This section introduces the concept of domain names, what they are and what they are used for. It also highlights some important misconceptions about cheap domain names and explains why every site should have one.

Historically, Network Solutions was the only company authorised to register domain names. This has now changed as the domain name market has become open to competition and several dozen companies have become authorized to act as domain name registrars. Domain name registrars are permitted to access and modify the master domain name database that contains the records of all the domain names registered to date. This database is currently maintained by Internic, a non-profit spinoff of Network Solutions.

Domain name registrars must pay Network Solutions a small fee for each domain name they register, but beyond that fixed cost they charge different amounts to cover their costs and make a profit. This means that whereas a year or two ago the going rate for a domain name registration was fixed at $70 for 2 years, now different companies offer different registration rates, for periods from 1 to 10 years. The requirements that must be fulfilled to become a domain name registrar are not particularly stringent, and this has sometimes led to trouble since some registrars do not have the robust technical infrastructure necessary to handle and process large volumes of domain name registrations. Some registrars have also cut corners by not implementing certain technical functionality in their local databases, such as the ability to transfer names to another party.

If you go with the World's Largest Registrar - GoDaddy.com , you will not be dissappointed. If you're considering purchasing cheap domain names for investment (either in the form of new registrations, or on the secondary resale market), it's important to focus on how you're actually going to make money from your portfolio of domains. Without a clear up-front vision of the "path to liquidity" for your domain investments, it's better to stay out of the investment side of the business entirely. Remember, a cheap domain name that is gathering virtual dust (i.e. that's not generating traffic or sales inquiries) is worth nothing at all - in fact, it has a negative worth since you'll be required to pay a renewal fee every year to maintain the registration (and hence control over the domain.) On the other hand, if you can find ways to generate revenue from a cheap domain name even while you're waiting to unlock much greater value from it through a sales or leasing transaction, you're in a much stronger position. As long as a domain name pays for its own upkeep over the course of a year, there's nothing (in theory) to stop you holding on to it indefinitely. When considering purchasing cheap domain names for investment (whether new registrations or purchases made in the secondary market), it's important to focus on how you're actually going to make money from your portfolio of domains. Try Google Adsense. Click here to find out more.


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