Domain Name Economics – Surfing the Bubble

Virtual realestate is booming. Who would have thought domain names would be the thing to buy?  There is a great story about Kevin Ham, the doctor who bought up expired and misspelled domains and now has a $300M empire.  It blows my mind because I watched it happen (literally, I was at my computer for most of the last decade).  Like most of us, I never saw where it would lead.

Today, it is extremely difficult to get a new domain name that is original, easy to spell, fits the market, and is concise.

Framing it economically, the way it played out makes perfect sense. Demand is growing exponentially against a fixed supply of .com names. There are only so many useful combinations in the English language. The upkeep cost of a domain is minimal ($10/year on average). The risk is essentially zero, unless you are squatting on a trademark.   The move to add new domain suffixes (top level domains), like .biz, .info is trying to free up supply. The problem is, they are not as respected as as the .com ending. I hope that all changes and domain suffixes become a thing of the past. Then the bubble will burst.  Dot-com is an over saturated name space, and now a virtual real estate market as I will explain more below.

Most remaining .com domains are:

  • Useless as company names
  • Too random
  • In violation of a trademark
  • Hard to spell
  • Super long, with 3-4 words in them (as in German compound words, eg Verbesserungsvorschlagsversammlung – which means a gathering of suggestions for improvement).

What to avoid:

  • Hyphens, or using numbers as trick words.  The exception is more and more companies incorporate colors or numbers into their names, which can work pretty well.
  • Words that run together.
  • Misspellings of an existing brand.
  • Words that don’t fit with your market.

There are some fun tools out there to help generate suggestions:  – A team from San Francisco used the .nr suffix to help craft the name of their product/company. For tech sites, that is a great idea, as geeks can easily parse out the hakspeak.  If your target audience is the tech community it makes perfect sense to take advantage of domain suffixes to trick out the name. will automatically identify if any trick domain suffixes can be used.  The .io suffix works really well.  Another popular example is  (.ly is the domain suffix for Libya, .io is British Indian Ocean Territory, and .nr is Nauru).  Here is the complete list of domain suffixes. – Generates all kinds of names, over 500 on a page at a time using word combinations based on what you suggest. It tries adding words like epic, share, deal, now – which I think could be useful. Also comes up with stuff like cowboy, bunny, elf, busters, omatic…  The entertainment value alone is worth visiting the site and typing in a few words.

Another option is to buy an already registered domain.

There are small businesses popping up around the idea of brokering domains for sale.

I’m very amused to see at NameLayer, the domain is reported to have sold for $20,000!  Really,  I guess it is true, one man’s trash is another man’s treasure!

Here is an interesting tool for looking up what things are selling for:

For more reading:

This article contains a lot more insight into the issue.

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