Domain name registrations seem to be a very hot topic at the moment, and I firmly believe that it stems from many prominent articles recently published in mainstream publications regarding domain names and the riches associated with their sales.

I also believe that a much of this buzz around domain names is unfounded, and leads a lot of people to believe that they will be able to quickly get rich off of domain prospecting. I would even go as far as saying that many of these articles create a false hope that people will be making BIG money off of domain acquisitions and sales. Although it’s very true that few people make BIG money off of domain name purchases (and when I say a few, I’m talking less than 100 people in the world), for the average domain name prospector big profits are rarely seen.

Why is this? Well, I believe it’s due to a lack of availability for quality domain names. We’re in 2006 right now, and the mature Internet we see today is far departure from the wild wild west of the Internet gold rush we experienced in the late 1990’s and early 21st century. While the Internet as a whole is once again beginning to experience a financial comeback, there are still lingering effects. Namely, most of the good domain names are taken!

I define a quality domain name as follows:

• The name has at most one or two words. Three shorter words are acceptable, but will not command the same prices as a domain name with only one or two words.
• The name contains keywords that are frequently searched for in major search engines (at least 5000 unique searches per month).
• The name is absent of special characters (-’s)
• The name ends in a .com (although I find .net a viable naming convention, it is still not as widely accepted by most Internet users. The fact is, 5 .com domain names exist for every 1 .net domain name).

How many of these domain names are available? Not many. Trust me, I have looked! While I’m not saying that it’s impossible to find relevant and lucrative domain names this late in the game, I will say that your chances of finding a quality, high dollar, domain name is highly unlikely.

For example, I followed my rules above and tried to obtain a top quality domain for one of my clients, Strategic Performance Group, a consulting company who offers a variety of business consulting services. I researched the amount of monthly keyword traffic associated with the services they offer (management consulting, market research, online surveys, etc.) and noticed that one of their services received an astronomical number of monthly keyword searches on the major search engines.

The term was Online Survey, and was responsible for nearly 165,000 searches on the Yahoo search engine during April of 2006. Keep in mind that at the moment, Yahoo only represents about 20% of the entire search market, meaning that this number only represents 1/5 of the total searches for Online Survey. Taking into account all search engine traffic, it’s realistic to infer that Online Survey was searched for nearly 825,000 times during the month of April!

Now that is some high quality traffic. Naturally I went through the proper steps to try and secure domain names associated with these keywords. First stop, onlinesurvey.com. This domain name was already registered to someone else (since 1997), but surprisingly, the website didn’t actually have a “real” web page associated with it. So, I checked the whois database entry on the subject, and found contact information on the owner of the domain name. I sent him a quick email, and waited for a response.

While waiting for a response, I decided to check out other versions of this same domain name. It appeared as if onlinesurveys.com was being used and contained a legitimate website. Next I tried online-survey.com as well as online-surveys.com. These aren’t as desirable as onlinesurvey.com, but they were worth investigating. I found out quickly that online-survey.com was not being used for a “real” web page. Once again, I checked the whois database, and this time I learned that the site had a private registration, leaving me no method for contacting them.

As for the owner of online-surveys.com, I was able to find their contact information in the whois database, but they did not reply to any messages that I sent.

I did, however, receive a response from the owner of onlinesurvey.com. He told me that he would sell me the domain name for $50,000, which was well out of the price range of Strategic Performance Group. While I do not doubt that this is a valuable domain name, I think a figure of $50,000 seems high.

This story may seem off topic from the original theme of this article, but I think it was necessary to paint a picture of the current domain name market. I tried to use a real life example to reinforce to you the concepts I laid out at the beginning of this post. For example, I mentioned that there are not many quality domain names available, and that the majority of quality domain names were obtained in the late 1990’s. That was certainly the case with onlinesurvey.com, as it was obtained in 1997.

While it may seem remarkable that this domain name is being offered for $50,000, it’s most likely that this domain name would not go for this price on an open market. Much like the real estate market, there is a significant difference between the “asking price” of a domain name, and the final sale price. In fact, this difference is much higher when it comes to domain names, and the final sale price is often a fraction of the original asking price.

Another thing to consider is that this domain name has been registered to the same person/entity since 1997. They have owned this domain name for almost 10 years, and have still not been able to sell the domain for their desired asking price! This certainly disproves the whole “get rich quick” mentality of many current domain prospectors. In addition, they have to pay fees for every year that they own the domain name. While these fees are minimal, they add to the opportunity cost of not selling the domain name.

While I’m not denying that domain name prospecting is a lucrative business, I am warning you that if you want to begin acquiring domain names you will need to have patience and be humble at first. Over the years, you may acquire some domain names that pay you thousands of dollars. However, the amount of money you make domain prospecting is not likely to be enough for you to quit your day job.