Archive for September, 2009

Profiting from Online Property

Domain Name Brokering

Have you ever wondered how people make money online “buying” domain names? During the big Internet boom of the early 90′s I was fascinated with domain brokering, however, it wasn’t until years later I actually learned how to make money as a domain broker.

Your first hurdle usually comes when you find out you don’t even own the domain name, rather you are merely renting it. You can rent the domain name indefinitely, but owning it isn’t an option.

The logical question from novice domain brokers is: “If you are renting a domain name, how can you make money brokering it?” After all, if you are renting an apartment you can’t make money brokering it to another renter. Can you? In a word, no.

But you don’t need to own domain names to make money with them, if you did, domain brokering wouldn’t be so popular. Using the apartment example, lets look at it like this. When you rent an apartment no one else can rent it. You live there. You take up that space, so nobody else can use it. The same goes for the Internet.

A top level domain name can only point to one website at a time, and that is where domain brokering comes into play.

Do you see how domain brokering works? You are essentially leasing or transferring the domain name rights to another company.

While you can theoretically broker any domain name, it helps if the domain you are trying to broker has some equity.

What is domain name equity? Well, lets look at it with another real world example. If you own property in Atherton, California (currently the most expensive city to buy property in in the US), it is likely to be worth more than property anywhere else in the United States. The Internet isn’t much different. In fact, most of the offline business models have online counterparts. Domain brokering is the equivalent to a land developer. Or at the very least a real estate agent.

When you broker a domain you sell the rights to that domain to another company, or you lease the name to them for a period of time. You make money, because the domain name has value, either because it is currently trendy, or it fits into the company’s niche.

Lets explore these options a little further.

First, take the trendy option. If you have been a part of the online community for a little while, you know which sites are currently the top hangouts. They’re trendy, and there are a lot of other sites out there offering supplementary services to these sites. They are often similarly named and styled. Often, domain name brokers will create derivative names for the “in” sites. These names are now in their portfolio. As popularity grows for the site, demand also grows for good domain names to offer supplementary services through. This is where the domain broker’s portfolio comes into play.

Brokering the domain names now will result in profit. The amount of profit depends greatly on the demand for the domain name, and the experience of the broker.

One case of trendy domain brokering is casino.mobi, which was brokered for $135,000. This isn’t an unheard of amount for domain brokering, some portfolios are worth millions. However, it was a milestone for the .mobi top level domain names.

What about niches? You know the expression: “find a niche and fill it.” Niches are what drives business on the web today. They are also lend themselves to domain brokering.

Let’s use a fishing example here. But before we do we will have to zero in on our niche. Fishing isn’t a niche, it is an umbrella term. Fly fishing is a niche, so is deep sea angling. The more granular you can make your topic, the more potential you have to dominate it on the Internet.

The deep sea angling niche is granular enough to rank in, yet still gives us some room to grow. And since it is our passion, we were able to build up a lot of content on the topic. We have even found like-minded people to share our passion with. We now have a community. This domain, let us call it YourDeepSeaAnglingSite.com, now has equity.

If you were looking into brokering this domain name now, you would see that it is more valuable than it was when you first got it. How much more depends on what you’ve done with it.

These are just two examples of how to make money in the large and lucrative domain brokering industry. Which is just one of many ways people make money online today. Hopefully you have enjoyed this article as much as I have writing it for you. And that it has helped to clear away some of the mystery surrounding domain brokering.

Is your major source of traffic going to be organic search results or even pay per click (PPC) campaigns? Then it makes sense to focus your domain name on the main keyword you targeted when researching your niche.

For one, the domain name has an impact on telling the search engines what your site is about. A keyword focused domain name makes ranking in your target niche a whole lot easier.

Second, search query terms will appear bold in the Google Search Network. So your websites URL will be easier to distinguish from the competition. Also, it will show your potential visitors before the click that you offer what they are looking for.

However, buying a short tail domain name, consisting of merely one to two words, can be difficult.

A lot of top keyword focused domain names are already in use, many are parked, and some are being auctioned off for more than you might be willing to pay.

Don’t be afraid of long tail phrases when buying domain names. Too generic short tail phrases are likely to attract too large of a demographic.

Make sure you get both the hyphenated and non-hyphenated version when buying domain names. For long tail keyword phrases it is best to direct traffic to the hyphenated version of your domain. These are easier to read for both humans and search engines. Redirect any secondary domain names you buy with a 301 Permanent Redirect to your primary domain. This saves you from generating duplicate content.

For offline branding purposes you may want to consider buying a shorter, if necessary less keyword focused domain name that will be easier for potential customers to remember.

Buying Top Level Domains

I recommend using the .com extension for most online purposes. The .com top level domain (TLD) is recognized and remembered by most people as the default and legitimate web extension.

You may also want to consider buying the .net TLD web extension. However, I do not suggest only buying domain names ending in .net. Why? Simple. If someone else buys or owns the matching .com domain you may end up loosing visitors to them because people mistook their .com for you.

The .info TLD may sound interesting for certain business models. And with their low prices, buying domain names ending in .info can be very attractive. Still there is a very small problem with buying these domain names. Let me ask you a question. When was the last time you saw an .info TLD listed in a search engine result? The answer is rarely. The reason you don’t see them any more, they were greatly misused by scammers and have since acquired a bad reputation.

Don’t worry though, with a little creativity buying domain names can be fun. Some examples of services that use more exotic extensions to build their brand are bit.ly and del.icio.us to name a few. It is important to note that most of these sites buy the matching domain name with .com extension, too.

To conclude, buying domain names is often the first hurdle you face when you decide to start your online business. Because buying the wrong domain name can make or break your business it is important to get it right at the beginning. Once you have bought the right domain name the rest of the pieces fall into place easier, and your marketing efforts will be more effective.