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Competition Remains Hot for Web Domain Names

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Competition Remains Hot for Web Domain Names


Competition Remains Hot for Web Domain Names

Competition Remains Hot for Web Domain Names

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  • <iframe src="" width="100%" height="290" frameborder="0" scrolling="no" title="NPR embedded audio player">
  • Transcript

Though the economy may be in decline, the market for Web site domain names is on the rise. Last month, the name sold for $300,000. What sells, why and who is buying them?


Making millions on real estate these days is tough unless your property is virtual. Web sites with names like and recently fetched quite a bit at auction. Many of the most marketable names have already been claimed, but there are a few gems left and plenty of people who want them.

NPR's Yuki Noguchi reports.

(Soundbite of applause)

Unidentified Man #1: I'm at 150,000? Now 175, 150, now 175.

YUKI NOGUCHI: At a live auction last week, there was a bidding war for, and the winner was Andy Booth. He took home the prize by paying $33,500.

Mr. ANDY BOOTH: Women have a tendency to spend an awful lot of money, usually on the Internet. So I thought it was a perfect opportunity.

NOGUCHI: An opportunity to sell ads targeted at horoscope watchers, or Booth could flip it to someone else willing to pay more for it.

Mr. BOOTH: I expect that I'll find some way to find a higher paying bidder. That's what it's about generally in this market.

NOGUCHI: Web properties are appreciating. The reason: more companies realize there's advertising potential. Plus a diminishing pool of good names drives prices up.

Mr. JEREMIAH JOHNSTON ( We like to think of domains as virtual real estate. And like real estate there's a scarcity to domains. So the fact that there are only so many available words out there to turn into domains, that brings a value to each of these properties.

NOGUCHI: That's Jeremiah Johnston, an executive with Sato holds online auctions where buyers bid on Web names. It recently sold for $3 million. He said there could be a bigger run-up in price despite an overall economic slowdown. Web traffic is still growing, and the more people use the Web, the more advertising dollars there are to collect.

Take Rich Schwartz. He doesn't do much with the 6,000 sites he owns. On most of his sites he simply posts links to other companies and collects millions in advertising by redirecting traffic to those places.

Mr. RICH SCHWARTZ: I don't have a candy store. I don't want a candy store. But guess what? Fifteen hundred people a day come to Do you know any store in the world that has 1,500 people lined up every single day of the year?

NOGUCHI: OK. That sounds easy as pie. But back when Schwartz bought some big names like, few others were doing what he did.

Mr. SCHWARTZ: In 1997, when I bought, it cost me $42,000. I call it the shot that was heard around the world. Absolutely nobody could believe that anybody could be stupid enough to spend that kind of money on a domain name.

NOGUCHI: Since then he's sold six sites - for $1.3 million. He bought for $100 and then sold it to CNN for three quarters of a million dollars.

Fat profits like that are harder to come by these days. The premium dotcom domains are mostly taken, so entrepreneurs look to other frontiers, like sites that end in dot de for German sites, dot cn for Chinese sites, or dot mobi for mobile sites.

Plenty of people try to make money by registering misspellings of popular brands. Just try typing, but with a typo. That'll pull up links to electronics and appliance sites, which make money for the fake sites owner. This is called domain squatting. And the international body that governs Internet registries doesn't look kindly on it.

But once in a while, someone registers a name that later becomes popular. Jeremiah Johnston.

Mr. JOHNSTON: was a domain that was registered by a gentleman in England who got the domain before the company MySpace even existed.

NOGUCHI: And despite various legal challenges, the domain is in the hands of the original owner. These days, great names can be a sign of the times.

Unidentified Man #1:

(Soundbite of applause)

Unidentified Man #2: These are great names, folks. Three hundred thousand three and a quarter. Go three and a quarter. Go three and a quarter. Go three and a quarter. I'm a 300,000. Bid once, twice, third and final call. I'm going to close the bidding at 300,000.

NOGUCHI: Yuki Noguchi, NPR News, Washington.

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