Domains in hand, or cash in bank?

The use of domain names as an investment vehicle has never really hit the mainstream. Yes, sure, there are many canny investors, and some big players amongst them who hold millions of domian names between them.  But we’ve never reached the point where the man on the street, or the big institutions decide to spread their investments into domain names as well as gilts, bonds, stocks etc.

This has always surprised me, for a number of reasons:

• The cost of entry is pretty low.
  1. An unregistered .co.uk domain costs from only £5+VAT
  2. An unregistered .com domain costs from only £6 or so
• The ongoing costs, such as domain renewal, and hosting are minimal
• The value of domain names is generally heading upwards, and will continue to do so for the foreseeable future.
• High quality domain names can earn money whilst you are holding them, depending on your strategy. Basic domains will cover their immediate costs of renewal and possibly hosting. High end domains will earn many thousands of pounds a month.
• High quality domain names are available to buy on the open market. Eventually, domain names cease being traded openly as they reach the perfect owner. An example of this is toys.com. This domain has bounced between owners for years, before being bought by Toys R Us for over $5 million.  Now it’s with them, it’s very unlikely that this domain will ever be available to buy again.
  1. High quality aftermarket names can be bought from a few hundred pounds to millions of dollars, it just takes a keen eye and a good budget.

Now is an ideal time to get into domains as an investment, as they are still priced on the low side, and also could be seen as safer than cash at times over the last year…

In fact well known Internet entrepreneur Sahar Sarid puts it like this:

Contrary to others who are holding back, we feel much safer to invest in domains than having money in the bank. We’ve been buying lately and do not plan on stopping anytime soon. There are many deals out there, and those may never be back to those level ever again. Remember GOOG at 250$? You snooze you lose.

If any big budget holders want to discuss domain names and what possible costs are involved, then feel free to contact me.