Analysis of domain name investment skills and domain name market

Over the past two decades, one of the most lucrative investment opportunities has been domain names. Unlike other investment options such as stocks, gold, real estate, and jewelry, which tend to follow economic trends over ten years, domain name investments have shown a consistent upward trajectory. Domain names serve as the identity and face of websites, and their scarcity, global uniqueness, practicality, and investment potential have made them a cornerstone of the rapidly developing internet, ensuring their continued success.

The history of domain names dates back to 1985 when registrations began, and people started investing and trading them in the 1990s. Initially, the annual fee for registering a domain name was about 50 RMB (Chinese Yuan). However, premium domain names have been valued at tens of millions or more. Domain magnate Cai Wensheng himself has stated that domain names have brought him the greatest achievements and the most substantial earnings. He even mentioned that if he hadn't sold some of his domain names, he could have been as rich as a country today.

In the past, domain name investments primarily focused on four major types: short numbers, single-letter, double-letter, and short consonants. In the current market, double-letter domain names with good quality are considered to have the most investment value due to their practicality and cost-effectiveness. Let's delve into domain name investment techniques and market analysis.

1. Domain Name Investment Techniques

Domain Name Selection Principles:

Easy to remember, short, has a market, meaningful, and not prone to spelling mistakes. High-quality domain names leave a lasting impression, such as 58.com, which is likely to give users a good impression and is more conducive to brand promotion. Shorter domain names are generally better, and having a market indicates that the domain name's meaning has commercial value or is easily acquired by large companies. The domain name's meaning should be positive, timeless, forward-looking, and in Pinyin domain names, try to avoid sounds that are easily mistaken, such as "in/ing" or "en/eng."

Choice of Domain Name Extension:

Preferably .COM, followed by .CN, and then other non-mainstream extensions. .COM domain names have the highest value, with .cn domains typically worth only about 10% of a .com domain with the same name. Other extensions have even lower values, so higher quality is required for non-mainstream extension domain names to have any value.

Available Domain Names:

Currently, there are not many newly available domain names. Popular extensions like four-letter, 5-number, and 6-number domains have long been registered. For .COM, only low-quality 7-number and 8-number domain names are available for registration. Double-letter domains are also mostly taken, and even three-letter domains are scarce.

2. Domain Name Market Analysis

Short Numeric Domain Names:

Four-number .COM domain names had relatively low value in previous years, but in the past two years, their prices have skyrocketed. High-quality ones can sell for over a million, and a recent example includes Chinese investors acquiring 8181.com for 1.43 million. Three-number .COM domains with good quality can sell for tens of millions, and even those with average quality can fetch several million. The prices have surged nearly 20 times in the past two years, possibly reaching their peak.

Single-Letter Domain Names:

Single-letter domain names range from two to five characters in length, and their value depends on their meaning and length. High-quality single-letter domain names are extremely valuable and could easily be worth tens of millions. Recent sales include wang.com and mei.com, which sold for over 10 million each, and che.com and mi.com, which sold for over 20 million. Those with average quality are valued in the millions, with an overall increase of about 30 times in the past two years.

Double-Letter Domain Names:

Double-letter domain names are widely recognized and used in the market, enjoying acceptance from major internet companies like Baidu, Taobao, and Alibaba. However, their value has lagged behind numeric and short-letter domains in the past two years. While four-number .COM domains have been skyrocketing, double-letter domain names have remained relatively quiet. Nevertheless, they might experience a resurgence, with potential for an 8-fold increase in value in the near future.

Short Consonant Domain Names:

Short consonant domain names, like three-letter ones, have seen a significant increase in value in recent years. While they were not highly regarded two years ago, good-quality four-consonant domains are now valued at around 20,000, with exceptional ones worth even more. This represents a 20-fold increase in less than a year.

Domain name investments continue to thrive, with the market consistently on the rise. Both domestic and international domain name trading platforms are well-established. In a traditional investment landscape with poor returns, domain names, a relatively niche investment, have captured public attention. Reportedly, residents of Wenzhou, China, have started investing heavily in domain names. Premium domain names are in high demand, and everyone seems to have valuable assets, making domain investments increasingly prominent. The phrase in the industry is, "Hold domain names to maintain your wealth, invest in stocks to deplete it." After a successful 20-year journey, domain name investments are likely to have a long and prosperous future.