C. Buy the Name

Domain names are bought, sold and auctioned like any other property. If the domain name you want is being used on an actively maintained commercial website, chances are slim the owner will sell it to you. However, if the name has been reserved but isn't being used, you may be able to get it for a price you can afford.

How much is a domain name worth? Most domain names don't sell for that much (though some exceptions are listed in "Big Sellers," below). At GreatDomains.com, the leading online domain name brokerage house, the average offer price is around $32,000, and the average selling price is $14,500.

That website provides an interesting discussion of how it ranks and appraises the value of the domain names it deals in. For a detailed discussion of how this particular brokerage appraises domain names, visit its website at http://www.greatdomains.com/. The most important factors are:

•the number of characters (the shorter the better)

•the market potential of the business to which the domain name is attached (for example, car.com is more valuable than camping.com because it reaches a broader market); and

•the use of .com, which is better than .net or .org for a commercial enterprise.

You can buy a domain name in a variety of ways. You can look in online classifieds, contact the owner directly and make an offer, make a bid on an auction website (ebay.com, for example) or go through an online domain name broker such as GreatDomains.com.

Big Sellers

Prices of some recent big-money transfers of domain names:

business.com $7.5 million

wallstreet.com $1.03 million

computer.com $500,000

question.com $175,000

internet.com $100,000

drugs.com $823,000

ForSaleByOwner.com If you are buying or selling a domain name through an online broker (like GreatDomains.com), the broker will likely supply all the necessary paperwork to legally transfer the domain name. If you don't use a broker, you or the other party to the deal must supply the purchase agreement. If it falls on you to come up with an agreement, consider adapting the sample agreement below.
If you use an online broker, here's how your transaction might work. First, you go to the broker's website. If you find a domain name you want, you submit an offer to the broker, who forwards your offer to the seller. The broker then informs you whether your offer has been accepted, rejected or there is a counteroffer. If your offer has been accepted, the broker mails you a purchase contract and detailed escrow instructions to sign. You pay no broker fees. The seller pays all the fees.
Beware of Cybersquatters
If the domain name registrant appears eager to sell the name to you and the name is the same or similar to a mark you're already using, take a moment to reflect. It's now illegal, under federal law, to traffic in domain names in this manner. See Section D for a more detailed description of how the law works.