The Future of Short Domains

Reading up on SS.com which according to several sources has recently sold for a whopping $1.25 million, we see what it takes to truly be successful in the domain market today. The seller (who goes by the username Oxigy on Namepros and tm3500 on DNF) has been the owner of this LL.com since 2004. He didn’t get it in the “early days”, nor did he get it for cheap (reportedly paying somewhere around $40,000 according to ZestyDomains.com ). But the one smart thing the seller did in this case was to hold it for several years until he was satisfied with the ROI yielded.

So why am I talking about LL.coms on an LLLL.com blog? Granted most of us plan on “selling out” at some point, looking at examples like SS.com may help us realize the future potential each and every short domain (in a half decent tld/cctld) has and how we can maximize our ROI while still exiting when the kids/wife/finances demand that we do so. SS.com proves to be a textbook example of why selling out too early can be very costly. Endusers aside, SS.com is a 500k+ domain anyday of the week on DNF, so it’s clear in this case that the seller who sold out at $40k sold his domain considerably short of what it would go on to achieve. Could you live with making a mistake like that? Maybe it wouldn’t be a mistake at all, provided you reinvested that money intelligently in the domain name market… 10k worth of quad premium LLLL.coms in 2004 (budgeting the 40k for the 4 years of renewals needed to bring them into today) bought at regfee would easily be worth 500k+ today as well… Clearly SS.com is not unique in this regard, rather it goes on to show how much short dotcoms as a whole have appreciated since 2004. Whether you picked LL.coms, LLL.coms, or LLLL.coms, a 40k investment back in 2004 should be worth a minimum of $500k today, provided you bought at the going rates back then.

What does this mean for the future of LLLL.coms? If past performance is any indicator of future performance, we can say that the future looks very bright. Even if it is not, growing demand and acceptance in the domain name marketplace suggests that short domains will be going nowhere but up in the long run. Most domain segments have had their ups and downs over the years — we could say that the domain industry as a whole took a dump back during the Dotcom Bust. Interpolating this data, one may be left with the impression that we may be heading towards another bust soon enough (some say that it has indeed already begun).

What matters in the end is not what your domain is worth on any particular day, but rather what your domain is worth on the day you wish to sell it. If you have no plans of selling your short domains for 5+ years, why even bother following the price trends (hopefully I don’t kill my blog’s readership suggesting that!)? If anything, a few hiccups along the way may make you make a hasty decision you’ll later come to regret. One of the most important things to do while domaining is to put a price in your head — and don’t change it unless circumstances drastically change. What would you need to consider selling your LLLL.coms? For me, I wanted $50k cash profit. Once it was evident that I could easily make such a profit by reselling my LLLL.coms, I almost immediately started unloading them on the market. We all have different goals and I’m pretty sure if you asked 100 LLL.com domainers what they expected to realize on their LLLL.coms that you’d get back 100 different answers. It’s great that the LLLL.com marketplace is so diverse and full of people with different levels of risk tolerance, understanding, and ambition — it eases the difficulty in selling during the tougher times (eg. now) when conservative domainers may be less interested in investing and more interested in liquidating their holdings — and while some people liquidate their holdings, others wish to embark on that boat they forgot to board circa November 2007.

So, what will it be for you? Total financial freedom? $1 million? A paid off mortgage and being entirely debt free? We all have different goals.. I’ve always wanted to dabble in the futures market with money I could afford to lose and now have the ability to put my skill to the test! Funding for BQB is also being provided exclusively from profits on LLLL.com sales, so I really can’t complain!

The Future of Short Domains

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~ by Reece on March 18, 2008.

7 Responses to “The Future of Short Domains”

  1. The futures market…
    Try Forex or CFD’s Reece. 🙂

    **Great posts again**

    ATM I’m already renewing my September Expiry LLLL’s (net’s and com’s) as I wanna be on the safe side when renewals hit me.

  2. The growth in cheap domain names is being fueled by small businesses such as an independent local grocer or dry cleaner that, by effectively establishing a presence on the Internet today.

  3. A bit different from my $9.95 domain………..
    Where have I gone wrong?

    Great blog by the way.

    Cheers.

  4. Thanks Suzanne + Bruno 🙂

    LLLL.coms were one of the first times I got it 100% right — investing the right amount of money (everything I could afford to at the time), investing it at the right time (just before buyout, so I never needed to renew anything prior to selling), and choosing to sell when it was right for me.

    It’s alot harder to do than it sounds and the sheer fact that 99% of domainers haven’t made millions domaining is testament to how hard it is to consistently be ahead of the masses.

  5. I am with all of you as mentioned above. I am renewing my LLLL dot coms now (when I have some extra $) so that I can buy more when time comes (if such the prices go down in the fall). Great post again. My goal is to pay off my mortgage with LLLL dot com. I am not making another mistake with domains (uhhh I wish I registered LLL dot coms). Cheers.

  6. It is true what you said, but the SS.com deal did not went through. It was just a scam offer in order to make some free publicity.

    However good points,

    Alex

  7. Thanks for the info Alex.

    Unfortunate as it may be, I’m sure we haven’t seen the last of SS.com.

    If I were the owner, I’d seriously be considering a lawsuit right about now…

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