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Domain Name Madness

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Mar 3, 2004 11:00 AM PST    Text size: 
SILICON VALLEY – The Internet's most valuable asset, its domain names, are fetching record amounts of money, especially the ones that are tied to brand names and can more succinctly summarize business names and business sectors, the New York Times reports.

The resale value for popular and desirable web addresses pertaining to some of the more thriving Internet industries, like porn, food, retail, and dating, have recently emerged from a three year lull.

Addresses like Beef.com, Men.com, and porn site Whitehouse.com have been the subject of ferocious bidding wars among entrepreneurs who fully realize the enormous moneymaking potential of familiar URLs with established commercial value.

According to VeriSign, the resale market for domain names has more than doubled in recent months from previous years. A typical resale price for a domain is ringing in at around $24,000, whereas a collection of popular domains recently sold for as much as $100,000 each.

Smoking.com sold for $500,000 last week, Mr.com for $350,000, and Americans.com for $150,000, the New York Times reports. And the owner of Car.com paid a reported seven figures for his domain last year in a deal that today would be nearly double in value, experts say.

According to VeriSign, website are renewing their domain suffixes at record levels. Statistics show that 70 percent of VeriSign customers renewed their domain names in the fourth quarter of 2003, whereas only 45 percent renewed in the first quarter of the same year.

Whitehouse.com, which went on the sale block on Feb. 10, has since soared into the million-dollar range after the owner of the domain decided to put it up for sale after seven years in the porn business. The website has had bids for as high as $2 million, according to reports.

The Whitehouse.com domain was often in the eye of controversy for so closely resembling the official White House website (whitehouse.gov), and over the years it has reportedly caused the U.S Government a great deal of grief.

Exponential growth in the domain industry is partly due to an upsurge in the economy and an increased diversity in the ways that webmasters can make money. Some industry analysts attribute the demand for high-priced domain names to search engines like Google and Yahoo that can increase traffic by huge margins when the domain names are simple and succinct and represent a search category, like Sex.com.

Additionally, smaller website owners can generate more revenue by placing Google's small text ads on their sites.

As for the owner of WhiteHouse.com, who also owns real estate site House.com, there has been no official word whether the White House is interested in buying his domain name, and until then, the sky is the limit in the bidding wars.

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