Like an elephant in the room, the 4 letter domain craze can’t be ignored anymore. While most of the average names were worth anywhere from $10-40 for many years, the values seem to have risen to between $150-200+ within the past few weeks. Everyone seems to want to get their hands on these names, and although I don’t see a reason for the rise in value other than speculation. I’ve seen all the arguments about why they have considerable value and why people are buying them so rapidly:
- – End users want them because there are many acronyms
– Many stock symbols are made of 4 letters
– Easier to recall than longer domain names
– They are rare
– There aren’t any left to register
The impetus came a few months ago when a domain investor decided to buy the remaining LLLL.com domain names that were available to register. When people saw that these names were no longer available for the registration fee, they began paying much more to acquire these names. The values rapidly rose, and now we are at price levels that I believe may be unjustified.
Although I own a few of these names and I have friends that own them as well, I think the hype is overblown, and many people are cashing out just as quickly as they bought them. A quick look at Ebay’s “Pulse” page for domain names shows that 9 of the 10 most popular domain name auctions are bulk auctions featuring LLLL.com names.
First off, congratulations to the sellers. You made a nice gamble and it certainly paid off. This is one reason why so many people love the domain business. You turned $8 into $200 multiplied by the number of names you bought, and that is great. I think this is the first type of domain name that new investors really had a shot at buying without having to fork over a large sum of money (or get lucky in a landrush situation).
I would like to offer one piece of advice to those selling their LLLL.com names. Reinvest your profits back into the industry and buy keyword or generic domain names rather than more LLLL.com names. At this point, buying LLLL.com names is purely speculation, and if there is a price drop, you could lose your profits. When I started out a few years ago, this is what I did. I sold many names at tremendous % profit margins (low $ though), and reinvested in fewer but better names. I continued to do this and eventually turned many average names into a few pretty good ones.
Of course, you know what they say about free advice, but I thought I would share it anyway. Congrats on finding some gold!