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It's an experience many of us share: you think you've come up with the ideal domain name only to find that the domain name is already registered and the owner is only willing to sell it for a small fortune.

Savvy investors and speculators have made millions buying and selling domain names over the years.

But thanks to the economic downturn and a growing overall trend of declining revenue for 'parked' domains, players in the secondary market for domain names are increasingly finding the tables turned.

For online businesses and internet entrepreneurs looking to buy an already-registered domain name, that means that now may be the perfect time to make a move.

In December, DomainNameWire reported that BuyDomains was offering year-end deals on many of the domains in its vast portfolio. It is owned by NameMedia, a major player in the secondary market that had planned to go public in 2008 but was, not surprisingly, forced to pull its IPO, citing market conditions.

In looking back at 2008, DNJournal observes:

The PPC (pay per click) business was the first to run aground, falling by close to 50% according to most accounts. By the third quarter rough water had started roiling the aftermarket as well. That storm was still intensifying when the end of the year arrived and damage was becoming evident, especially at the high end of the market.

The trend is clear: the past months have seen far fewer big money sales than in years past and there is far more secondary market activity at significantly lower dollar amounts.

Expect this trend to continue until the economy picks up again. And even then, it's questionable whether the market for domain names as 'investments' will reach its past heights. With parking revenue down for reasons that seem, in part, unrelated to the economy, and the significant costs associated with holding onto large portfolios of domain names being so high, it seems inevitable that some domain name owners will have enough uncertainty to encourage dealmaking.

Some may even let chunks of their portfolios go altogether. I've noticed some pretty decent domain names being dropped of late and unlike in the past, many are not being immediately snapped up by other 'domainers' or customers of services like Pool.com.

While none of this means that you're going to be able to acquire a one-word generic domain like Business.com for $1,000 anytime soon, it is largely a buyer's market and if there's a registered domain that you've had your eyes on, now is a pretty good time to make an offer.

Patricio Robles

Published 26 January, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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