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Canadian Domain Names For Sale | Buy .ca | Buy .ca domain names | .CA INVESTMENT

How can domain names be an investment?

You have basically two options to profit from domain names:

• You can what I mostly do, set up content websites on them with Google's AdSense as the revenue producer. Some domains will do well, pending on your skills in selecting the right keywords. In my portfolio, 80% generates 20% of the revenues. Even the lowest producers at least cover registration fees for the domains. They are all indexed by search engines. Then as the sites prove revenues, they become "mini-businesses" attractive to others who don't want to spend 12-18 months to get a site up to a proven producer. Like any other established business. Time + proven income = value.
   
• Some domain names lend themselves to a large website, a community, social networking, directory or otherwise a substantial website.
   
• You can park the domains and let the type-in traffic generate income. This is only profitable if you have domains that people type in to the address bar. Like cellphones.com. Very rarely will you make good money on a domain name that's not type-in because they are not indexed by search engines.

What's a good domain name?

Top names are one word names of things people buy or places. Like mortgage.com or canada.ca. Those names are worth hundreds of thousands and some millions of dollars. Because thousands of people type in these names.

The second tier are longer phrases, but still with words of things people buy or want. Like my InternetKeywords.ca. Setting up a keyword site with this domain will surely make the search engine indexes.

Then there are the non-phrase, catchy domain names that are easy to remember. Brandable. Like eBay. Or i-Bet.ca which is on sale here.

The value of domain names is very subjective. It depends on several factors:

• Is there natural traffic?
• Is the site in the top few pages of SEs for the keywords?
• Does the site make money?
• Is there potential future growth?

• Is the keyword a high-demand phrase?

And think about this: Say you own a company (or start one up) called ABC Consulting. The domain abcConsulting.com is all of a sudden worth quite a bit to you, but pretty well nothing to others. I have had a few of those situations come my way. Profitable so.

I have been in the internet business since it all started. I operate hundreds of small and medium websites with AdSense as the main revenue source in addition to helping clients create client-magnet websites that do well on search engines.

I own about 500 domain names, 110 .ca names. Up until recently I have sold very few domain names. For the simple reason that most of them had websites on them, or were parked and generating income. So why sell cash cows?

The formula I use is this: If a domain itself sells for more than 1.5 times annual revenues of a web site I will consider selling it to make room for new projects. I am more of a "setting up" guy than a maintainer. I will sell a revenue producing website for 1.7-2.5 times annual income pending on the growth potential and the intrinsic value of the domain name.

For a buyer of an income producing website it can be a good way to get started, or to grow the portfolio. Think about this: Say a website has been producing $2,500 per year for a solid two years. It is very likely it will continue to do so, and grow with a little work. So you buy it for 2x annual revenues = $5,000. The cost of running the website is say - 10% of revenues (hosting etc.) So your gross profit is then $2,250 per year, a 90% return on your investment.

Probably worth the risk. That's why good, established websites are actually selling for 2-5 times annual revenues.

I recently moved back to Canada from the US. I can say from experience that domain names is truly the real estate of the internet. You don't have to research a lot to realize what some of the top domains have sold for. Those are of course .COM names.

How about .CA domains?

In a recent conference talk in Vancouver Bill Barnes, VP of the Canadian internet research company ENQUIRO stated that Canada is 2-3 years behind in internet development. On the other hand, Canada is one of the highest internet users in the world. To date, (04/08) .CA registration has not reached 1,000,000. What an opportunity. In my humble opinion, .CA names are like the early condos in Vancouver after Expo 1986. And I am buying more .ca names.

I am listing some at AfterNic, but as you know - world domain buyers can't buy .ca domains unless they have some relationship with a Canadian firm. So the value on the international market is reduced. But on the Canadian market - more and more individuals and companies will be looking for keyword-rich, brandable domains for their businesses.

I guess I am like a real estate investor now. I have the knowledge to ferret out potential high-value .ca domains, I put a website on them to see how they do and then make them available to people who want to profit from the future. We both win.

In addition, there are - so far - few professionals in the Canadian domain name business. The market is growing, and wide open.

So yes, I think .CAs are a great investment. But as all investments, due diligence is needed. You need to understand where the value of a domain is. Type-in? Brandable? Memorable? Keyword rich for search engine indexing? Connected to a well known and search for entity?

Ingvar Grimsmo

Vancouver, BC
April 3, 2008