A few years ago, R & D Enterprises began registering domain names we believed might have some future value based solely on the domain name itself as ‘intellectual property’. In fact, there is a whole class of businesses and organizations that regularly engage in what is known as ‘domain name speculation’. Think of domain names as virtual properties and the Internet as the ‘Meta-Verse’ where the virtual properties exist. There are some domain names that do have rather large speculative values because the names themselves are ‘naturals’ (i.e. common words and concepts that people on the Internet might naturally enter in a search engine or in a web browser, such as, ‘dog.com’, ‘pet.net’ or ‘cat.com’).
There have been some financially rewarding successes for speculators on certain domain names. For example, the original registering group that sold ‘ecommerce.com’ supposedly received a seven figure price for the domain name alone. We believe the days of that kind of domain name speculation are over. Almost all three-letter and four-letter ‘natural’ names like ‘car.com’ have been registered and owned for a decade or more. There is also a dark side to domain name speculation. One cannot ‘cyber-squat’ on a domain name like ‘coca-cola.com’ where the intellectual property already exists and is a registered trade name or copyrighted material in other media. Extortion and piracy exist in cyber-space just like modern day Somalia based sea pirates raid the nearby coastal waters.
Effective use of ‘natural’ domain names involves monetizing them through the use of advertising. Advertising is the primary method for generating revenues on websites that do not directly sell a product or service through the website. Advertising pays for the content and is exactly the same revenue model employed by the ‘commercial’ broadcast TV industry. Effective use of ‘natural’ domain names goes beyond just providing a long list of paid advertisers. Once visitors to the website find what they are searching for, or worse, don’t find what they want, they may never return to that domain name. We maintain that some unique content, in addition to the paid advertisements, will guarantee some continued traffic to the domain name and keep the ad revenues flowing. Employing web-based publishing to develop unique content will make sure you have at least something to offer besides just a pure advertising medium.