Analysis: Pot of Gold at the End of the Rainbow?

The best days for Domain Names may be yet to come. It seems apparent that the market is less active than many Domain Name brokers might like it to be. A few high-profile sales are being held up as proof that Domain Names are flying off the "virtual shelves." Yet for every name that is sold, a hundred more are put up for sale.

There are several rays of light at the end of this tunnel.

Firstly, the decision to expand the number of top domains has been postponed by a minimum of one month, pushing back any real changes until well into the first quarter of next year.

Secondly, the rate at which revenue is being generated online is increasing. The rate at which new sites are coming on line is slowing, but the USES to which these sites are being put are changing. This time last year, most major companies had an online version of their product catalogue at best, or at worst a plan "to get onto the Internet soon." Now, practically every company has a web presence. You can buy and sell goods over the 'Net, apply for credit cards, order pizza, check the closing price for your favourite stocks, and any one of a hundred other applications.

This change can only be beneficial to domain name owners. As the number of companies producing significant revenue from the Internet increases, the demand for "household name" domain names will increase.

I would suggest that you treat a domain name as a longer-term investment. A year on the Internet is equivalent to 20 in the real world, so within a couple of years the whole shape of the Internet will have changed. Buy your domain name now, list it with brokers, but don't be surprised if it doesn't sell. Remember that as long as you maintain it, at $50 a year, it remains your property.

The wave of demand will come; it is now out to sea, slowly approaching the coastline. When it crests at last, where will you be? Riding the wave all the way to the bank, or on the outside looking in, kicking yourself for having missed a truly golden opportunity?