Selling Domains is a Lucrative Business

Posted on May 10, 2006

Selling domains has become a lucrative business for some. It is common to see six figure domain sales these days. USA Today reports that domain name sales generated $29 million in revenues last year. That number will likely climb again in 2006.
"It's a long-term investment, like owning a home," says Lawrence Fischer, vice president of business development at SmartName.com, a company that owns and manages thousands of domain names, including Stockquotes.com. "But if a major brokerage firm came along with a big offer, I would be willing to listen."

Plenty have been willing to pay. Sales of 5,851 domain names generated $29 million in 2005, compared with the sale of 3,813 names for $15 million in 2004, market researcher Zetetic says.

Venture-capital firms, too, are betting on domains. Last year, Highland Capital Partners plunked down more than $20 million on YesDirect, a holding company with 600,000 domain names. YesDirect is developing content for websites using the names, says Bob Davis, a managing general partner at Highland.

Further underscoring the hot domain-name market: Its biggest trade show ever took place in Las Vegas last week. About 400 to 500 domainers and investors took part -- double what the same show drew a year ago, organizer Rick Schwartz says. Officials at Yahoo and Google, both of which own domain names, attended. There, the largest live domain-name auction produced $2.1 million in sales in three hours.
Some of the big profit takers mentioned in the article include:
  • Amy Schrier who sold Blue.com for $500,000 after paying $65,000 for it in 2002.
  • Gary Kremen who sold Sex.com for $12 million
  • Rick Schwartz who sold Men.com for $1.3 million in 2003 after paying $15,000 for it in 1997
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