Domaining.org.uk

So folks, it looks like the next stage of the internet domain names gold rush will be the registration of currently unregistered four letter .net domain names.

It appears that around 50% have been registered so far and I must admit I am tempted to add to my modest holding. I have to say that even though four letter .nets are a longer term hold I am actively looking for any decent unregistered domains.

The hottest topics on the domain name discussions forums concern 3 and four letter domain names and the hype surrounding 4 letter .nets gets ever more frenetic.

The forum Namepros.com now has a short domain name section covering domains shorter than 5 characters such as “LLL, LLLL, L-L-L, 2c, 3c, acronyms, etc”. The LLLL.net countdown thread can be found here  and a more sober appraisal of the market for LLLL.nets is being discussed on DomainState.com, here.

There are also a number of bloggers reporting on the LLLL market, such as GFNB.net, the LLLL.net countdown website and QuadLetterDomains.com . Also worth having a look at 4letternoob’s blog.

If you want to find out more about LLLL.nets you may find this article from DailyDomainer.com is worth reading .

People who missed the LLL.com, L-L-L.com and LLLL.com gold-rushes want to get on the bandwagon. So do those who did well out of previous goldrushes and who want to repeat the experience with LLLL.nets.

However, not all domainers feel that way and a fairly large note of caution is required here. The demand for LLLL.net domains is different to that for LLLL.coms. If someone is looking for a four letter .com domain for their business, an alternative for that person may not be the same domain in a .net. What I mean is that a business called UKGB, which wants to buy UKGB.com but cannot because it is too expensive or in use already, may not see UKGB.net as a preferred alternative. For example, they may feel that a dot com is more memorable for their target market and if they use UKGB.net they are sending traffic to the dot com version. For them the preferred alternative may be ‘UKGBClothes.com’ or ‘UKGBProperty.com’ or whatever, depending on their business.

As I have said before I think LLLL.nets do have a market and news of some profitable sales to end users have been encouraging. The lure of a short memorable 4 letter domain in any extension will be too strong for some end users and so LLLL.nets will sell. However, in my opinion, in general, they need to be considered as longer term holds rather than a way to make quick money.

I think we should expect to see a modest increase in values as soon as the last LLLL.nets are gone. But when might we expect decent returns? Might we be looking at 6 – 12 months before the last ones are gone? After that there could be years of only modest price appreciation. Also, bear in mind that .nets have sold for 20% - 40% of the equivalent .com.

So this is a long term investment and in my opinion only jump aboard if you are prepared to invest five or more registration fees for each name held, over the next five years before having even a chance of satisfactory returns.

So what do you think? When will the last .nets available to register run out? Are they going to appreciate rapidly, modestly or not at all? Are you jumping aboard or not? Tell us why.
 

Most domainers probably have one or more forum domain names in their portfolios.  (Forum domains are simply domain names which are made up of a keyword followed by the word ’forum’ such as ‘DomainingForum’, ‘FishingForum’ and ‘WebmasterForum’.)

While this article is aimed at more novice domainers it will be useful to experienced domainers who have little knowledge of this niche. I decided to write this article after researching the revenue potential of forums.

In this article, I provide some background information about how forums are developed and monetized and I think this will be of interest to domainers who need to buy or sell forum domains. Armed with information in this article domainers may be better placed to negotiate effectively with end users when selling forum domain names. Domainers will be better placed to negotiate down sellers who ask unrealisticly high prices for their forum domain names, while being better able to justify the asking prices for their own forum domain names. It also provides a brief introduction to forum development and will be of interest to domainers looking at the opportunities in developing forum domains.

Forum domain names ought to be big money makers! This is because:-

• forum software is free,
• website content is developed by site visitors,
• over time this content will be of considerable volume,
• the content is regularly updated which is a benefit in terms of search engine optimisation,
• there are many potential revenue streams such as Adsense and many others

The reality is very different but the reasons why are more complex than you might think.

Revenue: Forum owners argue that because their visitors are interested in the forum, and interacting with other forum members, smaller proportions of visitors click on the forum’s ads than visitors to other types of sites. This means that forum earnings are generally modest, as discussed here and here, for example. The reasons why this might be the case are discussed in this post from the Admin Zone Forum.

Forum owners resort to advertising to cover running costs and many are content with making a modest surplus out of thier forum. Some even return this surplus to members of their forum in the form of competition prizes and incentives.

Additionally, the amount of revenue generated by a forum is influenced by the forums discussion topics. Where the site is monetized by Adsense there is a wide divergence between the sums earned from high paying and low paying clicks on ads - business / finance ads produce more revenue per click than pets. 

A small number of forum owners offer premium memberships. These can generate significant revenues but are generally only viable on larger, more popular discussion forums. 

For domainers, the most important thing to bear in mind is that forums are cheap to set up but frequently only start to make significant revenue when they are popular and this can take a significant period of time (perhaps up to a year or more).

Costs: Forum software such as phpbb and SMF are perhaps two of  the best known free forum software packages. vBulletin is another popular forum software package, although it is not free. Altogether, I would guess that the vast majority of discussion forums are developed using one of these three packages.

Forums also require a hosting package that supports the php programming language and a MySQL database. Hosting packages that provide these facilities are likely to be slightly more expensive than those that don’t and larger forums may be very intensive users of server resources, which may also incur extra costs. 

Content:  Google loves regularly updated site content, and the pages of content produced by site visitors is a great benefit. However, early on in the life of a forum there is unlikely to be much content and in the ’start up’ phase of developement most significant content is frequently produced by the forum owner.  

It takes time, energy and luck before forums reach the size that allow the site owner to take a step back from intensively producing content.

Motivation: Generally, forum developers do not establish forums with profit in mind. Forum developers have a passion for their subject and work hard to set up communities that form around their chosen topic.   By setting up a forum, forum owners have made a comittment to work on their forum site for weeks, months and years. Obviously the domain name they chose is vitally important to them and this will help determine the selling price of forum domains. It is also worth saying that developers release value from their forums by selling their developed forums on the open market, although determining a forum’s market value may be a problem. Forum owner and expert on forum development, Martin Reed, discusses today how much forums are worth on his forum owner’s blog CommunitySpark .com .

Forum domain valuations: Forum domains rarely earn the fantastic sales prices reached by generic and some brandable domains. However, forum domain names are marketable, are frequently sought after and can sell for a good profit. (Especially if bought at registration fee). Notable forum domain name sales include Forums.co.uk in 2006 for £5,000 (around $10,000) and more recently SportForum.com for just over £2,600 ($5,300) and  CarInsuranceForum.org for around £1,200 ($2,400).

Forum, chat and talk domain names: In my opinion, [keyword] + ‘forum’ is preferable to [keyword] + ‘forums’, but not everyone agrees. Hypenated forum domains are generally unlikely to be worth much. Domainers should expect [generic keyword] + forum(s) + .com domain names to be most sought after of all. Domainers need to know that while ‘forum’/ ‘forums’ is preferred, the words ‘chat’ and ‘talk’ are often acceptable alternatives to the words forum or forums such as in ‘cardschat.com’ and ‘webhostingtalk.com’. 

Conclusions

In conclsion, I think there will be demand for forum domains for as long as there are people developing forums. The best forum domains are probably worth holding on to for the long term until you find the right end user. In the meantime develop it as a forum, if you can, or set up a minisite to off-set hosting costs.