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By Ingvar Grimsmo - Canadian Domains and Websites

I have been in the internet business since it all started. I operate hundreds of small and medium websites with AdSense as the main revenue source in addition to helping clients create client-magnet websites that do well on search engines.

I own about 500 domain names, 110 .ca names. Up until recently I have sold very few domain names. For the simple reason that most of them had websites on them, or were parked and generating income. So why sell cash cows?

The formula I use is this: If a domain itself sells for more than 1.5 times annual revenues of a web site I will consider selling it to make room for new projects. I am more of a "setting up" guy than a maintainer. I will sell a revenue producing website for 1.7-2.5 times annual income pending on the growth potential and the intrinsic value of the domain name.

For a buyer of an income producing website it can be a good way to get started, or to grow the portfolio. Think about this: Say a website has been producing $2,500 per year for a solid two years. It is very likely it will continue to do so, and grow with a little work. So you buy it for 2x annual revenues = $5,000. The cost of running the website is say - 10% of revenues (hosting etc.) So your gross profit is then $2,250 per year, a 90% return on your investment.

Probably worth the risk. That's why good, established websites are actually selling for 2-5 times annual revenues.

I recently moved back to Canada from the US. I can say from experience that domain names is truly the real estate of the internet. You don't have to research a lot to realize what some of the top domains have sold for. Those are of course .COM names. To register a new .ca domain name at a good price: CLICK HERE

How about .CA domains?

In a recent conference talk in Vancouver Bill Barnes, VP of the Canadian internet research company ENQUIRO stated that Canada is 2-3 years behind in internet development. On the other hand, Canada is one of the highest internet users in the world. To date, (04/08) .CA registration has not reached 1,000,000. What an opportunity. In my humble opinion, .CA names are like the early condos in Vancouver after Expo 1986. And I am buying more .ca names.

I am listing some at AfterNic, but as you know - world domain buyers can't buy .ca domains unless they have some relationship with a Canadian firm. So the value on the international market is reduced. But on the Canadian market - more and more individuals and companies will be looking for keyword-rich, brandable domains for their businesses.

I guess I am like a real estate investor now. I have the knowledge to ferret out potential high-value .ca domains, I put a website on them to see how they do and then make them available to people who want to profit from the future. We both win.

In addition, there are - so far - few professionals in the Canadian domain name business. The market is growing, and wide open.

So yes, I think .CAs are a great investment. But as all investments, due diligence is needed. You need to understand where the value of a domain is. Type-in? Brandable? Memorable? Keyword rich for search engine indexing? Connected to a well known and search for entity?

Ingvar Grimsmo

Vancouver, BC
April 3, 2008

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