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Are one third of all domain names owned by speculators?

The domain name market is often likened to the real estate market, and a significant share of all domain names out there have been bought by people hoping to later sell them on for a greater price than what they paid for them.

The question is, how many of today’s domain names are actually held by domain name speculators?

Verisign is the registry handling the .com and .net top level domains, and they recently released statistics that can help us shed some light on this question.

Analyzing .com and .net

By analyzing 87 million .com and .net domain names, Verisign found out that:

  • 10% have no website at all.
  • 22% have a one-page website.
  • 68% have a multiple-page website.

According to Verisign, one-page websites include under-construction, brochure-ware and parked pages (often filled with ads). Most of them are bound to be parked pages, though, and these are usually set up for domain names that have been bought by speculators.

It is also reasonable to assume that most of the 10% with no website have also been bought by domain name speculators.

This would mean that close to 32% of the .com and .net domain names have been bought by speculators.

In other words, of the 87 million .com and .net domain names that Verisign analyzed, close to 28 million are owned by speculators.

Mid-2008 there were 168 million domain names across all top level domains. If they have the same level of domain name speculation as .com and .net, close to 54 million domain names are owned by speculators.

Domain names and money

What we presented above is of course a simplified calculation, an estimate, but based on the numbers that Verisign provided it is reasonable to believe that close to one third of all domain names are owned by domain name speculators.

Anyone doubting that so-called “domaining” is big business should take a look at the list of this year’s top domain name sales over at DN Journal. There are a significant number of six and seven-figure domain name sales this year alone. And of course, if you don’t just look at 2008, the numbers get significantly higher.

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