Fourteen years ago, Chris Clark shelled out 20 bucks to register the domain name “pizza.com.” On April 3, he sold it for $2.6 million!

With more than 150 million domain names already listed with registry firms, coming up with unused — and uncomplicated — Web addresses is close to impossible. That’s led to an active secondary sales market, where domain owners try reselling their Web names to big corporate spenders.

Most domains resell for about $2,000, domain traders say. But the premium names — the generic ones that cover an entire industry and end in the all-important “.com” — can draw millions.

Business.com sold for $7.5 million in 1999, and so did diamond.com seven years later, according to an industry trade magazine. In 2006, a Russian alcohol exporter bought vodka.com for $3 million, while sex.com sold for about $12 million in cash and stock. Last month, fund.com sold for $10 million.

Such names are popular because they naturally draw Web traffic. An Illinois T-shirt company, for example, recently paid $225,000 to buy tees.com after executives learned that the site was getting 17,000 hits a month — mostly by people who typed in the address out of curiosity.

Clark bought the name in 1994, when the Web was just beginning to commercialize, though he had no idea what a winning lottery ticket it would become. Back then, he had launched an Internet consulting firm and thought the domain would help him score a contract with a pizza company. But no contract ever came through, and he sold the business in 2000. Clark’s latest venture, Minestream Software Corp., provides Internet protection products.

He kept up the annual $20 registration fees on the pizza.com name, though, and basically sat on the site, selling advertising space here and there. About a year ago, he and a friend turned it into a profitable pizza directory and advertising site that earns more than the $5,000 it costs to maintain.

Then they heard about the Vodka.com sale, and wheels began to turn.

Read the full article >>>