Sweet smell of profit if it's an Internet domain (2)

By the end of 2012, China had 13.4 million domain names registered in the country, a 73.1 percent year-on-year increase. Among all these names, about 7.5 million, equal to 56 percent, end with ".cn", a 112.8 percent year-on-year increase. More than 280,000 domain names end with ".", the Chinese-character-version of ".cn", according to the latest report on the development of the China Internet Network Information Center.

Some 4.8 million, equal to 36 percent of domain names, end with ".com", the CNNIC report said.

"It's a booming market. Domain names will increase at an even faster pace over the next few years when China fully opens up IPv6," said Li Xiaogang, a senior technician with Shanghai Saibao Technology Consultancy Firm.

Li said upgrading IPv4 to IPv6 will release more domain names, which may be a double-edged sword for experienced investors.

"Those who enter the market later may have more cash liquidity and may register some names carrying the most up-to-date meanings and therefore sell better. Meanwhile, those who enter the market earlier may have an advantage in that they already own short names that are more appealing to e-commerce business owners who are the major buyers of domain names," said Li.

Yu Wenjing, a 30-year-old Shanghai-based domain names investor, said the key to making a profit from domain name investment is to be focused.

The value of a domain name mainly comes from the image it conveys. It must be linked to a commercial industry or appeal to people's feelings. Without focus and in-depth research into a specific industry, an investor is unlikely to attach a meaning to the domain name, making it not worth trading.