Xavier Buck planned to spend $100,000 (around Rs40 lakh) to bid for domain names, those parcels of virtual Internet real estate, at a live auction in Los Angeles, California, in January. He blew past his limit in less than an hour.
By the time the 3-hour auction had ended, Buck, chief executive of the Luxembourg-based company EuroDNS, had spent $150,000 for 15 appealingly generic names, including 7th.com, Chaptereleven.com, and Computersystems.com.
“These names will pay for themselves within two years,” Buck said. “The world is only now beginning to discover how important it is to have these assets.”
For the first time, people outside the traditionally insular and sometimes underground world of domainers, as they call themselves, might agree with him.
The practitioners’ fundamental assertion—that names of websites can be valuable, cash-generating assets just like stocks, bonds or property—appears to be gaining broader acceptance.
Buck and other domainers profit when inexperienced Internet users type those names into their Internet browsers and, once on the website, click on related advertisements. In the longer term, they hope to resell their domain names for large profits to companies that want to build real businesses with those Internet addresses.
Domainers have generally had a negative reputation. Domain-name trading takes little effort, relying on clicks from people who guess at a website’s name or are too lazy to use a search engine.
But increasingly, there is serious money at stake. Last year, 106 domain names drew more than $100,000 each, and one, Porn.com, went for nearly $9.5 million. In 2006, only 70 domain names sold for more than six figures each. Millions of generic domain names, pointing to websites with little more than automated Google or Yahoo text ads, brought in untold millions of dollars.
“The industry was very secretive for a long time,” said Frank Schilling, an industry pioneer who hit it big with Internet destinations such as Drugproblem.com and Diamondweddingrings.com. “When you make millions at home in your underwear, you are not telling a soul about it,” he said.
But like other veterans, Schilling does not appear to be completely enthusiastic about the business’ new direction. “These shows let everyone know how good it is,” he said. “The wildcatting days are over. I would be lying if I said I didn’t miss them.”
©2008/The New York Times
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