Generic Domain Names become Big Business in Cyberspace Land Grab

[mandy]

You might not think of generic Internet addresses like Carbs.com as the beachfront property of the Web, but plenty of financial heavy-hitters do, and they're snapping up such real estate -- fast.

Starbucks Chairman Howard Schultz, billionaire Ross Perot and Richard Rosenblatt, former chief executive of MySpace and its parent, Intermix Media, are just three of those attempting to build sprawling businesses around Web domains.

And the list is growing. ``As of late 2004, it wasn't obvious to us that you could turn domains into a real business, but that's definitely proving to be the case,'' said Jeff Horing, a venture capitalist with Insight Venture Partners in New York.

Why are these properties so hot? It owes to a rapidly growing phenomenon known as direct navigation, in which people skip search engines and instead try to find things directly online...

full article: http://www.siliconvalley.com/mld/silicon...552993.htm

[accentnepal]

Typical piece written by a reporter who has only part of the facts. Domain name forums is where I have been this past while - I missed most of the Great Tulip Food Fight (not sorry about that).

Yes, the big boys are moving into domains, have been for a while (nice to know about Schultz and Perot - didn't know that).  But the traffic thing has been played out for a while. If you buy a name with "natural traffic" (not from old links that can go away or advertising) then you will pay about what that income would cost in an average investment. Indeed most observers believe that it is internet newcomers, mostly, who are not familar with search engines, who type in random names, so as the populace becomes more savvy type-ins will go down.

No, the idea, as best as I see it, is that prime domains are rare commercial  real estate. The value to businesses of a catchy, easy to remember or easy to type name is rising ---> 50% to 80% PER YEAR since the dot com / stock market fall.

And if the big boys take notice, as this article says they are, watch out.  Rick Schwartz, known as the "Domain King" because he has the biggest pile, is worth about 20 - 30 Million $. Howard Schultz or Ross Perot could eat that for breakfast and still be hungry.     


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