TulipTools Internet Business Owners and Online Sellers Community

I have been hanging out on domain forums recently. It certainly has been eye opening.
Money is starting to come into the field from venture capital companies. Registrars are keeping un-renewed domains for themselves. All English dictionary words and all two, three, and four letter combinations are taken in .com and finding any meaningful general term is difficult. Companies are buying 100,000 names at a time.

Some observations:
Most of the speculation is in .com. While people who build websites and, most importantly, those who visit them, are slowly learning that there are many extensions, the big money investors are mostly focusing on .com, assuming that it will remain the prestige address.

Prices may go a lot higher. The biggest reported sale this year is website.com for $750,000. While that is a pretty good bit of money to us peasants, it would buy you about 20 seconds of ad time during the Superbowl. If the internet is the business media of the future, and if (big if) .coms remain the prestige address, then the most sought-after domains will eventually reflect the value of prime major city real estate. Think Fifth Avenue.

There may (big maybe, again) be space for the little guy here. When a town grows the central areas start commanding flashy prices. But sometimes the real percentage gain is in the outlying areas in the path of growth. The trick is to find those areas that are next to move from unregistered or cheaply purchased domains into sought after regions.

There are people making good money selling and developing domains. There likely will come a time when speculators will rush into this field with bigger money wanting a piece of the action. 100,000 new domains cost less than a million dollars per year. This is literally pennies to the investment community. Hang on, this could get wild - and remember that speculators will jump out of a market far faster than they jump in.

So it was with tulips! Great digs BBH!

Registrars are keeping un-renewed domains for themselves

Yeah, Register.com kept a name we didn't renew last year. 

I don't think I'd call the domain name market today the next gold rush...the gold rush for domain names really ended in 2000 when domain name prices completely collapsed (the 2000 collapse is why our domain info/registration site and domain name auction site have been dormant for over 4 years now).  The domain name market today is definitely making a strong recovery now, but prices are still below what they were before the dot com collapse.

So it was with tulips!

Yep, tulip mania

I was not around for the 2000 collapse, not sure I would have wanted to be.

Seems like it was a case of the right idea (internet as global marketplace) too early, with a lot of speculation under the assumption that anything internet will make money.

It certainly could happen again, both the up and the down. There is a cycle of slow growth, acceleration, speculation, and collapse in markets - like the stock and gold market it is a real trick to find where a particular market is in the cycle and ride it.

Without the benefit of seeing the Domain name market over time, it does look to me like it is in the acceleration phase - there is a lot of new money coming in but most of it is being placed with at least some care. 

I was incorrect in my statement that all 4 letter .com domains are taken - I based that on Dotster's domain finder tool which shows all listed 4 letters as taken - by Dotster. Their tool appears to show names that people entered into Dotster's search but did not buy. Yeah - it looks like if you search a name idea at Dotster then they will screen it for themselves then flog it to their other customers!

It appears that about 10 - 20% of the roughly half million possible 4 letter .coms are still available.