Sex.com anyone?

Sex.com is officially back on the market and expected to soon reclaim its title as the most expensive domain name on the internet. Beaten only by insure.com, which sold for $16 million last year, sex.com is one of the most valuable domain names on the web.

But are domain names still a worthwhile investment? And if so, which names should you buy?

Is it worth investing in a domain name?

Melanie Dymond Harper, owner of Herald Information Systems, said: ‘I think it’s now quite hard to make money out of a domain name on its own. The ‘good’ ones - simple words in the well-known domains like .com - have mostly all gone’.

‘Also, the days when you could make money out of buying someone else’s brand name as a domain name and selling it back to them have definitely gone,’ she added.

The practice is known as ‘cyber squatting’ and is now illegal. If you are deemed to have acted in bad faith you will just have the domain name taken off you and handed to its trademark owner.

Harper added: ‘There is some money to be made from buying an interesting/relevant name and then showing ads on it, but unless you have a really interesting name and very minimal costs associated with the domain's purchase and upkeep you are unlikely to cover your costs’.

When it comes to choosing a domain name, remember that the reason why names such as sex.com, insure.com, fund.com and even diamonds.com are so successful is because they are simple, short names that are easy to remember and easy to spell.

According Sedo.com, the online domain marketplace which is currently brokering sex.com: ‘Descriptive domains that define a category historically have been the most valuable properties on the Web’. This is because words that define a wide category tend to be among the most searched terms on the internet and therefore attract a lot of traffic. 

When you choose a domain name you will also need to pick a domain name extension -.com, .co.uk, .net etc.  There is much more choice these days, with newer domains such as .biz and .info starting to appear, although these are likely to be more expensive.

How can a domain name make me money?

Buying and selling

These days there are thousands of websites that buy and sell domain names such as sedo.co.uk, godaddy.com, 123-reg.co.uk and acorndomains.co.uk for example.

To buy a domain name, you simply type the name you want into the search engine to see if it is available and how much it costs. You will need to consider how long you are likely to wait before selling the domain as registry costs are usually calculated yearly, or every two years – after which you will need to renew your registration.

When you come to sell your domain name you first need to price it at what you think it is worth and then list it on the auction section of the website so people can bid for it.