none of them have keyword type domains, nor any relation to whatever it is they do.

I think the real money these days is in a well developed website that ranks highly and has great information and resources, the website itself is where the money is these days, not necessarily the domain.

So if you are talking about buying and selling established websites then yes, I agree it is similar to property.

With an established website, you can do the following;
- Generate Cash Flow
- Add Value

With just the domain, its like having a block of land without a house on it, and we all know that no income is made easily that way.
 
Heh. I came up with what is apparently some kind of master stroke of unique and wonderful business idea-ness last night (how many times have people said that?) and as per usual, it needs a domain name.

Don't have the time to dedicate to this one right now, but will when I'm finished with this #@$)(&#$%ing tiling.

Don't you love simple business ideas? This is just something I've been ranting and complaining about to my partner about not existing on the internet so I constantly fight with other not-good-enough providers of not-close-enough similar services. So why did it take until last night to think I could roll my own?

The perfect descriptive domain for this one is, of course, taken by some idiot squatter. Its not for sale. For THIS one I'd probably pay $500 or so.
 
Aaaaaaaaand as usual, 5 minutes and $12.53 later I just registered a damn-close-to-good-enough domain. The first dozen or so I thought of were ALL taken by squatters with zero content, which probably explains why noone offers this service on the internet ...
 
Are you going to give us a hint of what your super fantastic idea is? :D

The squatters are everywhere now, hence the reason I beleive value is not placed on a domain as much these days, unless the domain already has traffic, backlinks, branding etc..
 
Yes you most definitely can make money out of domains.

I have sold several at a very tidy profit, 10k for one particular domain name that I wasn't even advertising, I just got a cold call one afternoon after they had looked up the WHOIS. Not a great deal of money compared to property, but given the small price to purchase the domain and register a business name to comply with the previously applied .au restrictions, it was a very tidy profit.

I could have held onto it for longer and I'll probably kick myself in later years if I see it sell for a big increase, but that's the case with many assets. How many of us wish we'd hung onto some property or another.

Getting in early back in the early/mid 90's helped, when the names were going begging. Damn wish I'd bought beer.com haha. However in the ensuing years most good names have been taken so you need to be creative and predict what may be useful to someone and is not already taken. I can't think of any today and when I do they are surely taken so I don't bother anymore but if you had inside info on a product being developed or a subdivision name (to put a property theme to the reply), you could snap up the .com but may have a court case if you want to hang onto a .com.au brand name eg. the QANTAS case.

Oh and CGT takes some of the shine away given that the expenses you can claim are insignificant but hey a profit is a profit and for no more than a few dollars and dropping it into the drawer marked "Specs".

Cheers,
Beef.

<Returns to the peanut gallery>
 
I personally think that the domain these days isn't as important as the information or application on the site itself as it used to be.

Look at Facebook, MySpace, LinkedIn, Twitter.. none of them have keyword type domains, nor any relation to whatever it is they do.

I think the real money these days is in a well developed website that ranks highly and has great information and resources, the website itself is where the money is these days, not necessarily the domain.

So if you are talking about buying and selling established websites then yes, I agree it is similar to property.

With an established website, you can do the following;
- Generate Cash Flow
- Add Value

With just the domain, its like having a block of land without a house on it, and we all know that no income is made easily that way.

However we all know the importance of position. I view a quality domain as a well located block of land.

If you build a fantastic shop on a cheap block of land on the outskirts, you might end up overcapitalising and your customers may not find you.

If you build a great website on a 2nd-rate domain, again you risk overcapitalising and people may struggle to find you.

Eg. John Smith is a plumber in sydney. He decides to set up a website. He chooses jsppl.com.au because it's not been registered and stands for "John Smith Plumbing Pty Ltd".

He plasters it all over his van, on his business cards, flyer drops etc. How much cut-through would that domain name have? Bugger all. No one would remember it.

Instead, what he should do is buy SydneyPlumbing.com.au on the aftermarket for a few hundred dollars. Put that on his van (or anywhere) and it's instantly memorable and people immediately know exactly what he does and how to find him. Plus, having a 'keyword-rich' domain will mean he shows up much higher in the search results when people search for things like 'sydney plumbing' in Google.


Yes you most definitely can make money out of domains.

I have sold several at a very tidy profit, 10k for one particular domain name that I wasn't even advertising, I just got a cold call one afternoon after they had looked up the WHOIS. Not a great deal of money compared to property, but given the small price to purchase the domain and register a business name to comply with the previously applied .au restrictions, it was a very tidy profit.

I could have held onto it for longer and I'll probably kick myself in later years if I see it sell for a big increase, but that's the case with many assets. How many of us wish we'd hung onto some property or another.

Care to share the domain? Don't regret selling it - if you never never sell, you never never realise your profit. And a couple of hundred into $10K is a pretty good ROI.

Getting in early back in the early/mid 90's helped, when the names were going begging. Damn wish I'd bought beer.com haha. However in the ensuing years most good names have been taken so you need to be creative and predict what may be useful to someone and is not already taken. I can't think of any today and when I do they are surely taken so I don't bother anymore but if you had inside info on a product being developed or a subdivision name (to put a property theme to the reply), you could snap up the .com but may have a court case if you want to hang onto a .com.au brand name eg. the QANTAS case.

Oh and CGT takes some of the shine away given that the expenses you can claim are insignificant but hey a profit is a profit and for no more than a few dollars and dropping it into the drawer marked "Specs".

Cheers,
Beef.

<Returns to the peanut gallery>

It's never too late. I remember in 2002, I was cursing myself for not getting in earlier when I heard about how people had made heaps of money with domains. However I didn't do anything about it for another 4 years! Even starting in 2005/2006, I've still done OK out of it.

  • When there were 10,000 domains registered, potential speculators thought it's too late all the good ones like cars.com.au and flowers.com.au are gone
  • When there were 100,000 registered, people thought it's definitely too late now - even newcars.com.ay and freshflowers.com.au are gone
  • Now there are more than 1,000,000 domains regsitered, people say it's definitely absolutely too late now. Even buynewcars.com.ay and freshflowersonline
.com.au are gone.

The point is, as long as the internet keeps growing, so will the value of a generic domain.

I'm sure at one stage people said land more than 10kms from the city would never be worth anything....

Lastly, related to this forum, I sold negativeequity.com.au last week for $600. Was registered for $28 about 2 years ago.
 
No. It it were I would have at least mentioned my website and/or company name don't you think?
Actually your website is quite easy to find, given your username.

However your subsequent discussion has shown that you're genuinely discussing a subject. We always get suspicious when a new person posts something connected to a business as their first post.
 
I may be wrong on this, but I was under the impression that a Yourdomain.com.au domain is only registered to you, not actually "Owned" by you. Basically like a lease.

If someone runs a company with a trading name eg - Global Object Technology Pty Ltd and registers the domain GOT.com.au and someone else is already running a company called GOT Pty Ltd they can claim the domain to be more accuratly representing there business and then the original company can be forced to forfeit the domain name to the more accuratly named company.

Im not sure the exact wording, but i do remember something along those lines

This is part of the .au domain registry rules in australia i beleive.
 
I may be wrong on this, but I was under the impression that a Yourdomain.com.au domain is only registered to you, not actually "Owned" by you. Basically like a lease.

If someone runs a company with a trading name eg - Global Object Technology Pty Ltd and registers the domain GOT.com.au and someone else is already running a company called GOT Pty Ltd they can claim the domain to be more accuratly representing there business and then the original company can be forced to forfeit the domain name to the more accuratly named company.
Obviously domain names are been traded in Australia, so that must be allowed.

However, you are right about the rights to a name.

MrsW works for an accommodation website, www.takeabreak.com.au . One day, I mistyped it, and instead typed in www.takebreak.com.au - that directed me to an opposition website. I pointed that out, and they were able to take action to claim "their" website url.
 
If someone runs a company with a trading name eg - Global Object Technology Pty Ltd and registers the domain GOT.com.au and someone else is already running a company called GOT Pty Ltd they can claim the domain to be more accuratly representing there business and then the original company can be forced to forfeit the domain name to the more accuratly named company.

Im not sure the exact wording, but i do remember something along those lines

This is part of the .au domain registry rules in australia i beleive.

No one has any more right to a domain than anyone else. That's a basic principle of the elligibility criteria.

In your example the original registrant would be OK. GOT P/L are within their rights to contest it but they would need to prove bad faith by the original registrant - usually convince the panel that the registrant was deliberately trading off their brand.

Obviously domain names are been traded in Australia, so that must be allowed.

However, you are right about the rights to a name.

MrsW works for an accommodation website, www.takeabreak.com.au . One day, I mistyped it, and instead typed in www.takebreak.com.au - that directed me to an opposition website. I pointed that out, and they were able to take action to claim "their" website url.

And that's a very clear example of bad faith by the opposition website so they were wrong to register it and right to lose it. That's called 'typosquatting'.

Plenty of people do try and come up with a story to protect their obvious cybersquatting. Eg someone by the name of Professor Luf T. Hansa tried to defend registering lufthansa.com.au but it was pretty obvious no such person existed!

On the other side of the coin is where big companies try and use their muscle to wrestle domains from their rightful owners. This is known as 'reverse domain name highjacking'. Probably the most famous example is the domain Nissan.com where the domain owner has resolutely defended attempts to steal his domain.

Visit the site & you can read about the lawsuits etc.
 
The generic & most decent names are long gone, and Australia has much tighter laws than the US with regards to cybersquatting.
They actually did the right thing in avoiding the huge mess that happened in the US.
BlueCard you can't be seen as "passing off" as someone else in any way, round here. And you cant have some competitor's trademark (registered or not) in your "SEO" or site code.
And you still need to meet certain criteria to register a .com.au domain in the first place.
 
The generic & most decent names are long gone, and Australia has much tighter laws than the US with regards to cybersquatting.
They actually did the right thing in avoiding the huge mess that happened in the US.
BlueCard you can't be seen as "passing off" as someone else in any way, round here. And you cant have some competitor's trademark (registered or not) in your "SEO" or site code.
And you still need to meet certain criteria to register a .com.au domain in the first place.

That's right - passing off or using someone elses trademank of brand for personal profit is strictly monitored within the .au namespace.

There ARE plenty of generic names about to register.

As I said in a previous post:

  • When there were 10,000 domains registered, potential speculators thought it's too late all the good ones like cars.com.au and flowers.com.au are gone
  • When there were 100,000 registered, people thought it's definitely too late now - even newcars.com.au and freshflowers.com.au are gone
  • Now there are more than 1,000,000 domains regsitered, people say it's definitely absolutely too late now. Even buynewcars.com.au and freshflowersonline.com.au are gone

As long as the internet keeps growing, marginal names will become sought after and sought after names will become more valuable.

Just like property investment, as long as the population keeps growing, people will need more houses so land previously considered not worth worrying about comes into the picture.
 
But like land, some domains won't resell no matter the price.

You can get land near here for $500. Noone will buy it.

Every time I go looking for domains I find plenty that are for sale for obscene amounts, and I can still get a decent one for $10. So I don't buy them.
 
But like land, some domains won't resell no matter the price.

You can get land near here for $500. Noone will buy it.

Every time I go looking for domains I find plenty that are for sale for obscene amounts, and I can still get a decent one for $10. So I don't buy them.

That's sort of my point though. The hand registering of domains for $10/pop is kind of like the land equivalent of claiming a block with a flag in the old days of landrush!

Maybe you are better off to pay a few hundred to buy an established block closer to the city & closer to amenities etc. Otherwise, you might build your property (your business website idea) but it might flounder unloved on a block of land that no one even is prepared to pay $500 for.

Whilst advertised prices for .au domains are very high at the moment, it's only because sellers are cautious. You might be surprised what offers get accepted.

Again, related to this forum TaxMinimisation.com.au is for sale with a target price of $500 and current high offer of $200. That's pretty reasonable IMO. Think of the branding a PI company could do with that! You can really build your busioness around a good domain name.
 
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