Domain Names - A Market of Great and Growing Importance

By Enrico Schaefer

Buying and selling domain names is big business. The nature of the birth of the internet is one of the great reasons why domain names have become so important, and have garnered so much monetary attention.

This year, 15 names used in Internet addresses have resold for at least six figures to companies and individuals hoping to tap into big audiences. On.com got $635,000. Macau.com fetched $550,000.

Sex.com went for a record $12 million in cash and stock to adult-entertainment company Escom in January, according to industry-trade reports and sources with knowledge of the deal, who declined to be named because of the private nature of the sale.

As the internet began to grow and become more and more important, more and more normal entrepreneurs realized the potential of this new tool. However, many of these businessmen and women logged on to find their trademarked phrases and titles already used by other users with different intentions. Under these pretenses, the market for domain names was born.

Today the market is dominated by this foray between big, established, business and those who came to the Internet first. We see many transfers between companies as those who were able to get their names first, sell their URL's to big companies who have been slower to join the World Wide Web.

These transactions represent very big business, and are creating a very important market of their own. Sales of 5,851 domain names generated $29 million in 2005, compared with the sale of 3,813 names for $15 million in 2004, says market researcher Zetetic. And the pace is quickening: In the first three months of this year, 1,949 names have generated $14.2 million, says Domain Name Journal magazine.

"The domain name is 21st century real estate," says Warren Adelman, president of GoDaddy.com, the world's largest domain name registrar, with 12.9 million. "The economy is being increasingly driven by the Internet sector."

Enrico Schaefer is the founding attorney of Traverse Legal, PLC, a law firm specializing in web law. You can find out more about protecting your domain name, UDRP arbitrations and anti-cybersquatting laws at tcattorney.typepad.com/domainnamedispute.

 

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