"Internet real estate"?The shortcut to "making wealth" that Forbes billionaires didn't tell you!

knowledge 11 Nov 2023 05:06:14 PM By:DN editor
Abstract:

Recently, United Nations Secretary-General António Guterres stated that half of the world's wealth belongs to 26 individuals, with the world's richest person, Jeff Bezos, having a fortune exceeding $100 billion. The combined wealth of these

Recently, United Nations Secretary-General António Guterres stated that half of the world's wealth belongs to 26 individuals, with the world's richest person, Jeff Bezos, having a fortune exceeding $100 billion. The combined wealth of these 26 individuals totals over $1.4 trillion. According to Forbes' 2020 Global Billionaires List, Chinese entrepreneurs such as Jack Ma, Ma Huateng, Xu Jiayin, and Ding Lei are also listed.

The reason these billionaires have amassed such immense wealth is largely due to their proactive actions and precise investment strategies. While securities, equity, and industrial investments are familiar investment methods for many, these tycoons are increasingly favoring an investment avenue that not only generates wealth rapidly but also has the potential for appreciation: domain name investment.

Jack Ma, for example, owns nearly two thousand domain names, including "Alibaba" (alibaba.com), "1688.com," "Taobao" (taobao.com), "Tianmao" (tianmao.com), and others. Ma Huateng holds domains such as QQ.com, Weixin.com ("WeChat"), and We.com ("WE Financial"). Due to the limited availability of domain name resources and the uniqueness of each domain, domains are considered intangible assets with distinctive utility and investment value.

Firstly, domain names have more practical application value compared to other investment products.

Unlike stocks, funds, and other investment products, domain names have real-world applications, making them akin to "real estate" in the internet industry. Whether it's building a PC website or a mature H5 mobile site, a domain name is a necessity for businesses.

For companies, a premium domain name can leave a lasting impression on users, enhance brand image, aid in brand promotion, and save on advertising costs. For instance, the well-known JD.com of JD.com Group was acquired for $30 million, and its use not only ingrained the JD.com brand in people's minds but also enabled more users to directly access the official website via the concise domain name, saving JD.com over a billion yuan in advertising expenses annually.

Moreover, although the scale of mobile internet has surpassed that of traditional PC usage, reliance on third-party platforms, apps, or search keywords introduces potential "instability factors." A domain name is the only internet entry point beyond the control of third-party platforms and search engines.

Secondly, domain names inherently possess value for preservation and investment.

Domain names, as a scarce and non-renewable resource, have become largely occupied since the first .com domain was established in 1985. For instance, there are only 676 two-letter .com domains globally, and just 100 two-digit .com domains worldwide. Rarity commands value, and as the number of high-quality domains available for circulation decreases, their market value naturally rises.

Today, domain names are crucial "resource battlegrounds" that major corporations cannot ignore. Businesses across industries increasingly recognize the importance of domain names and are willing to spend substantial sums acquiring premium domains. In just the first half of this year, there were high-value domain transactions like Perfect World's use of the multimillion-dollar domain 88.com, the $415,000 (approximately ¥2.93 million) sale of 151.com, and the $3,060,000 (approximately ¥21.62 million) transaction for Palace.com.

Domain names, as a virtual asset with intrinsic value, can be used to generate profits through projects or held as investments for appreciation.

For example, in 2014, NetEase acquired the double-spelled domain "考拉" (Kaola.com) for a seven-figure sum and used it to establish the online shopping platform "考拉海购" (Kaola Overseas Shopping). Last year, Alibaba acquired it for $2 billion. Aside from the project's inherent value, the domain itself contributed significantly to its appreciation.

Therefore, the fundamental value of domain names increases with the development of the application market. With a user base and extensive application prospects, domain names exhibit strong potential for value appreciation in the investment sector.

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