Earning a Second Income

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Many raredomain name speculators have assembled substantial collections of some valuable domain names to hold as speculation assets hoping they grow in value over time so they can sell them at a substantialgreater profit. Most of these speculators have so many names in their no time to flesh them out into full blown web sites with original products or services. Instead they place the names at a hosting company that creates a page with pay per click ads. That is why you will regularly see websites dot com domain names simplyrelevant websites.

This historically was an effective method of monetizing good domain names since most of the traffice would click on the links. However, these days the track record of click thru rates has decreased because surfers are knowledgable about these sites and exit immediately without clicking on these links because they are seeking more real results – not these monetized pay per click links. Also, the PPC amounts have declined significantly too – up to forty percent.

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Because of this downward trend in both traffic and clicks rates and income, the generic domains economy has also seen a down trending of selling prices – up to fifty percent as well. The economy has probably augmented to this effect as well since the first assets to fall in value in any market – real estate or virtual real estate – are speculative properties. Prospective buyers are now seeking for investments that provide a reliable return on their . This would be like a commercial real estate investment with full occupancy, for example, or a developed domain name that sells products or services and offers useful content.

Just like the collapsing real estate values around the United States – domainers, especially those with generic domains in their investments decay. Many are in worrisome denial and believe their names are more valuable than the market will bear. Potentially, they run the risk of holding on to a domain name and going for a ride down to the basement hoping one day it will rebound back up. A more prudent strategy may be to sell at market prices currently and wait until the market bottoms out and buy up deals at a depressed value.

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With foreclosures increasing every month and more banks diving in deeper trouble because of mortgage defaults continuing at a historic rate as well as credit card lenders showing huge defaults, the cross market effect through every other sector will continue to unravel. In essence, speculating on generic domains is becoming increasingly more risky.

I have several clients who have been sitting on great domain names for ten plus years – they missed the speculative boom prior to the bust of 2000 and they have been bypassed by the recent cycle which has cooled off late last year and dramatically more in 2007. Had they sold before 2000 they could have had a lot of cash to buy premium peak in 2006 and profited handsomely. Holding on for the swingcycles of the market is not the wisest of strategy. Fixating on highly speculative prices for just an undeveloped domain name has become even more unrealistic and will likely lead to disillusionment down the road.

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The optimalowners is to spend the energy to real site that offers original content, offers actual products or services and get it indexed in the search engines for the most common keywords rather than of relying solely on direct browser type in traffic alone for traffic and revenue. There is heaps more money opportunity in a fully developed website business with a powerful domain name in the end. Business.com is a stellar example of this methodology – bought for seven million dollars prior to 2000, however the website was completely developed into a major hub netting $15 million a year and was listed in 2007 for an estimated $400M . Now that is a awesome strategy and a terrific model to work towards for any domain investor.

David Fairley
Websiteproperties.com