Domain Investing: The Process Explained – Step 1: Domain Acquisition

First I’d like to say “Thank You” for all of the great comments I received in response to my first post about Kaykaing.org. It is clear to me that there is an even bigger interest than I had imagined in this domain which has made me even more inspired to share the story of this domain with you! I hope this will help new domain investors understand the time and energy it takes to turn a domain name into a valuable investment. I’ve done this over 80 times now in the last two years and I’m excited to share one of my most exciting development projects with the world!

So what’s the first step in the Domain Investment process? Acquiring the domain of course!

When most people start-out in the Domain Investing world they usually hand-register hundreds of domains and think, “these are going to be worth a fortune!” The only problem is they don’t take the time to understand domain value and what makes a good investment. It would be like buying a bunch of land on a deserted island and thinking “everyone will want to live here!”

If you are hand-registering a .com, .net, or .org there is a good chance the domain is not worth any more than the reg fee you are paying – and in fact, many are worth less!

The first step in the domain investment process is picking a domain name with good investment potential. I oftentimes buy domain names from private sellers that contact my company directly or use expiry services to find high-quality expired names.

I spotted Kayaking.org in July of 2008 and it really was love at first sight. As with any investment – I did my research. Using the Google Adwords keyword tool I found-out that the keyword “kayaking” gets over 800,000 searches a month on Google. Then I looked at advertiser competition and saw that there is a very strong demand to advertise for this keyword.

You must go through this process at the very least when investing in a domain name. If you just blindly buy a domain name without knowing the market potential you may waste your development time on a low-potential domain name.

I took my research a step further and started searching for “kayaking” on Google and Yahoo, exploring the pages that were in the top spots. This research is important to help you better understand what competition you will have. Remember, as with any business (and a domain investment is its own business) you must know who your competitors are and what you can do to create more value.

So after analyzing the search traffic, advertiser interest, and competition I decided to bid on the domain. In the end I bought it for $1,433 which is a very competitive price given the name.

If you want to be a Domain Investor – you have to start treating each domain purchase as an investment. Buying a domain name that you think sounds catchy or that you hope someone will like is not good enough. You need to prove there is a market and then understand who your competition is.

In Step #2 I’ll explain the planning phase, which in this case took a bit over a year to complete!

{ 4 comments… add one }

  • Chris Robbins August 23, 2009, 2:33 pm

    Hey Morgan,

    Good stuff that new site!

    I’d be curious to know if with the google adwords keyword tool you used the broad search or the exact search because depending on which one you used the results have either gone way down from 800,000 to 135,000 (exact) or way up to 2,240,000 (broad).

    Which brings me to the next question: When dealing with a single word is it more accurate to use broad or exact?

    Reply
  • Jamie Parks August 23, 2009, 4:29 pm

    $1500 bucks for kayaking.org was an excellent investment. This is one of the few domains that I have encountered recently among domainer’s active development projects which really has the potential to become both a reputable and profitable web-portal.

    SOLID INVESTMENT.

    BTW, you misspelled “kayKAing” in your post.. the typo (in all TLD’s) is still available 🙂

    Reply
  • Sathees August 24, 2009, 3:19 am

    Also the Google trend is a factor I check with!

    Reply
  • theoretical August 24, 2009, 4:52 am

    For one word domains, “broad” and “phrase” are the same. For multi-word keywords, always check “phrase” as well as “exact”. Anyone who uses “exact” only and doesn’t take “phrase” seriously is missing out on potential value.

    Reply

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