by Morgan Linton

Created on: May 20, 2009   Last Updated: May 27, 2009

Domaining is the word used to describe investing in Internet Domain Names. While this industry has been around for over ten years, it has become increasingly popular over the past few years. Domainers are individuals who derive income from domain names and oftentimes own large portfolios of domains.

There are a number of ways that people make money with domain names, however the most common method is through selling domain names for a profit. Domaining offers very high-return investment opportunities due to the low initial cost of

domain investment. Domain names can be purchased for as little as two dollars and can be sold for hundreds, thousands, or even millions of dollars.

One of the most complex concepts in Domaining is understanding domain name value. Domain names have different values to each investor, however there are some basic metrics that are used to gauge the value of a domain. The first element of domain name value is the TLD or Top-Level-Domain. This is the .com, .net, .org - essentially anything that comes after the dot. Since the inception of Domaining .com has been the most valuable domain followed by .net and .org which vary in value based on the keywords.

The next most important facet of domain value are the keywords used in a domain. One word domain names tend to have far more value than domains containing multiple words. Many one-word .com domains have sold for millions of dollars and one-word .net and .org domains can oftentimes yield sales in the tens or hundreds of thousands of dollars.

Recently more and more domainers have focused on the concept of monetization which is the process of generating revenue from a domain name. This process often involves the use of SEO or Search Engine Optimization to drive traffic to a given domain name. By writing SEO-optimized content a domain can receive a large number of monthly visitors. Using tools like Google Adsense and Affiliate programs domainers can then make money from the traffic their site receives.

Making a passive income with domain names is a great way for domain investors to generate income for their business along with increasing the value of their domains. Once a domain has a consistent monthly revenue its value can be greatly increased allowing investors to generate a higher sale price.

In 2009 more interest has been generated around ccTLD's or country-code TLD's. These are TLD's like .in, or .co.uk that are specific to a given country. As more people around the world become comfortable using the Internet more domaining markets are born. The Domaining industry has recently seen some very large .co.uk and .ca sales and these TLD's are continuing to draw more investors everyday.

As Domaining evolves it will likely rival that of the physical real estate market as more people move their businesses online and use the Internet as their primary information source.

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