Monday, May 30, 2011

co.za domain names valued over R1 million

.co.za domain names are big business, and some people are willing to spend lots of cash to get a prominent South African website address!

The first commercial Internet domain name (.com) was registered in March 1985, and initially very few people saw value in owning their own domain name. By 1992 less than 15,000 ‘.com’ domains were registered.

This changed when the Internet began to make headlines, and people soon realized that a prominent domain name may one day be valuable.

Sex.com is a good example. When Match.com founder Gary Kremen registered sex.com in May 1994 it cost him very little – but the popular domain was recently sold for US$13 million by Escom. Escom reportedly bought the domain name for US$14 million in 2006.

Local .co.za domain names
While not as prominent as ‘.com’ domains, trading in ‘co.za’ domain names is also big business.
One of the biggest players in the ‘co.za’ domain name market is Durni Companies, headed up by founder Gavin Durni.

Durni expects a strong demand for domain names in South Africa in the future. “The annual growth of broadband penetration, the domain renewal price of R50 annually, and a boom in e-commerce in South Africa are the main drivers for demand.”

“According to Uniforum there are approximately 645,000 ‘co.za’ domains currently registered. Domain name registration is a leading indicator in terms of internet economy growth of a registry. These are all very attractive factors when it comes to domain development and acquisition; it is actually becoming very difficult to buy premium domains for good prices which is a direct indication of supply and demand,” said Durni.

“This has also attracted many speculators to the market, as well as international venture capital money to start up internet businesses in South Africa.”

Making money from domain names
Durni explained that domain name trading and domain name parking can be a lucrative business if you know what you are doing. “We find generic keyword ‘co.za’ domain names through registration and acquisition. These domain names are valuable, as generic keywords are very powerful when it comes to branding and SEO,” said Durni.
Making money from domain names
 “Most domain research and selection is based on keyword research and keyword value, which is based on factors such as local search volume and the industry the keyword or domain name pertains to.” Durni said that they monetize their domain names by selling advertising on them as well as developing them into websites and partnering with others to create businesses.

“The real value being the SEO and the ability to rank quickly in search engine rankings to reduce pay-per-click and other online advertising budgets,” said Durni. “Once websites have been developed, we either continue to run these as businesses or sell them off.”

Prices paid for ‘co.za’ domain names
Durni said that he “knows for a fact” that there have been domain name sales in the co.za space for over US$200,000 (±R1.4million) per domain, adding that many of the sales are not public (many people want to keep sales private).

“One published sale of mine was Fly.co.za for US$65,000 (±R458,000). Another is Furniture.co.za for US$33,000 (±R233,000), sold to a local company in SA – thissideup.co.za,” said Durni.
He added that in 2010 alone there were over US$1,000,000 (±R7 million) in ‘co.za’ domain sales, and 2011 is on track to exceed this figure.

Advice from an expert
Durni advised companies and new start-ups to select a good domain name: “Having a very specific search term pertaining to your business is essential to SEO, which leads to more traffic, more leads, more sales, and thus more business.”“If you cannot register a domain name, do your research and don’t be afraid to go out and acquire a domain name,” said Durni.

He added that one should also be sure to own their company name domain, as cyber squatters are always on the lookout for newly trademarked names that they can register.

“Domain squatters or cyber squatters are really looked down upon and we are completely in favour of intellectual property rights,” explained Durni. Durni added that domain squatters look to register trademarks or other domains with the intention of holding them hostage, and then contacting companies or individuals to try sell the domain names.

“Proactively, we take it into our own hands to fight against these squatters and when possible give domain names that would normally be squatted upon to the rightful owners,” Durni concluded.

Article source mybroadband.co.za