Month: March 2016

10 Most Common Mistakes New Domain Buyers Make

Everyone has to start somewhere when it comes to investing in domains. Sites like namepros is a great resource for beginners and experts alike. Before you decide to buy a domain, you should look at some of the common mistakes beginners make before purchasing your first domain.

Not all premium domains are premium – The word premium is used a lot in domain auction/selling sites. While they call all these domains premium, only a small amount of domain names are premium.
Valuation tools – Tools like Estibot are a great resource in getting an idea on what a domain name could be worth. While Estibot is a great tool when it comes to valuation, do not expect it to give you the exact value of a domain. There are many factors in why a domain might be worth more or less that an algorithm will not be able to calculate.
Trying to sell a domain when it is registrar locked – New domain buyers might not be aware that editing the registrant information will locked their domain for 60 days. This system was put in place to help prevent a hijacking of the domain. In the event that it is hijacked, the registrar will be able to retrieve the domain.
Do some research before buying a domain – There are a lot of tools out there that can be use to find information about the domain you plan to buy. You might want to use some SEO tools to help you evaluate the value of the domain.
Do not hide your Whois if you are planning to sell the domain – If you are planning to sell a domain, it might is better to leave your whois information unhidden. When your whois is unhidden, it will allow a potential buyer to see your contact information and possibly negotiate a sale.
The hype of new TLDs – There is always a lot of hype behind new TLD and their potential. While some TLD see moderate success, a lot of the new TLD fall flat. You should always do some research before buying into a new TLD.
Auctions – When you are selling a domain through an auction, you should always include a reserve price. You do not want your domain sold for less than what you hope to get out of it.
The length of a domain name – You should be careful when choosing a domain name for yourself. Your domain name can contain words like Doctor, and Dentist, but do not go for something too long. For example, cosmeticsdentistinmanhattan.com would be too convoluted to read or remember.
Avoid Typosquatting – Typosquatting is a form of cybersquatting where the individual relies on a typo to get clicks on their sites. These websites would attempt to deceive and take advantage of the unknowing user. Websites like Twtter.com and wikapedia.com were both fined for $156,000, so it is in your best interest to avoid typosquatting.
Park all your undeveloped domains – Parking your domain is not going to make you rich over night, but it is still a great way to make some money out of your unused domain names. Checkout our list of parking websites before making a decision on which parking company to use.

If you have any questions please feel free to leave a comment on or use our contact page.

Top 20 Most Expensive Domain Names Adjusted for Inflation

top20

Most people in the domain industry are investors who buy domain names in anticipation of a high return in the future. These investors typically park or develop the website as a way to monetize it. Developing the website could lead to a higher return because it will already be an established website. If the website can maintain a high amount of traffic, it can increase the value of that site. The process of buying and selling these domains does not guarantee profit as there is no way to tell which domains will be profitable in the future. If the domain is a one letter domain or is something that is relevant, the value will generally increase.

There are quite a few domains that sold for over a million dollars and we decided to make a list of the top 20. Instead of a typical top 20 list, Tough Domains decided to adjust it for inflation to 2015 to see how much it would be worth today.

Carinsurance.com – This domain was sold for $49,700,000 in 2010. When we adjusted this for inflation, it came out to be $55,208,788.
Vacationrentals.com – This was one of the most expensive domains to be purchased before 2010 with the record of $35,000,000 in 2007. When we adjusted this for inflation, it came out to be $40,838,545.76.
Insurance.com – This was another domain that sold in 2010 for $35,600,000. After we adjusted this for inflation, the total came out to be $39,545,932.65. Quinstreet owns both Carinsurance.com and Insurance.com
Privatejet.com – This domain sold for $30,180,000 in 2012. After we adjusted it for inflation, the price came out to be $31,910,230.63.
Internet.com – This deal was finalized in 2009 for $18,000,000. After the adjustment for inflation, the price would be $20,315,056.64.
360.com – This domain was sold in 2015 for $17,000,000.
Insure.com – This is another domain owned by Quinstreet. This was brought in 2009 for $16,000,000. When we adjusted it for inflation, it is $18,057,828.12 in 2015.
Bankaholic.com – This domain was sold for $15,000,000 in 2008. If this was purchased in 2015 the price would be $16,861,497.01.
Sex.com – This domain was sold for $13,000,000 in 2010. After the adjustment for inflation, the value is $14,440,930.46.
IRS.com – This domain was purchased for $12,500,000 in 2007. After the adjustment for inflation, it is $14,585,194.91.
Hotels.com – This domain was sold in 2001 for $11,000,000. After the adjustment for inflation, the value is $14,585,194.91.
Cardratings.com – This domain was sold in 2008 for $10,200,000. After the adjustment for inflation, the value is $11,465,817.97.
Fund.com – This domain was sold in 2008 for $9,999,950. After the adjustment for inflation, the value is $11,240,941.80.
Porn.com – This domain was sold in 2007 for $9,500,000. After the adjustment for inflation, the value is $11,084,748.13.
Porno.com – This domain was sold in 2015 for $888,888,888.
FB.com – Facebook acquired FB.com for $8,500,000 in 2010. After the adjustment for inflation, the value is $9,442,146.84.
We.com – This domain was sold in 2016 for $8,000,000.
Business.com – This domain was sold in 1999 for $7,500,000. After the adjustment for inflation, the value is $10,796,667.22.
Diamond.com (undeveloped and not parked) – This domain was sold in 2006 for $7,500,000. After the adjustment for inflation, the value is $8,996,148.22.
Beer.com (Parked) – This domain was sold in 2004 for $7,000,000. After the adjustment for inflation, the value is $8,898,929.85.

As you can see, domain names can be quite a high value commodity. Domainers who were lucky enough to register these domains made a fortune from selling it. While a lot of these domains are developed, some domains like Beer.com is wasted since it is just parked.

As Certain as Domain Names and Taxes

Domain Name Tax Guide

When it comes to buying and selling domain names, one issue that many domainers consistently overlook are the tax implications. For the purpose of this article, we would like to focus on domainers domiciled in the United States.

According to the IRS, Internet Domain Names are generally regarded as intangible personal property and the nominal annual domain name registration fees are generally deductible. If a retailer acquires a domain name, then capitalization should also be considered. To clarify further, we can break down the acquisition of domain names in the following scenarios:

An entity purchases a domain name for the purpose of developing a brand; The monies spent are allocated as an asset that can be depreciated over time.
An entity purchases a domain name with the purpose selling in the future; The monies spent to purchase the domain name(s) are treated as inventory or cost of goods sold.
An entity monetizes the domain name; The monies earned from domain monetization are treated as revenue.

Any expenses that are incurred with the process of purchasing or maintaining a domain name offset any revenue or cost of goods sold. Typical expenses include the following:

Registrar fees, Hosting fees, Commissions or fees paid to brokers to buy or sell your domain name, domain development tool costs, or any domain development costs.

Some important tax issues to consider:

Purchasing and selling domain names as a business or individual; Businesses use Form 4797 while individuals report the sales on Schedule D for capital gains.
Donating domain names; This strategy must be carefully considered because donations of property that has appreciated falls under very strict IRS guidelines. For example, for noncash gifts with a valued more than $5,000, you will need to acquire a qualified appraisal which must be dated no earlier than 60 days before the donation date and not past the filing date of your tax return.
Leased or Owned Domain Names;

A couple of professional references for tax guides at a relatively low cost are available online called Domain Name Tax Guide and Domain Tax Guide.

Tough Domains does not promote any tax strategy and before making any important decisions regarding your tax affairs. You should always consult a licensed qualified tax professional that understands the domaining industry and has experience in filing taxes for entities in the domain business.

Top Parking Companies 2016

Domain Parking: It is our opinion that this form of domain monetization is the one that is suffering the most in the industry. The payout is controlled by domain parking companies that provide very little to zero transparency on the true payout. The payouts are relatively small for the owner of the domain names but high for the domain parking company. The Domains per Nameserver can be use to determine how many domains are parked at their servers. There are several domain parking companies you can choose from. Here is a list or what we believe are currently the best ones out there:

Bodis

Pros: Minimum of 5 domains to open account , Easy sign up and approval process

Cons: Below industry average payouts.

Payout Details: 7th day of the following month. No min payout threshold. Paypal, Wire