Domain Name speculation has become big business. According to recent study, the average domain name bought and sold by domain name speculators realized a 377% profit. In addition, the average domain name was sold in 12.5 months.

Domain name speculation involves finding domain names that appear valuable, and waiting with the domain in hopes that someone will want to purchase it in the future. With a great domain name like business.com, this can yield huge returns. Business.com was sold for over $7 million!

When domain name speculators buy a domain name, they generally put up a page indicating that the domain is for sale. This becomes a sort of free advertising, whereby someone interested in that domain name will naturally check out the site to see if it is a competitor, or if the domain can be purchased.

But selling the domain is not the only way domain name speculators make money. In addition to advertising that the page is for sale, most domain speculators park their domains with a domain parking service. These services store a simple website for free, and place content sensitive advertising on the parking pages. They share advertising revenue with the owner of the domain. In this way, domain name speculators get free website hosting for their domains, along with occasional advertising revenue.

There are important considerations that must be taken into account before embarking on a domain name speculation career. While it is always advisable to purchase any really high quality domain name available, actually making a stable income from domain name speculation can require significant resources. It will cost a considerable amount to purchase the domain names necessary to make a stable income, and it is certainly no get-rich-quick opportunity.

As a domain name speculator, you should carefully analyze the domain name registrars and communicate with them about bulk purchasing opportunities. A domain name speculator will be buying many – perhaps even hundreds – of domain names daily, and should therefore find the best discounts on domain names. Many registrars will allow for domain names to be purchased in bulk at substantial discounts. Taking advantage of these opportunities will likely be the difference between success and failure at this type of enterprise.

Deciding which domain names to purchase can be challenging. It is very difficult to find high quality .com names. But don't rule out country-specific extensions. As countries get their own extensions, a new world of high quality available domain names is opened up to speculators. New top level domains are being created all the time, and most recently a .jobs domain name was created. A name like computer.jobs could prove very valuable in the long term.

While a lot has been mentioned of purchasing names like Mcdonalads.com, this practice is not particularly productive. Trademark laws allow corporations with trademarked names to take domain names that violate their trademarks. So rather than getting a big paycheck for registering a company's trademarked name, you're likely to be served with a lawsuit demanding you forfeit the name to them.

Domain name speculation should be viewed for what it is: an investment opportunity. Like all investments, the returns will be predicated on the wisdom and decision making skills of the investor.

About the Author
Rex Ryan maintains a website sutdying domain names:

http://www.domainnamesnews.info