Still Room for Players in Domain Name Game

There are a finite number of domains available -- especially dot-com names -- and as more folks go online (1.4 billion at last count, according to Internet World Statistics), internet real estate is growing ever more valuable.

"Domains have been able to defy economic gravity," Jackson says, "because so many traditional businesses are moving online to take advantage of the cost savings and global reach."

Domain-name investors (otherwise known as domainers) purchase domain names from registries like GoDaddy.com; auction sites like Sedo.com, which recently auctioned pizza.com for $2.6 million and vodka.com for $3 million; or from the domain owners themselves. Then they have three options for monetizing the site:

They can "park" the domain, placing relevant ads on it to generate money; they can sell the domain to an interested party or at auction; or they can develop the site into a real business. Most domainers seem to park sites -- either permanently, if ads bring in enough cash, or temporarily, while waiting to sell the name or develop the site.

Getting Started

The barrier to entry for domainers is nil to zero -- great if you're low on funds but bad because the competition is stiff. In a market where Fund.com sold for $9,999,950, iReport.com for $750,000 and even 248.com for $175,000, you can see why so many people are viewing this as the latest gold rush. "You can definitely do it part time, and, in fact, I think that's the best way to start," Jackson says. "This business is open to people from all financial backgrounds. A domain costs less than $10 most places, so you can start with very little. Those who already have a lot of money can afford to buy more attractive assets right away, but others can certainly build up to the major player level. Over the years, I've seen many people become millionaires."