What is domain investing?

This video provides an overview of what domain investing is and a few tips for getting started.

Video transcript

Wondering what domain investing is? Here’s an overview to get you started.

Like all types of investing… in commodities, the stock market, art, real estate and so on… domain investing involves buying something, in this case a domain name, with the goal of eventually selling it for a profit.

But let’s take a step back for a few seconds. To understand domain investing you must first be clear about what a domain name is and isn’t.

It is NOT a website or an email account. Instead, it a numerical address turned into user-friendly text that is used to identify a resource on the Internet, such as a website, an email account, a hosting server, and the like.

Domain names are assigned to Internet resources for the same purpose street addresses are assigned to houses, office buildings, and other real estate - so they can be found.

Domain names must conform to the rules of, and be registered in, the Domain Name System, or DNS.

Every registered domain name is owned by a person or entity of some kind, such as a company, organization, or government. It is possible for registered domain names to exist but not be associated with any Internet resource.

This is where domain investing comes in.

When domain names are not in use, their owners have the option of selling them in what is called the “domain aftermarket.”

Domain investors purchase them with the hope they will gain value over time.

Some domain investors also search for entirely new domains.

When they find an available name they think will gain in value, they register it and hold on to it until they feel they can sell if for a profit.

The prices of aftermarket domain names vary widely.

Determining the market value of a domain name is a complex process, similar to determining the market value of a piece of real estate.

In general, short, memorable, easy-to-spell names that end in .com tend to be the most valuable.

There are many ways to purchase domain names - from creating a brand new domain name and registering it, to bidding on existing names in aftermarket auctions.

Before you dive in to domain investing, wade around in a few good online resources. There’s a lot to know.

Check out GoDaddy.com/domains, NamePros.com and YouTube, just to name a few.

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