A Brief History of the Internet and A Look At .COM Success Barriers

By on February 28, 2010

This will be the first of a two-part article detailing insight into the past and the future of the internet. Before delving into what is to come in the not-so-distant future, I would like to offer some tech history for those unfamiliar with the creation of the internet. Following that I will be sharing some of my personal experiences and ideas regarding the .COM space.

First, there were local computer networks established within government organizations and universities across the globe. In 1973 the TCP/IP protocol was being developed by Vinton Cerf from Stanford and Bob Kahn from DARPA which would allow diverse networks to connect to each other. Did they ever.

In 1985, the first domain name was registered (Symbolics.com). Years pass and a select few savvy entrepreneurs, businesses and investors including IBM, Intel, AT&T and Cisco stake their claim by applying for .COM domain names.

By 1995 the networks had exploded and become the world wide web, a collective pool of human knowledge. Millions are aware, if not getting involved actively or passively. The internet did what it is now known to do very well, that is, grow!

ICANN was established in 1998 as in independent organization with the task of managing IP addresses and domain names.

Just prior to ICANN’s formation in 1997, a major internet milestone was reached. 1 million .COM domain names had been registered. It took 12 years. This number is now dwarfed in comparison to the over 80 million .COM domains registered today.

Over the past two decades the internet has grown to become an integral part of our individual lives and society as a whole. It may even be getting the recognition it deserves with a nomination for the 2010 Nobel Peace Prize.

The .COM top level domain has reached it’s 25th anniversary! You can join in the celebration and learn more at 25YearsOf.com

The .COM Bubble (Our 15 Minutes of Fame)

The .COM Bubble was the period from 1995-2000 during which investors poured massive amounts of funding into internet and technology startups. After seeing record rises in stock valuations, business was moving lightning fast and without caution. It turned out to be quite a big mess. I prefer to remember this as the period in which over 20 million .COMs were claimed.

In 1997, I taught myself how to code websites and soon had my very own one-man web hosting and design company up and running. I witnessed the boom in online business and began to create my own web properties, communities and sites for local business by contracting for design work and reselling hosting.

Along the way, I made a few domain sales on eBay and Afternic. Unfortunately, I lacked the capital to invest very much in domains (oddly enough, domain registration was $75 per year back then). A small barrier that would soon be broken down.

If you entered into the domaining industry after 2000, like myself, then you probably have a little nagging feeling that you somehow “missed the boat.”  The forethought and technical understanding to apply to register keyword domains was held by a select few. Many of those individuals are now famous today for their successes.

One of those founding domainers is Frank Schilling who holds one of the largest domain portfolios in the world. In an older post on DotSauce I featured some predictions from the pros, from which I’d like to share this quote by Frank:

Today, getting a good domain name may be pricier than it was in the early days of domaining, but dollar for dollar you are still far better off investing in .COM domains because .COM is a global brand.

There is still countless opportunity today, still massively profitable investments to be made in .COM domains. You simply need to break down the barrier of entry into this business.

The .COM Barrier

There are a few things that prevent your average internet enthusiast from becoming a successful domainer. Let’s review them and help break down the .COM barrier.

1) Price – High quality .COM domain names sell for $1 million+ seemingly every month. Countless small and medium sized sales in the hundreds to several thousand dollar range are made every day across many domain marketplaces.

Most would agree that it is easier to make more profit by investing in high quality domains at a price tag of a few hundred dollars each which can later be sold for several thousands rather than do lots of smaller sales. While this may be true, raising the initial capital is a barrier that many face.

You can, however, get started now with those smaller sales. New .COM domain registrations are around $7 if you use a coupon code and there are other bargain deals in the aftermarket to get you started towards building a valuable portfolio.

2) Domain Industry Knowledge – A successful domain investor understands the big picture. They know the life cycle of a domain, it’s expiration process, the registrars and organizations involved. They know the best research tools, analytics and data to discover worthwhile domains.

Some domainers have all this down to a science and keep watch for the latest news and notable sales.

It would be difficult to get far without a solid understanding of the domain aftermarket and domain names themselves. Having a passion for what you do goes a long way.

3) Common Sense – Unfortunately, this is a big part of the barrier to overcome for success in domaining. Without common sense, your experience domaining may not be such a pleasant one and could turn into a money-sink. One needs to apply common sense when undertaking these domain business tasks.

  • When registering or buying a domain be sure the vision for your domain is clear. You want to know that it is worth your investment and ideally have potential end-users present. With new tools, like Estibot, it is becoming easier to evaluate a domains potential, but further research and a human’s perspective is always recommended.
  • When choosing how to monetize a domain through development or parking. Without significant time invested in development and content creation, most mini-sites or landing pages will not be indexed high enough on search engines to be worth the time invested. As for PPC parking, if your domain does not receive enough traffic to recoup the yearly renewal fee then don’t bother with it. Many domains are not fit for either, and that’s OK. Instead, focus on sales or your established websites.
  • When marketing domains for sale, pricing your inventory and negotiating sales you need to have a good understanding of the liquid and potential value of your domain. What a name may sell for years from now is not a realistic interpretation of present value. Understanding who you are marketing to is also a very important factor in determining a successful sales price.

Be reasonable, be real and learn from your mistakes to overcome these and the other barriers to .COM success.

The Future

In part 2 of this article series I will be exploring some of the latest innovations, research, data and predictions of how the internet will evolve and grow over the coming years.

I’m very excited about writing this feature as I’m somewhat of a futurist, early adopter and science-fiction fan. Or maybe it’s because I don’t want to miss the boat again. How about you?

Please subscribe by RSS, by email or follow @DotSauce on Twitter to be notified about part 2, The Future of The Internet!

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About Mark Fulton

Mark is the Founder of DotSauce Magazine and a full time web developer, domain investor, SEO and online marketing professional residing in North Carolina, USA. Visit MarkFulton.com for information on freelance website development, SEO and consultation services.