Domain Investing No Longer a Major Money Maker

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May 6, 2016
Once upon a time, individuals who wanted to try and strike it reach over the Internet would go on domain hunts. During a domain hunt, an individual would especially purchase a a dormant domain based on the name. It then would hold off for someone who wanted the domain and, in return, sell the domain for far more than what they paid for it. This is basically the practice of digital real estate. Buying property that will likely prove valuable in the long run by the right buyer. With this in mind though, it often could take years for a possible domain to prove fruitful, if ever. Now, several years ago, when the likes of Go Daddy and other domain offering services made it big, domain investing proved to be all the rage and offered the potential for anyone to take part in this digital real estate investment practice. Times have changed.

The Times Have Changed

The Internet has long been a a place where individuals could make a substantial amount of money. The available options for making money has always evolved. From creating short lived, quick websites to making money off of content mills and other basic services, domain investing proved to be a very long lasting investment opportunity. However, this no longer is the case as the times really have changed in the world of Internet money. This is not to say all domains have been purchased. Not at all. There will still likely be domains that are bought and sold for profits for the rest of the Internet’s existence (as there is no end in sight and the Internet is only expanding every single day, this likely will never happen). While some domains will sell, buying and sitting on a dormant domain is not going to prove as beneficial as what it once did.

How Buying Domains Has Changed

When domain investing first started, it was all about buying an easy to remember domain that would prove beneficial for a particular company or service. Singular words were often the most valuable, such as Shoes.com, Tables.com, Computers.com and so on. Other, major companies saw the power of having a simple, easy to use domain name. This, however, is no longer necessary as it is far easier to find a particular company or service without an easy to remember domain name.

The failure of domain investing if directly connected with the evolution of search engines. A search engine around the turn of the century could provide basic search features, but the algorithm used to determine the top search results were not all that refined. It often simply showcased websites with a matching URL. So, if someone searched for “computers” they would almost automatically see Computers.com as the top, if not one of the top search results. Due to this, having such a domain proved extremely beneficial and profitable. No matter what other search engine optimization other domain holders utilized, it simply could not compete with the domain name.

Search engines have altered greatly in recent years though, as the power of the current algorithm makes it possible to have a domain that has nothing to do with computers, when selling computers (or anything to do with the given topic). What matters is the material and information on the inside of the website. Once search engines became more powerful, domain investing lost its favor. Individuals holding particular domain names could no longer ask as much for the website as it did not guarantee a top ranking, or even a first page ranking for a particular product or search result. While having a matching URL can help, slightly, search engine optimization really is about the information on the page and not the URL.

Different Is Better

It has come to a point in the world of domains that different is better. Now, popular websites can feature website domains that have nothing to do with the given topic. Whether a particular website is for a professional photographer of a sports blog, the name doesn’t need to be a matching URL. In fact, something off the cuff can make it more memorable. Regardless of the topic or the services offered on the URL, domain investing has gone, more or less, by the wayside.

It Is Still Possible to Make Money

Now, the general notion of domain investing has changed. It is no longer ultimately possible to purchase a domain, have it sit dormant and to sell it. Outside of the original asking price, it isn’t all that possible to make much, if any money off of the selling of the domain, at least without doing anything to it. In order to increase the value of a given domain it is necessary to boost the desirability of the domain. This means physically creating a website and bringing in traffic to the page. This way, if someone is interested in the domain, they do not just purchase a blank domain without any actual traffic. If someone can build the website domain into something with strong SEO or that receives considerable traffic instead of what

a blank website, the holder of the website can make money off of the site. With proven Internet traffic, this makes it a valuable upgrade that will allow the domain holder to ask for more money. The amount of money they can ask for simply depends on the kind of traffic the domain brings in on a daily (or monthly) basis and if there are customers heading into the website.

This practice is similar to selling a rental property without any tenants versus selling a rental property with rental tenants. When the property is sold without tenants, the individual buying the website still needs to do what they can to bring in value to the property and rent it out. Until they rent it out, they simply will not make money. However, if there are tenants currently paying rent, money is coming in and the buyer of the property can instantly receive some sort of return on their investment. When buying a domain, it is far more valuable when there are customers currently visiting and paying for services off of the website.

What Should a Current Domain Holder Do?

So if someone currently owns domains and they want to sell the domains for profit, what should they do? After all, it isn’t like it was back in the day where they could sell it for hundreds, if not thousands of dollars of profit. First, they can simply put the domain on the market for a few dollars more than the original purchase price. Outside of a few domains out there, the domain typically is not going to increase in value all that much when sitting dormant. If someone actually wants to make a large profit off of the sale of their domain, they need to put in some work.

What kind of work should the domain owner do? Ultimately, they need to build a website. They need to build up actual content on the page. Even if there is no desire to do anything with the domain in the long run, creating a website is like performing a renovation on a house. It boosts the value, even if the end game is to sell it. From creating a blog on the page to actually selling products and services, this is going to drive traffic to the website, which in turn boosts value. The more traffic the website readily receives, the higher the value of the website.

Is it Possible to Make Money Off of Domains Currently?

While it isn’t impossible to make money off of domain investing currently, it is far more difficult than ever before, and most of the time it simply is not going to have any kind of profit. Buying a potentially desirable domain may prove fruitful in the end, but the owner needs to put work into the domain to actually make a profit of more than a few dollars. If someone who is buying domains or currently owns domains doesn’t want to put in work, they are not going to make any money off of the purchase and it will not prove to be any kind of investment. So, while yes it is possible to make money off of domain investing, it is far more difficult now and it will take a bit of work to do so.

Should Someone Consider Domain Investing?

Ultimately, it comes down to the person and the website. The best reason to buy a domain, whether it is an attractive domain or not, is if the buyer actually wants to build something on the site. Maybe they sell the domain in the long run after running it for a year or two, building up traffic to the site. If someone really doesn’t have any real desire to do anything on the domain, buying it might not prove all together fruitful.

Now, with that being said, there is kind of a work around. It is possible to look up domains owned by current companies. For example, looking up Apple, Google, Microsoft, Ford or anything of this nature. It is possible to see when ownership of the domain expires. Should ownership of the domain laps (even just a few moments (it is possible to swoop in and buy the domain. The company is not going to want to develop a brand new domain as this just is too expensive. All of the marketing for the company would have to change and it would confuse consumers. When this happens, the company that let the domain laps typically pays a good amount of money for the domain back. This is the best way to make money off of domain investing, although it is more about timing and luck than anything else.

One other option that has come to light recently is buying domains buy potential presidential candidates. Purchasing the full name of a presidential candidate, or one who might run in years to come, may come with a similar payout. The great thing about this is the payout might not come from the individual running but their opponent. In the latest U.S. presidential election, Donald Trump’s team purchased JebBush.com and used it as a landing page for Donald Trump. It shows that a savvy individual can make money, in some ways through domain investing.

Is This Kind of Online Money Making For Anyone in Particular?

Ultimately, this really isn’t desirable for anyone. Someone can build a website, put time into it, pay to maintain the domain, and then never sell it. That is a real possibility. Periodically looking into the potential expiration of a domain can prove fruitful, but this is more of a hobby than anything else. Someone will need to look up the information and stay on top of extending ownership of the domain.  

Summary

For the most part, domain investing is all but dead. While there are a few potential ways to make money in domain deals, the best way to do this is building an actual website and boosting domain value.


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