Internet domain names are a hot commodity again. But unlike the 1990s, when speculators bought up Web addresses in hopes of reselling them later for a big payday, many of today’s purchases are aimed at cashing in on the boom in online advertising.
Firms are snapping up scores of generic domains, like mutualfunds.com and videocamera.com, and loading them with pay-per-click advertisements using services from Google Inc., Yahoo Inc. and others. Visitors to these Web sites see little more than a list of text ads for products or services related to the domain name.
The domain-name market also is attracting new types of investors. Once largely the province of entrepreneurs, it is now drawing venture capitalists, wealthy families and public companies. Domain aggregators such as Internet REIT LP, which is raising $250 million to buy domains, see the Web addresses as long-term investments that yield a steady stream of income for shareholders.