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The Growing Role of the Domain Name Market

uying and selling domain names is big business. This year, 15 names used in Internet addresses have resold for at least six figures to companies and individuals hoping to tap into big audiences. On.com got 5,000. Macau.com fetched 0,000.

Sex.com went for a record million in cash and stock to adult-entertainment company Escom in January, according to industry-trade reports and sources with knowledge of the deal, who declined to be named because of the private nature of the sale.

As the figures attest, the sale of domain names is quickly becoming one of the most important markets of the information age as people become more and more willing to pay for popular domain names. There are many reasons why we have seen such high figures for what consumers put into their address bar, but it is highly dependent on the fact that key domain names pull in a lot more visitors than random ones. Thus, it is within this market where big money pays for big names.

Today the market is dominated by this foray between big, established, business and those who came to the Internet first. We see many transfers between companies as those who were able to get their names first, sell their URL's to big companies who have been slower to join the World Wide Web.

These transactions represent very big business, and are creating a very important market of their own. Sales of 5,851 domain names generated million in 2005, compared with the sale of 3,813 names for million in 2004, says market researcher Zetetic. And the pace is quickening: In the first three months of this year, 1,949 names have generated .2 million, says Domain Name Journal magazine.

"The domain name is 21st century real estate," says Warren Adelman, president of GoDaddy.com, the world's largest domain name registrar, with 12.9 million. "The economy is being increasingly driven by the Internet sector."
About the Author
Enrico Schaefer is the founding lawyer at the law firm Traverse Legal, PLC, a law firm specializing in web law. You can find out more about protecting your domain name, UDRP arbitrations and anti-cybersquatting laws at Traverse Legal's stolen domain name and cybersquatting blog and trademark infringement and domain name blog.