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How To Really Profit from Domain Names

by: J. Stephen Pope

Have you heard about domain names that sold for over a
million dollars? Inspired by this, you imagine registering
a great domain name, hanging onto it for a while, and then
selling it off to become the next multi-millionaire. It
could happen, but don`t count on it!

First of all, many of the truly great domain names are
already taken. Second, the dot com bust took some of the
wind out of inflated domain name prices. (If you sell your
domain name for millions of dollars worth of stock in a
publicly traded dot com flop, what is the name really
worth?)

The cybersquatter buys domain names totally on speculation.
Sometimes he will register names of famous brands,
companies, or individuals. Time and again, these domain
name speculators learn the hard way that they must respect
intellectual property rights. They hope that some large
corporation will pay big bucks to them for the use of the
company`s own (already trademarked) name. Instead, they
end up with threatening letters from a law firm for their
attempts at extortion.

However, you can still make money from domain names if
you are sensible in your approach. Here are some
suggestions on ways to profit.

1. Affiliate Programs: Use your domain name to promote an
appropriate affiliate program. Either redirect to the
affiliate site or write a review that links to them.

2. Informational Sites: Create content and then profit
from it by earning advertising revenue through Google
AdSense or a similar program.

3. Redirect to Your Own Site: Some reasons you might want
to do this include preventing competitors from using a
particular domain name and benefiting from searches some
users perform by domain name. (For example, if they wanted
to order flowers, they might just type "flowers.com" in
their web browser. You could get some traffic and sales
this way.)

4. Product Sites: Create your own or sell someone else`s
product appropriate to your domain name.

5. Park Your Domain Names: You might feel that your name
has real potential for resale value. There are companies
that will allow you to park your domain on their servers,
advertise that your name is for sale, and split advertising
revenue with you.

The trick is to generate traffic for your domain name. That
traffic in turn will create revenue. Then, when you go to sell
your domain name, you will have a few things going for you.

First, you will have a fully developed website. A fully
constructed building on a piece of land increases
the value of the real estate property. Similarly, the
value of your domain name is enhanced by a complete and
operating website.

Second, you have traffic. Just as a shopping mall with no
traffic results in no sales, so a website must have traffic
to generate income.

Third, you have income. An income property, such as an
apartment building, can be appraised on the basis of its
income (as well as other factors). Similarly, the gross
income, net profits and cashflow of a website have value.
For example, if someone offered you $1,000 for your
domain name and website when it was generating $10,000 per
day in profits, you would likely laugh at him.

You really can profit from your domain name investments
by adding value and properly developing your web
properties.

About the author:
J. Stephen Pope, President of Pope Consulting Inc.,
has been helping
clients to earn maximum business profits for over
twenty-five years.

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