Retirement Entrepreneurs Blog

Comments, rants and tips on baby boomer small business ideas
and working after retirement.

Author: Ingvar - Retiree In Training  

Working after retirement

Domain names are the real estate of the internet. Domain names with income is a hot commodity. Owning say 100 domains with income is like being the owner of an apartment building with 100 suites. The building (=domains) have an intrinsic value as do real estate and the income from the suites (=advertising/affiliate) adds to the value.

Let's take an example from my own portfolio. In Feb 2006 I hand-registered for $12. I set up a site explaining how to get an FBI background check done, and other related info.

The content I got and re-wrote from government sites (in the US government content is public record) and used Google AdSense as a monetizer method. Within a month or so revenue started to flow in. Not much, but it grew. On the average, this site brings in $100/month. (=rent income). So as a business, this single site grosses $1,200/year. The domain itself is appraised at $1,000. In the domain world, to buy domains with revenues you pay for the domain + anywhere from 4-10% of a year's worth of revenues. So this domain is now worth $1,000 + $1,200 x 5 = $6,000 = $7,000. Based on the average numbers. Sometimes these domains sell for much less because the income is incremental and not proven over time. It also depends on the quality of the domain name. In this case the income has been consistent for 5 years. In addition, there is room for further development.

All this compares with apartment buildings.

Why would you buy an existing domain with revenue instead of getting a new domain and developing it?

First of all - it is really difficult to find meaningful domains that have not been registered. Especially in the .com. Then to design and add content is work. And there is no guarantee the site will make any money. And it is getting harder and harder to get good search engine placement. So you are buying a proven revenue stream with potential. This is exactly why people buy existing business instead of starting from scratch. Or apartment buildings. Or condos to rent out. Same thing.

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