November 21, 2020 is a daily online magazine covering small business news. We help entrepreneurs transform ideas and innovations into greatness.

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Domain Name Speculation

Written by Charles Mburugu for Gaebler Ventures

Domain name speculation has grown into a big business in recent years. It involves purchasing domain names that look valuable, and holding on to them in the hope that someone might want to buy it off in the future. This can be very lucrative with high value domain names. For instance, was sold for more than $7million! So, what issues should you consider before venturing into the domain name speculation business?

When speculators buy a domain name, they usually create a page to indicate the domain is up for sale. This is a kind of free advertising which can be viewed by anyone interested in that domain name.

However, domain name speculators don't just make money by selling domains. Besides the for-sale adverts, many speculators park their domains at a domain parking service. Such services offer free storage for simple websites, and place relevant advertisements in the parking pages. The advertising revenue is shared with the domain's owner. This way, speculators get free hosting for their domains, plus occasional advertising revenue.

There are crucial factors that should be considered before venturing into a career in domain name speculation. While it is wise to purchase high value domain names available, making a significant return from domain name speculation may require considerable resources. It will be quite expensive to purchase enough domain names to earn a stable income, which means this is not a get-rich-quick scheme.

In domain name speculation, you should check out the different domain name registrars and inquire about opportunities to purchase in bulk. Domain name speculators usually buy many names daily, and should therefore get the best discounts for domain names. Most registrars make provision for purchasing domain names in bulk at substantial discounts. Taking advantage of such opportunities could make the difference between failure and success in this venture.

Choosing which domain names to buy can be quite a challenge. It is not easy to get high quality .com names. However, don't ignore country specific extensions. As more countries acquire their own extensions, many more high value domain names are now available to speculators. In addition, new top level domains are always being created.

While much has been mentioned about buying names like, this tendency may not be very productive. Trademark laws enable companies with trademarked names to acquire domain names which infringe their trademarks. Therefore, instead of getting rich from registering a company's trademark, you are likely to be slapped with a lawsuit requiring you to forego the name to them.

Domain name speculation should be seen as an investment opportunity. Just like other investments, the returns will be determined by the decision making skills and wisdom of the investor.

Charles Mburugu writes for us from his home in Nairobi. He has a graduate degree in Business Management from Kenya Institute of Management. He is interested in writing about branding, CSR and intellectual property.

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