The Online Real Estate Game: Buying Web Domains

The housing industry may not see much action for a while, but real estate on the Internet is booming.
 
Just ask Mike Cassidy, a 25-year-old, whose Web domain names that he bought for $5.99 are now being appraised at $1000.
 
“You are your own boss, you make your own hours, and you get what you put into it,” Cassidy said.
 
So who are the players in the domain-name buying industry? There are large companies with huge portfolios of a million domain names, but there are also thousands of full-time and part-time individuals who buy and sell on their own, said Andrew Allemann, 32, editor of domainnamewire.com. The industry as a whole is worth billions of dollars, he added.
 
The domain registrar, godaddy.com, alone made $750 million last year.
 
And there are more than ten domain name conferences scheduled to take place around the country this year.
 
“Demographically speaking, the conferences attract a lot of 20-somethings that have done quite well in the industry and are almost retired,” Allemann said.
 
Cassidy usually buys Web domains 10 at a time for $5.99 each. On average, they sell for about $50.
 
Until he sells the domain, he creates content-driven Web sites to increase repeat traffic and host ads. It takes about a week to get the site up and running.
 
It may sound simple, but it takes creativity and a good eye for trends. Domain buyers have to predict the next big product or buzzword before it becomes popular. It is an industry based on instinct.
 
“I’ve taken five to 10 minutes to reflect on if I really want to register a domain, and when I re-log on, I find out it’s already taken,” Cassidy said. “You’re competing with other people, and it’s a great feeling when you get the domain you want.”
 
When President Barack Obama introduced the Cash for Clunkers program, Cassidy scooped up domains that incorporated those words. Since then, he has sold most of them, but he still generates ad revenue from www.nextcashforclunkers.com.
 
When Cassidy saw tablets were becoming more mainstream, especially with the looming introduction of Apple’s iPad, he worked fast to acquire that real estate.
 
He admitted he has a lot of duds, too. For example, he bought a lot of .tv sites, the country code for Tuvalu, thinking it was an emerging trend. He hasn’t been able to unload any, but he is still holding on to them.
 
“I bought a bunch of weird sounding domains just because i thought they were cool - example sizaz.com - still trying to find a place for them,” Cassidy said.
 
He said his most successful domain names are the mobile tech ones, but didn't share the specifics. He is still making purchases for certain “niche” words.
 
To get into the web domain real estate business, you need some basic knowledge of html and some graphics skills, but you don't need to be a computer programmer, Cassidy said. And with the low price of the domain names he purchases, his business costs are minimal. He hosts his sites on Wordpress.com, which, with the premium package, costs $160 per year. As for time, he invests about two hours a day in the business. (He also has a full-time job at a publishing company based in Westport, Conn.)
 
Cassidy's next move: To buy domain names at premium prices and resell them.
 
In the near future, domain names are going to be expanded so that Web addresses can end in any combination, such as .baseball or .nyc. Domain names are governed by the non-profit Internet Corporation for Assigned Names and Numbers, (ICANN).
 
“There’s probably going to be a gold rush for all those new names,” Cassidy said.
 
As internet usage grows, domain names will continue to become more valuable, he said.
 
“I’m going to keep doing it until I can’t make any more money."
 
Looking for more ideas for starting your own business, check out this article.