A regular reader of my articles has sent this email: “I invested in stock market and earned some quick money. Though the returns look attractive and invest consultants say the index will soon cross 20,000 mark, I don’t want to speculate any more. I would like to diversify some of my profits to the Internet based self-employment projects. My best friend tells me that it is easy to make a lot of money by registering domain names and selling them. I am ready to invest in this project…” I have received similar mails in the past too.

Making money – whether it is from online projects or offline projects – is not easy. Investing money in an Internet based speculation is as risky as investing in stock market. If your domain name is a good one, you may be able to sell it for a good price. Another option is to build a profitable website using that domain name.

A domain name is a Web address – the one that comes after http://www and ends with something like .net, .com or .in. Every computer in the world has an IP address in four part number format like 23.01.19.64. However it is difficult to remember pure numbers. So, alphabets and numbers are used. When someone types a domain name into a Web browser, the requested Web page will open. For example, when you type www.NewIndPress.com in your browser, the domain name system locates an Internet address for " NewIndPress.com" and displays the webpage.

The domain names must be registered through an ICANN accredited registrar. You can get domain names for $7 from big companies such as GoDaddy.com. You have to pay a license fee for your domain name every year. The annual fees for names that end with .com, .net and .org range from $7 to $35. The prices for other extensions such as co.uk, .in, and .nz vary from country to country.

When you register a domain name, it will be associated with the computer on the Internet you designate during the period the registration is in effect. If the registrant (that is you) elects to, a domain can instead be registered and parked with the registrar for free. So, many business persons buy good domain names for $7 each and try to sell them for $ 100 or $10,000. When you register, make sure that the domain name is registered in your name. Use ‘Whois’ tool to get this information. During the period of registration, you are free to transfer the domain name to others.

Some internet service providers give you free names such as yourname.xyz.com. They are not good for serious business.

Domain names can be a great investment. If you have registered a good domain name that you are not using, maybe someone else can. A few years ago Internet.com was sold for a sum rumored to be around the $100,000 mark. A little later business.com was sold for a staggering $150,000. But these are exceptions. These two cases triggered a mad rush for domain names. Now almost all meaningful names have been captured by cyber squatters (people who hold names without using them) and offered for sale at exorbitant prices.

Nowadays it is impossible to get such names. However, you will certainly be able get good but slightly longer names that use generic keywords. Many free downloadable software programs such as Domain Name Analyzer can help you create good domain names and search hundreds of names in one go.

After you register a few names, you can offer the domain names for sale through domain broker websites such as BuyDomains.com or Sedo.com. But don’t be carried away by the prices that you see on these websites. Please use your common sense.

Another easy way to sell domain names is to advertise for free in online discussion forums such as WebHostingTalk.com

You may make some money if you pick a good domain name, but you are not going to get rich by selling domain names. A few years ago, I bought a domain name for $13 and sold it for $750 within a few days. The buyer is trying to sell that name for $1,900 through the Internet. But, I find it difficult to do it as a regular business.

If you want to make money through domain names and don’t want to speculate, either become an affiliate of domain name registrars or work as a domain broker. While it is free to become an affiliate, you may have to pay to become a branded agent of an accredited domain name registrar.