Domaining is the business of buying, selling, developing and monetizing domain names. Portfolios of domain names often include cleverly chosen and highly marketable generic domain names (sex.com, business.com, money.com), or domains whose registrations have lapsed yet still retain reasonable traffic because of the inbound links to the domain.

At the top end of the market the values can be significant, Porn.com recently sold for $9.5M in cash, but, while it’s not often that domain names fetch such lofty figures it does happen, Sex.com having sold for approximately $12M and Business.com is frequently reported as selling for $7.5M. However both sales were, at least partly, for stock. Not a bad return on investment considering you can register a new domain from as little as $5!

It’s estimated that there are 8,000 to 10,000 individuals around the world who make buying and selling domain names a significant part of their business.

Although domaining is sometimes controversially compared to cybersquatters, Domainers argue the are different, as they will avoid trademarked names and refraining from typosquatting. They consider their conduct in buying, selling, and developing domain names to be in the same spirit as property investing.

Domainers generate revenue via one of the following methods; domain parking, through the resale of domain names and by developing domain names into fully functioning websites.

Although it might sound like the most exciting Internet business opportunity ever, you’ll need to be creative (or very well funded) to start out in the industry today as the majority of the good domain names have already been bought. However if you keep a close eye on trends and are good at predicting likely future events/products you could do still do well.

So how do you get started?

First off you need to be looking for upcoming trends. To spot trends, keep an eye on the press for example after the iPod it might have been possible to guess based on rumours that Apple would follow it up with the iPhone. Although you’d need to make sure you registered such names before they are trademarked in order to avoid facing trademark infringement action.

Sunday papers could also be worthwhile, I’m still kicking myself that I didn’t go out hunting for a good sudoko domain when I first heard about sudoko.

You could also try predicting likely future technology which will have a generic two or three word name, such as “mobile phone”, “digital camera” and even if the technology exists there may be evolutions and advances coming, such as “digital slr camera”, “3G mobile phone” or “camera phone”.

An alternative to predicting future trends is to explore your hobbies or interests and to examine the keywords people use to search for them. Good Keywords is a great tool for doing so as it gives you an indication of the search terms people use, for example if we consider the phrase mobile phone we’ll find the top 10 other related searches are:

mobile phone
mobile phone shop
mobile phone deal
mobile phone insurance
mobile phone chargers
mobile phone game
contract mobile phone
Samsung mobile phone
mobile phone offer
free mobile phone

Which suggests some possible ideas for suitable domain names.

Generally the best Top Level Domains (TLD) are .com, then .net then the rest. Obviously country specific domains will only tend to be of interest to those targeting that country.

You can search for and buy domain names through Heart Internet who also offer an excellent hosting service.

You can park your domain with Sedo and Parked.com if you don’t wish to create and host a landing page yourself. Sedo will also assist you in selling the domain should you wish.

This post is part of my Internet business opportunities series.

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