Speculators are the latest breed of dotcom entrepreneur, buying up website domain names – and making their fortune by dealing in them.

Neil Stanley goes to bed each night knowing he will wake up a little richer. All over the world, the clicks of computer mice are depositing a few more pounds into his account. His secret is that he was smart enough to ask: what’s in a name?

Stanley is a trader in domain names, the addresses of websites which commonly follow ‘www’ and end with ‘.com’ or ‘.co.uk’. Once a banker at Goldman Sachs, he now has a different portfolio of lucrative investments including bridalfashion.co.uk, onlinecareers.co.uk, schoolguide.co.uk, sendingflowers.co.uk and impotency.co.uk.

He is one of a growing band of cyber-speculators able to make a living from buying and selling domain names at a substantial profit. No effort or expertise in building websites is required. Instead, a PC with broadband connectivity and an eye for a popular generic domain is enough to draw traffic and unlock a fortune. Recently Stanley was involved in a deal which registered a domain name for almost nothing and sold it for $40,000 a few weeks later.

‘It’s amazing how many people go to the address bar and type in a generic name instead of going to Google,’ said the 44-year-old from Bath. ‘If you’ve got mortgages.co.uk, you’ve got a licence to print money. It’s an industry in its infancy and there’s a bit of a gold rush on at the moment. It’s amazing that the UK hasn’t really woken up to it yet.

‘The analogy is real estate. The internet got invented and all the land is being bought up. In 10 years’ time any word you can think of will be taken: all the real estate will be gone. If one day someone wants to build a skyscraper on it, you’ve made a fortune.’

There are about 140 million domain names worldwide. The 6.6 million with the ‘co.uk’ suffix, a total swelling by 140,000 per month, are registered with an organisation called Nominet. But most trading is done in a secondary market via specialist websites, such as whois.sc, which can show whether a name has already been taken, suggest close alternatives or offer a route to the existing owner in case they are willing to sell.

Stanley acquired kids.co.uk and is planning to make it a non-profit site for children, but leaves the majority of his domain names sitting idle, or ‘parked’. This means that they are hosted by a specialist website as a simple, customised template containing relevant adverts. Every time someone visits the page and clicks on one of the adverts, the name owner and the website share revenue.

‘Whenever I register or buy a domain name, the first thing I do is park it,’ said Stanley, who is writing a book on the subject. ‘Anyone who then types in that name will see the web page and, if they click on an ad, it generates money. I registered noworryloans.co.uk last autumn and it probably earns £10 a week on its own. My whole portfolio is bringing in hundreds of pounds every week without me touching it, and some people are creaming in thousands. My conviction is that this going to become mainstream because it’s so easy.’

Sedo, or ‘Search Engine for Domain Offers’, claims to have the world’s biggest database of names for sale, with more than 10.5 million listings. Its total sales in 2007 amounted to £37m. In Britain it has overseen the sale of sport.co.uk for £135,000 and mobile.co.uk for £120,000. Sedo also ‘parks’ more than 3 million domains and paid out £25m to customers last year.

Nora Nanayakkara, business development director of the company, said: ‘We’ve spoken to people who are now doing this as a full-time career. People are putting their kids through school on the money they make.’

Last month, cruises.co.uk set a British record when it fetched £560,000. But, America is one step ahead. Kevin Ham, dubbed ‘the most powerful dotcom mogul you’ve never heard of’, is estimated to have stockpiled 300,000 domains that generate $70m a year. He even struck a deal with the government of Cameroon so that when users mistakenly type ‘.cm’ instead of ‘.com’, he gets a slice of the cake.

The 10 most valuable domain names auctioned by Sedo
1 Vodka.com, $3m

2 Chinese.com, $1.1m

3 Website.com, $750,000

4 Telecom.com, $700,000

5 Annuity.com, $600,000

6 Gays.com, $500,000

7 Gibraltar.com, $360,000

8 Sport.co.uk, $265,000

9 Mobile.co.uk, $247,000

10 Fly.co.uk, $180,000

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A cruise operator has paid £560,000 for a domain name, blasting the previous British record sale out of the water.
Cruise.co.uk bought the domain Cruises.co.uk from German travel company Nees Reisen, adding just one letter to its existing domain.

The deal eclipses the previous British record which saw recycle.co.uk snapped up by City financiers ASAP Ventures for £150,000. However, the figure doesn’t even dent the global record held by Sex.com, which was purchased for a reported £7 million by Escom in 2006.

The new owner of Cruises.co.uk says it intends to turn the domain into a social networking site for enthusiasts.

“Cruises is consistently ranked first on Google, with cruise just behind,” claims Cruise.co.uk’s managing director, Seamus Conlon, bracing himself for the following pun.

“We wanted the top positions so that when internet users are searching for cruise deals, reviews or news we are the first port of call.”

Media Corp has acquired the domain name and website sport.co.uk for £135,000 as part of a continuing focus on expanding its digital properties.

Media Corp, which revealed it was overhauling Gambling.com last month, said it wanted to develop sport.co.uk as a key sports portal, with information, news and stats on global sports.

Justin Drummond, Media Corp CEO, said: “The value of a top-tier domain name combined with a profitable advertising-driven business model was recently illustrated by the Group’s successful sale of Casino.co.uk for up to £3.625m.

“We are aiming to replicate this success with Sport.co.uk as we continue to increase the scale and diversity of the Group’s Web Publishing business.”

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Website owners have been warned to keep their registration up to date because lapsed domain names are being snapped up within 10 seconds of becoming available.

Re-registration, which has to be done every two years, can cost as little as £5 but you can pay ten times as much to get an address back – and sometimes far more. Names are regularly sold for more than £100,000, and some for as much as £1m.

Registrants are warned by email to renew, but many do inform registrars that their addresses have changed. There is a 60-day grace period after the expiry date, which the name will no longer work but can still be renewed; but then the name is up for grabs.

A report from Nominet, the not-for-profit company that controls .co.uk registration, says there is a growing secondary market in domain names with some organisations hoarding large numbers of them.

Ownership is often split across a number of companies, so figures are hard to come by, but analysis has shown that around 50 individuals or organisations each own more than 3,000 domain names – between them accounting for five per cent of the .co.uk total.

Trading in domain names is one of two ways “domain warehousers” make money. The other, often done in parallel, is to attach the name to a rudimentary site with commercial links that can earn click-through revenues. Such sites get hits either by clever search-engine optimisation of by having names close to those of legitimate sites.

Phil Kingsland, marketing director of Nominet, said most lapsed names stem from people who have either ceased trading or never really used the addresses.

And he points out that warehousers do not have a completely free rein.

“There is a grey area around using names that people or organisations believe they have a right to,” he said.

Nominet has a dispute resolution system for companies who feel their brand is being ‘abused’ in a web address, though cases do sometimes reach the courts.

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– A typical consumer who misspells a popular URL has a 1 in-14 chance of landing at a typo-squatter site

– Children’s sites are heavily targeted: More than 60 of the most squatted sites are designed to appeal to the 18-and-under demographic, with squatters targeting domains like webkinz.com, clubpenquin.com and neopets.com

– Some typo-squatters take advantage of typing errors to expose children to pornography. In fact, 2.4 percent, or more than 46,000 of the typo-squatter sites tested, include some adult content, and some of those sites are squatters of children’s properties.

– The five most highly squatted categories are:

— Game sites (14% likelihood of being squatted) such as miniclip.com, runescape.com and minijuegos.com

— Airline sites (11.4% likelihood) such as ryanair.com, united.com, and lufthansa.com

— Mainstream media sites (10.8%) such as vh1.com, globo.com and qvc.com

— Dating sites (10.2%) such as plentyoffish.com, true.com and singlesnet.com

— Technology and Web 2.0-related sites (9.6%)

– Automated ad syndication services enable many typo-squatter sites to make money; in fact one search engine’s ads show up on 19.3% of all suspected typo-squatter sites in this study

– The five non-U.S. countries most likely to have popular sites squatted are: the United Kingdom (7.7%), Portugal (6.5%), Spain (5.9%), France (5.4%), and Italy (4.1%)

– The five non-U.S. countries least likely are: the Netherlands (1.5%), Israel (1.1%), Denmark (1.0%), Brazil (0.9%) and Finland (0.1%)

The study notes that typosquatting is not new. They say that the number of cybersquatting cases filed with the World Intellectual Property Organization’s arbitration system increased 20 percent in 2005 and another 25 percent in 2006.

To check out the entire list of findings of this study go here:
www.mcafee.com/typosquatters

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ASAP Ventures, parent to leading car hire comparator Carrentals.co.uk, has purchased Recycle.co.uk for £150,000 – the highest amount ever paid for a .co.uk internet domain name.
The investment is the latest in a series of purchases for the group, which has also recently bought Fly.co.uk for £87,500, broadening its portfolio in the online market into areas as diverse as travel, shopping promotions, dating and recycling.

Commenting on the Recycle.co.uk acquisition Gareth Robinson, marketing director of ASAP Ventures, said, “The purchase of Recycle.co.uk underlines our commitment to growing the business and expanding into new markets. The success we have had with Carrentals.co.uk has been phenomenal, and we have the skills and technology to reflect this elsewhere.

“The investment in Recycle.co.uk may be the highest yet, but it is well founded. The online market is changing rapidly and domain names are key. In the US the market has already exploded, and while the UK operates under different regulations, the potential is vast.“

The £150,000 investment in Recycle.co.uk is the highest published figure paid for a .co.uk Internet domain name, breaking the last recorded value by £40,000, which was set by J Sainsbury plc when it purchased taste.co.uk for £110,000 in 1997.

ASAP Ventures’ travel operations include Carrentals.co.uk; travel comparison site asap.co.uk; and accommodation listings directory Self-Catering-Breaks.com, while the group launched Carrentals.de in Germany last month and plans to launch elsewhere in Europe and Australia over the next six months.

Expansion into non-travel services has been strengthened with the purchase of Recycle.co.uk, while additional brands include Promos.co.uk, Easyfindadate.com and wannabehere.com. The Group is set to develop its business activities further over the coming 12 months with a strengthened programme of development and acquisition.

Since launching Carrentals.co.uk in 2003, the ASAP Ventures group has grown to a sales revenue of over £8m in the last financial year, with this year on target to hit £12m. 2008/09 is targeted at £20million.

Nora Nanayakkara, UK operations director, Sedo, the company behind the auction of Recycle.co.uk, added: “We are seeing a growing interest in the purchase of co.uk Internet domain names in the secondary market. Over six million co.uk Internet domain names are already registered and there is a shortage of available quality names. This is driving the sale of high value generic names, such as recycle.co.uk.”

Figures from Sedo show that in the past year the total volume of co.uk Internet domain name sales in the secondary market has grown by 30% to over £1.5 million, with Sedo accounting for approximately 84% of co.uk transactions in 2006 (source – DNJournal).

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Domain name speculators, open your wallets. Pharmacy.com is up for sale for the first time since 1994 and the domain name’s broker is looking to break a few records.

“Based on modeling, we’re putting it way over $50 million,” said Joshua Bourne, co-founder of FairWinds Partners, an Internet consultancy that is brokering the sale.

Dictionary.com was recently purchased for $100 million and Business.com fetched about $350 million, but those domains were already supporting multimillion-dollar businesses. Dictionary.com serves up banner and text ads and offers reference services, while Business.com also delivers ads and provides basic yellow page services.

By contrast, Pharmacy.com’s owner, Orlando, Florida-based medical equipment seller Rotech, is hoping to bring in tens of millions of dollars for a mere eight letters. The Website itself serves up little more than an enticing promotion pointing out that consumers last year made 100 million purchases through online pharmacies, which are expected to generate $12 billion in revenue this year.

FairWinds has sent out approximately 100 emails to potential buyers alerting them of the domain name’s availability. Mr. Bourne’s email list includes pharmacy chains, retailers such as Wal-Mart and Costco, and websites such as Drugstore.com.

“Imagine the opportunity… www.pharmacy.com,” reads the site’s promo page.

Domain Name Journal editor Ron Jackson said he doubts that a single, undeveloped domain name can command such a high price. He pointed out that Sex.com (~$12 million), Porn.com (~$9.5 million), and Diamond.com (~$7.5 million) are among the highest-selling domain names and none of those has broken the $15 million barrier. Mr. Jackson predicted Pharmacy.com will sell for between $5 and $10 million.

“No domain has ever sold for more than $15 million, so to think that it’s going to jump to $50 million, that’s not going to happen,” he said.

But Jay Westerdal, president and CEO at domain information and sales company Name Intelligence, said he has heard of domain names selling for $20 million or more in private transactions and can understand why Pharmacy.com might be as or more valuable.

“That would set all records. It would shatter them. It would be phenomenal. Really, that’s what domains of that caliber should be selling for,” Mr. Westerdal said.

The value of generic domain names such as Hotels.com and Travel.com lies in the fact that they describe entire categories of commerce. Those are the types of keywords consumers use when they begin a web search, and those terms as domain names rarely go up for sale. Mr. Westerdal said the owner of Travel.com has been hanging onto his domain name for years and refuses to sell until someone meets his $100 million price tag.

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The Web addresses that businesses and people online call home have generated the equivalent of a real estate boom in the real world with speculators, appraisers, developers, investors, and brokers turning the names typed on navigation bars into hefty profits.

“It is a global, multibillion-dollar industry,” said Peter Lamson, senior vice president and general manager of NameMedia, a domain name marketplace based in Waltham, Massachusetts. “Customers need to find your doorstep. A brick-and-mortar business needs an attractive address, and it’s no different online.”

In the 1990s, speculators registered Internet domain names on the cheap, often hoping to make a lucrative flip selling them to someone else. When the tech bubble burst, many were left with little more than words.

But as money has flooded into Web-based businesses like MySpace and YouTube and online advertising has grown explosively – rising by nearly a third each year for the past three years – domain names have again become a hot investment.

Some industry watchers said that the market could prove volatile over time, and there’s always the potential that a speculator will be left with nothing more than a string of words.

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“There’s value there – a few of these companies think they’re worth half a billion because they’ve got all this waterfront property,” said Todd Dagres, general partner and co-founder of Spark Capital, a firm that invests mainly in media, technology, and entertainment businesses.

Backed by the venture capital firms Highland Capital and Summit Partners, NameMedia has raised more than $100 million in debt with the help of Goldman Sachs and owns 750,000 domain names as well as marketplaces where people can buy or sell names. This outfit of “cyber real estate tycoons,” as president Jeffrey Bennett calls it, is just one of three local firms that are playing a leading role in the rush for prime virtual space.

Internet Real Estate Group in Boston takes a luxury developer’s approach to the domain names game.

The company turns a select number of “premium” domains – site names that are instantly recognizable, like jeans.com, chocolate.com, or software.com, into full-fledged Internet businesses with content, ads, and products for sale. Taking another tack, Sedo.com, a German company with U.S. headquarters in Kendall Square in Cambridge, Massachusetts, handles more than $3 million of transactions every month, acting as a kind of eBay for domain names.

DN Journal, an online publication that follows the industry, has tracked five sales this year that topped $1 million each – including Porn.com and Seniors.com – and 50 at $100,000 or more as of July 22.

“We’re about three years into a major upturn,” said Ron Jackson, editor of DN Journal. “A ton of ad revenue started flowing from traditional media models onto the Web and it’s been unbroken upward momentum.”

While people frequently navigate the net by punching keywords into search engines, an estimated 10 percent of searches occur when people type keywords directly into their address bar.

That means a Web site with a common name, such as WiFi.com, already generates a certain amount of natural traffic, and people who buy a portfolio of names could earn a dividend on their investment just by putting ads up, according to Jeremiah Johnston, chief operating officer at Sedo.com.

Think of domain names “as analogous to buying spectrum in the wireless world or channels on television or buying real estate,” said David Liu, managing director of Jefferies Broadview in Silicon Valley.

Mike Zapolin and Andrew Miller, founders of Internet Real Estate Group, got into the domain business in 1998, buying beer.com for $80,000 from a young man in Colorado, who, they said, used the Web site to post photos of inebriated people vomiting. The owner, hoping to buy more beer, posted a banner asking for advertising. They sold beer.com four months later for $7 million. Now, they believe the businesses they are building will ultimately be worth hundreds of millions.

“In real estate, if you built a building and were offered three times what you paid for it in a week, you’d be thrilled,” Zapolin said.

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Inside a midtown hotel, Larry Fischer is on his mobile phone with a financial backer as his partner Ari Goldberger does quick research on a laptop computer.

They are bidding furiously at this auction of Internet domain names, with hopes of snagging megayachts.com. The duo won’t be deterred. They want this name.

“$110,000 (euro79,693), yes or no? Quick,” Fischer barks at Eli, the investor at the end of the phone.

Someone else makes a bid for $120,000 (euro86,938). Fischer and Goldberger up the ante, and then again.

Going once, going twice … sold to Fischer and Goldberger for $150,000 (euro108,672).

“You got it,” a smiling Fischer tells Eli.

These are boom times in an estimated $2 billion (euro1.45 billion) industry that involves the buying and selling of domain names. When people type the generic names into their Web browser’s address field, sites that generate pay-per-click advertising revenue appear. Such “direct navigation” bypasses search engines.

“This industry is like the wild, wild West right now and people have no idea how fast it’s growing,” said Jerry Nolte, managing partner of Domainer’s Magazine, a new trade publication devoted to this little-known world.

Some believe the industry’s market value could reach $4 billion (euro2.9 billion) by 2010 as people continue to purchase approximately 90,000 names a day and the number of domain registrars swells.

At the end of first quarter 2007, at least 128 million domain names had been registered worldwide, a 31 percent increase over the previous year, according to VeriSign Inc., which runs some of the core domain name directories for the Internet.

“It’s not about words,” said Monte Cahn, founder and CEO of Moniker.com, a company that specializes in domain asset management and held the Manhattan auction. “It’s like real estate. This industry is only about a decade old. People looked at domain names as a commodity. It’s a piece of real estate on the Web that can’t be replaced. It’s your stake in the ground, your stake in the Internet.”

At the Manhattan auction, Fischer and Goldberger snatched up four names for more than $1.2 million (euro870,000) and a fifth for a client, representing only a handful of the names sold for a total of $12.4 million (euro9 million) during both the live and silent auction.

The auctions were held during a domain conference in June that attracts some of the biggest players in this niche business.

One name _ creditcheck.com _ went for $3 million (euro2.2 million) but paled in comparison to the sale of sex.com, which sold for $12 million (euro8.7 million) last year, according to Cahn, who knew the site’s buyer and seller.

Fischer, 44, and Goldberger, 46, figured there was money to be made early.

Goldberger’s entry into the business was unorthodox to say the least. In 1996, the Hearst Corp. sued him, alleging trademark infringement after Goldberger registered esqwire.com, which resembles one of the company’s magazines.

The two sides eventually settled and Goldberger, a lawyer, was allowed to keep the name. Word got out that Goldberger knew something about the thorny legal issues involving Internet domain names and people began approaching him for advice.

Goldberger’s fascination with the burgeoning industry was sealed.

“I was an entrepreneur strapped into this suit-and-tie job,” Goldberger said. “Kind of a square peg in a round whole and this lawsuit just kind of changed everything for me.”

He eventually left the respected Philadelphia law firm where he worked in 1997 and joined a small startup in Manhattan called mail.com, which was buying up domain names.

Goldberger began collaborating with Fischer in 2001, building their portfolio of domain names. Together, they became a formidable yet quirky team.

Two years later, they created a company called smartname.com, which they sold earlier this year. The company took names and provided content and links for owners, getting a cut of the advertising revenue. At one point, smartname.com represented 150 owners with about 150,000 domain names, generating 50 million unique visitors a month.

Most of the sites are lucrative for their advertising US dollars. For example, megayachts.com isn’t an actual yachting site, but it contains numerous ads and links for real yacht companies, boats and cruises. The owners of the site get paid each time a viewer clicks on one of those links.

Goldberger and Fischer declined to say how much money they make from pay-per-click advertising.

Bob Parsons, CEO and founder of domain registration company GoDaddy.com, says this type of business is fairly straightforward.

“They make their money in two ways,” Parsons said. “One way is through the traffic they get and the other is the appreciation of the name.”

Parson didn’t think there was anything wrong with the practice as long as those involved weren’t using names trademarked by others.

“Domain names are becoming 21st century real estate,” Parsons said. “Just owning a domain name as an investment, I don’t see a problem with that.”

Anthony Malutta, a lawyer who specializes in trademark law at a San Francisco law firm, sees fewer trademark infringement cases thanks to improved laws.

“Trademark law involving domain laws is much clearer and much easier to understand,” he said. “It’s pretty clear that registering a domain name that corresponds to somebody’s trademark is actionable. As to generics, they’re just hoping to capture traffic. You’re just counting on people typing in generic names instead of using a search engine like Google.”

Malutta said domainers like Goldberger and Fischer are not “gaming the system” which in his opinion would mean registering domain names and then cybersquatting _ driving revenue off somebody else’s trademarked name like Coca-Cola.

Over the years, Goldberger and Fischer have sharpened their formula for acquiring domain names and developing the sites using a fairly simple template, relying on research, savvy and plenty of instinct.

“You either know it or don’t by hearing the name,” Fischer says.

They look for names that hit the “sweet spot” _ short words that describe a high-value product or services related to it. Words that allow them to own a category such as bald.com and cardiology.com, two of the domain names they bought at the auction.

To help figure out a word’s potential value, they see how many hits it will produce using Google. They also troll lists of names with domain registrations set to expire, enabling them to get a jump on buying it.

They don’t bother with dot-nets or the others.

“Dot-com is king,” Goldberger said. “Dot-net is worthless.”

But there’s a big divide between thinking of a good name and getting it. There’s usually a chase, with Fischer trying to persuade owners to sell the names after he locates the owners unless it’s up for auction.

“He’s kind of like a rhinoceros,” Goldberger says about Fischer. “He chases them up a tree and waits them out. He has patience and determination. You got to be aggressive. It’s a tough game now. It’s like the gold rush. The first guys did really well then it became more difficult.”

And expensive. Five years ago, the duo could get a good name for $10,000 (euro7,245). Now the minimum is more like $100,000 (euro72,448) _ as the auction proved. The cheapest name they bought at the auction was blogging.com for $135,000 (euro97,805). Other names sold for considerably less like irishwhiskey.com ($8,000, euro5,796) and Jewishdeli.com ($9,000, euro6,520).

At the moment, Fischer, Goldberger and Eli are sitting on their names. They’ve recently turned down million-dollar offers for stocks.com and home.com.

But as white-hot as this business has been, it might not continue to mint millionaires.

“How long will this model last?” Malutta asked. “It’s definitely a temporal piece of real estate. As technology evolves, maybe direct navigation will fall off the charts and there goes your property.”

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The number of registrations spiked as high as 300 a day, as names such as iPhoneJewelry.com and TheAppleMaciPhone.com were among the domains snapped up last month. But Apple, too, has belatedly swung into action to ensure it carves out the right amount of cyberspace to sell its new gadget, the first web-enabled phone with combined music player that has truly captured the public imagination.Until the end of last week, Apple did not even control the iPhone.com domain name. That website had been around since 1995 and last changed hands a year ago. The site was displaying adverts for a range of iPhone rivals, all sorts of mobile phones with the ability to play music, and no information at all about the Apple device.

That all changed at the weekend as Apple moved to correct its oversight, and the site now links directly to Apple’s own iPhone pages. Details of the owner of the domain name – and of whether they have sold or simply licensed the name – are unavailable because it was registered using a proxy registration service, the equivalent of making a phone number ex-directory.Jay Westerdal, the president of Name Intelligence, which analyses patterns in domain names, said 450 iPhone-related names were registered on the January day that Apple first unveiled its new gadget, and that there could be 8,000 related website names by the end of this year.A lot of the good ones were taken on the day of the announcement by the first people that heard the name, he said, but the quality of iPhone names has been dropping. The really great names, such as iPhoneGames.com, were taken by almost psychic people over a year ago.The profitability or otherwise of these iPhone-related websites will depend on what services their owners start to offer, and on whether they can generate enough interest to get them a high place among Google and others’ search results.

Anyone hoping to make a quick turn by selling the domain name looks likely to be disappointed, since hundreds are for sale on the auction site eBay, but few have attracted any bids.Apple has sold an estimated 200,000 iPhones in the first weekend on sale in the US, where the phone works only with the ATT mobile phone network. ATT’s own stores had sold out, and some customers complained that they were having difficulty activating the phone because a surge in users was causing network glitches.

Source: Belfast Telegraph

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According to independent domain name research company, Zetetic, eight firms dominate the domain name aftermarket. While private sales account for the vast majority of the US$111 million domain resale market (more than 24 percent), eight exchanges or brokers compete for dominance while domain valuations skyrocket.

Keith Pieper, Senior Analyst at Zetetic remarked, ”Private transactions are where most of the big deals take place. But the market has gotten very lucrative with a dominant four holding companies accounting for nearly 46 percent of all transactions.”

Combining the Afternic acquisition with BuyDomains, NameMedia is now a leading player in this space. In sheer volume, the domain name exchange market is lead by NameMedia, SEDO then GoDaddy, the only players managing over 1,000 transactions in 2006. On a transaction level, Moniker leads this group with an average transaction value of US$45,308, followed by SEDO at US$7,180, NameMedia at US$1,845 and GoDaddy at US$822. The chart enclosed breaks down the leading eight exchanges and the trackable private market, for comparison.

Clearly, GDNX and Afternic’s Bazaar are the liquidation outlets for anyone wanting to sell or buy a domain name for cheap. SEDO, BuyDomains and Afternic all compete for the middle tier of valued names with averages closer to the overall market average of US$5,582 in 2006.

However, quantity does not always yield quality. In addition to having the highest average sale prices, private transactions typically have some of the highest quality names as well, often with the shortest character lengths, highest number of incoming links, highest cash flow multiples, daily visitor counts and keyword popularity. However, GoDaddy domain names on average had the highest number of incoming Alexa links while SEDO domain names had the highest number of incoming Yahoo links on average. Domain names sold through Domain Cargo have the highest score for English Written and Spoken popularity while domain names sold through Moniker had the highest internet keyword popularity of the leading brokers. In general, Google Page Ranks are quite low in the resale market, with most exchanges averaging a one out of ten.

A free metrics table summarizing the various averages and scores of each broker is available FREE for a limited time to anyone purchasing a domain name appraisal at www.zetetic.com.

The data above represents aftermarket or broker exchanges and not ”dropped” or ”expired” domain registries such as SnapNames. The data is only from transactions that took place in 2006. Visit Zetetic.com for more about Zetetic’s research and data collection methodologies. While Zetetic makes every effort to collect and track the private market, it is commonly estimated that the private marketplace accounts for more than 80 percent of all domain name resale transactions, most of which are not revealed publicly. As a result, the private transactions listed above are only listed for directional purposes.

Zetetic is an independent domain name research company providing appraisal and analytical services to domain name registrars, brokers, owners, buyers, sellers, speculators and aggregators. Zetetic has aggregated over 39,000 domain sale transactions across over 100 sources since 2003 and has a historical database reaching back to 1996. Zetetic now adds nearly 2,000 additional transactions to it’s database each month. Zetetic currently uses this information to provide domain name appraisals directly to domain name owners, buyers and affiliate resale partners using algorithmic and analyst appraisal methodologies.

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The fact that Andrew Miller and Michael Zapolin don’t speak German was never a problem, until the two Internet investors decided to buy the domain name “choco-late.com.” The owner, a man in Germany who didn’t speak English, was content to paper the site with ads for chocolate companies and collect pocket change whenever someone clicked on one. But Miller, 42, and Zapolin, 40, saw the chance to make millions. “We knew nobody was doing a good job with chocolate in the online space,” says the fast-talking Miller. “And we were imagining how much free chocolate we’d get,” jokes Zapolin, a New Age enthusiast who goes by the nickname “Zappy.” After weeks of voice mail and e-mail messages, all in English, a lawyer in Atlanta called to say he was representing the man. Within days, they were able to buy the domain for $300,000—a fraction of the cost of other generic sites.

Two years later, the Boston-based duo has built an online emporium, complete with boutique sweets, recipes, and articles that run the gamut from the health benefits of dark chocolate to the history of chocolate Santas. As with a mall owner, the key was to attract an anchor tenant in the form of Chocolatier magazine, which provides articles and recipes to the site. Traffic has so far doubled this year, and the site is on track to clear $2 million in revenue. Convinced that chocolate.com could become a $100 million property, they’re now turning away would-be suitors.

It’s another victory for Miller and Zapolin. Through their company, Internet Real Estate Group, they’ve made a career of buying underappreciated domain names on the cheap and turning them into multimillion-dollar properties. Instead of flooding a site with pay-per-click ads and flipping the domain for a quick profit, they’re trying to develop real businesses that will sell for much more. They own 17 domains, ranging from software.com to relationship.com, with a closely guarded list of several others they would like to buy—if the price is right.

They work out of a brownstone on Boston’s tony Newbury Street but prefer doing business at their local Brigham’s ice cream shop. Miller describes himself as the aggressive one who’s always hunting for the next big deal. Zapolin is more laid back and focuses on creatively expanding the sites. They met in the late 1980s as sales trainees at the ill-fated junk-bond house Drexel Burnham Lambert, getting together for gambling trips to Atlantic City and later teaming up to produce infomercials. One of their clients, The Grateful Dead, inspired them to get into the domain game with its success in using www.dead.net to sell merchandise and bring together fans.

They bought control of beer.com for $80,000 in 1998 and built an audience for the site by giving out free e-mail addresses and having fans rate different brews. Less than a year later, they sold it for $7 million to Interbrew, a beer company. The pair then bought creditcards.com for $100,000 in 2003, created a comparison site for credit-card offers, and sold it to a private equity buyer for $2.8 million in 2004. Now that it’s valued by some at several hundred million dollars, they admit to selling too soon.

The crux of the business is the domain name. Chocolate.com automatically gets thousands of visitors a day who type the word “chocolate” into the address line of their Web browser instead of a search site like Google (GOOG ). About one in six Internet searchers never goes to a search site, opting instead for direct navigation. The name also helped the site vault ahead of famous names like Hershey’s and Godiva in Google searches.

Such advantages help explain why the market for generic domain names is booming. Deals for resold domain names hit $700 million last year, about double the figure in 2005 and quadruple the 2004 level, according to Sedo, a domain name brokerage and appraisal firm in Cambridge, Mass.

Determined to turn the name of a popular produce into a lucrative business, Zapolin and Miller don’t want to sell chocolate.com—yet. The memories of offloading creditcards.com too soon also still rankles, though they laugh it off now. “We’re not crying in our soup over credit cards,” Zapolin says with a smile over a raspberry lime rickey and a peanut butter and jelly sandwich at Brigham’s. “We’ve got a few more in our portfolio.”

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POMPANO BEACH, Fla., June 11 /PRNewswire/ — After selling more than
U.S. $5.5 million in premium domain names at T.R.A.F.F.I.C. West in Las
Vegas in March 2007, Moniker.com, the first and only provider of Domain
Asset Management(TM), announced today that its next Live Domain Auction
will be held at T.R.A.F.F.I.C. NYC 2007 on Thursday, June 21 at 3:00 p.m.
EST at The Grand Hyatt Hotel.

Live Auction attendees will be allowed to place bids on such valuable
domain names including:

— Auction.com
— Bond.com
— Cats.com
— CarSales.com
— Commodities.com
— CreditCheck.com
— Dermatology.com
— Dollars.com
— DSL.com
— Elections.com
— Ethanol.com
— Locals.com
— Menopause.com
— Musicians.com
— Pay.mobi
— PuertoRico.com
— Scotland.com
— Seniors.com
— Student.com
— Text.com
— Union.com
— Whiskey.com

“The premium domain name market is flourishing as businesses realize
the significant advantages that these names provide,” said Monte Cahn,
co-founder and CEO of Moniker. “Strategic use of domain names offers
businesses the chance to own their respective markets with the most
targeted direct navigation traffic and by branding themselves online as an
industry leader. T.R.A.F.F.I.C. NYC 2007 presents many opportunities for
businesses to grow their portfolios, address their business needs and
dominate their industries.”

One must be a registered attendee of T.R.A.F.F.I.C. NYC 2007 in order
to take part in the live bidding. The event runs June 19-22, 2007 and is by
invitation only. To request an invitation and to learn more about the
conference, visit http://www.targetedtraffic.com/

Moniker will also be offering proxy and absentee bidding for
individuals who are unable to attend the event. Those interested in
learning more about this process should visit

https://www.moniker.com/absenteebid_newyorktraffic/index.jsp.

Silent Auction Held in Conjunction with Live Event

Moniker will also be hosting a Silent Auction in conjunction with the
Live Auction in New York with thousands of additional names. The Silent
Auction will run online beginning Tuesday, June 19 and ending Wednesday,
June 27.

The Silent Auction allows individuals to take advantage of additional
opportunities to purchase domain names that will support their overall
portfolio.

“The Silent Auctions held in conjunction with the Live Auctions at
T.R.A.F.F.I.C. have proved to be an excellent resource for individuals
seeking a variety of unique and marketable domains,” said Monte Cahn. “This
is an opportunity to bring the excitement of T.R.A.F.F.I.C. to individual’s
desktops worldwide.”

Domains to fit every participant’s budget will be available during the
Silent Auction. At the T.R.A.F.F.I.C. NYC Silent Auction, over one dozen
names on the auction block are valued at more than $ 1 million, while
nearly 3,000 will be available for less $10,000. This wide range gives all
interested participants an opportunity to add to their domain portfolios
with quality, premium domains.

Domain Financing on Site and After

Moniker along with its partner Domain Capital, will offer domain
financing to leverage domain purchases made at this event or for other
transactions. Moniker and Domain Capital have been pioneering the same
concept for virtual real-estate for years in a fashion similar to real
estate mortgage financing.

Listen Live on Webmaster Radio

The Live Auction will also be broadcast live on Webmaster Radio.FM.
Tune in by visiting http://www.webmasterradio.fm/. WebmasterRadio is the
premier free online radio network focused on the B2B marketplace. During
the auction, listeners will be able to join the chat room and connect with
peers in real time.

About Moniker

Moniker is the first and only provider of Domain Asset Management(TM),
a complete set of business services that provide companies a
single-point-of- access to help manage and maximize the value of their
domains. These services include name creation, registration, acquisition,
portfolio management, appraisal and escrow services, traffic monetization
and after-market sales — all backed by unsurpassed customer service and
security.

With more than a decade of experience, Moniker is a top 10 domain
registrar, holds the industry’s highest customer retention rate and
pioneered the industry’s first domain appraisal formula. It is considered
the industry’s premier marketplace to buy and sell domain names.

Customers include savvy investors, Web entrepreneurs and
forward-thinking global companies, including Marchex, Nokta, Future Media
Architects, AOL, Yahoo, the National Hockey League, Major League Baseball,
Lions Gate Films, Bank of America, Microsoft, Jupitermedia, Geosigns,
Mainstream Advertising and many others.

Moniker, with headquarters in Pompano Beach, Florida, is an operating
unit of Seevast Corporation, a company of marketing services firms that
drive sales, build brands and leverage core assets for their clients.

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Registration of new web addresses has dropped off because of a shortage of names, according to the head of one of Britain’s biggest resellers of domain names.

“People setting up a new business are as likely to buy up and old name that is not being used as register a new one. It is very hard to find one that is not already in use,” said Ditlev Bredahl, Danish chief executive of UK2.net.

“I’d guess that 80 percent of the words in the dictionary have already been used. That’s why people are coming up with names like Skype and Joost.”

Bredahl reckoned that at peak in the year 2000 UK2 sold 38 percent of the .co.uk names in Britain, acting as a sales channel for the domain registrar Nominet. “We could offer the cheapest prices because UK2 had automated the whole process.”

A combination of fewer new registrations and stiffer competition forced UK2 to rethink its business. In what Bredahl described as major turnaround it invested in servers, with a infrastructure and staff to support them, and began to host ecommerce and other web servers.

By 2005 domain registration accounted for just 46 percent of its business; now the proportion is closer to 30 percent, though the number of registrations has risen.

UK2 offers “turnkey” ecommerce hosting including stock management and payment facilities using Paypal or Google Checkout from £9.95 a month. “We’ve have got it to the point where virtually all you need to do is upload your product details,” he claimed.

A lot of new sites are started by people who are running a business over eBay and want to try setting up on their own.

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By Jay Finnan, Portfolio Sales Manager at Sedo

I’m frequently asked about the latest trends in domain investing. Where are the pros putting their money? What are the new, ground floor opportunities only a select few know about? What are the secrets, tips and tricks of the successful in this industry? With those questions in mind I asked some of my favorite clients, colleagues and peers (a mastermind of domainerati if you will) what they thought are the best opportunities in the domain industry right now. I got a lot of different responses but several were echoed throughout my conversations. Here I’ll discuss the four best opportunities for domainers in 2007.

CO.UK Domains

What’s the best buy in domains at the moment? Of all the top-level domains (TLDs) we discussed .CO.UK came up the most. Why are the pros so excited about the United Kingdom’s top level domain? A well wired, well educated population of some 60 million English speaking people, who do business all over the world, lies behind an extension that has seen its share of good sales and is still due for many more. .CO.UK is the TLD of choice for most UK developers since it provides the inherent filtering they’re looking for and it has become a sufficiently well branded extension to compete with the .COM. This combination means a lot of natural, type in traffic for generic .CO.UK domains. What’s even better? The root advertiser pays in Sterling.

Spanish Language Domains

More than a couple of the people I spoke to considered Spanish language .COMs at the top of their buy list at the moment. There are still gems left to be registered here. Or so claimed one of my favorite clients, who even went as far as saying he could periodically find generic Spanish .COMs with considerable type in traffic available to register and many more on the secondary market at fair prices. As good as the sales have been for descriptive Spanish domains, its definitely a space where deals can be found with a lot more regularity than their English counterparts. Though they’re excited about the space, all cautioned that a good command of the language was a prerequisite to finding the right deals.

Financing

Among the many things my mastermind group was especially excited about was the ability to finance domain purchases. Thanks to companies like Domain Capital, which offers domain financing for small, medium and large scale domain purchases, more buyers are in the market. Prices are getting more competitive and deals are getting done. Even for domain investors, this is becoming a preferred way to lock up key investment opportunities that they don’t immediately have the cash for.

Lucrative Sales Opportunities

That brings me to our most discussed opportunity. Most of my mastermind group weren’t as excited about what to buy, as much as they were about the prices their domains could fetch now. There have never been as many buyers in the market as there are now and more are entering the market every day. Of course many are new to the market and are uncertain of value. But the money is there to make some great sales on an individual and portfolio basis. The latter is especially interesting as more aggressive buyers have entered the portfolio market. The old model of using a base multiple of parking stats is being trumped by more aggressive buyers that are willing to consider resale value and all cash flows.

Turning domains into cash can lead to much bigger opportunities with the right plan. Such is the opinion of John Reese, founder and CEO of income.com. I got the chance to chat with Mr. Reese the night before he delivered his keynote speech at a recent domain conference in Las Vegas, Nevada. Reese attributes the sale of ship.com early in his career as the vital key he needed to invest more heavily into the market, which eventually led him to millions. Similar statements were echoed by all the investors I spoke to. There’s no better time to negotiate than now. A lot of new buyers are in the market and they’re prepared to invest for endgame purposes of the domain. The key of course is having a plan for the revenue once you’ve sold. If you’re selling to buy into a more lucrative opportunity then there’s no worry to be had about leaving money on the table.

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