A worrying myth has been floating around that .com.au domain names are a good investment, potentially worth a fortune. Before you launch in to implementing a ‘genius’ new business idea of snapping up domain names to resell in the future with a two hundred-fold return, think again.

With little more true value than those pricey certificates claiming that you “own” a star, purchasing a .com.au domain name valued at more than the annual mortgage on your home is not the way to get rich quick. “Don’t start a domain name trading company yet,” Larry Bloch, CEO of Netregistry advises, “Because you’re not going to be a multi millionaire anytime soon through that avenue.”

The Australian Domain Name Administration (auDA) changed its rigid rules in July of this year, and expressly forbids the purchase of a domain name solely for the purpose of onselling it for profit. Any domain names registered cannot to be onsold until 6 months after they were registered. In the domain name aftermarket, auction websites have popped up selling on .com.au domain names for tens of thousands of dollars.

Since the 2006 sale of sex.com for between $12-14 million in the United States, speculations have been flying about the value of domain names. Prior to the sale of that landmark sale, business.com was the biggest seller, fetching $7.5 million. Beer.com closely followed with a price tag of $7 million.

Australian domain names can be fantastic earners for sites with enough traffic and advertising income. Sites like gizmodo.com.au, Australian Car Advice and lifehack.org earn their owners enough income to live off comfortably. However, most .com.au, do not hold the same value as the more universally visited .com websites. The value in popular .com.au sites lies in the content, not the domain name itself. “With .com domains, the return is much higher because the traffic is higher and you pay less to register a .com," says Bloch. "In the .com market, the majority of activity is in the wholesale market where domainers buy and sell domain names frequently on very slim margins. That model is at best challenging in Australia.

The value on a digital address is determined by the number of clicks made on the site that can then be sold to advertisers, and the number of people who type that address directly in to a web browser. Australian sites don’t experience the same high volumes of traffic as .com. “It’s not a booming industry, so people should realign their expectations,” Bloch says. “People will have to settle with smaller sales, due to the smaller value of .com.au.”

The aftermarket puts domains names in the hands of their owners, giving people the ability to on sell their domains once they no longer have use for them. Bloch says that Netregistry may get involved online and probably help with the process of buying and selling, but warns people not to have unrealistic prices in mind. “I support the aftermarket, it has enabled owners to sell their domain names if they no longer need them or if another party can value them more highly - just don’t get carried away,” Bloch says.

Hold off on placing that $5 million dollar bid for koala.com.au, then. It is possible however, to make a living from a frequently updated successful website, like fashionista Gala Darling or Darren Rouse of Problogger. If you do want to increase your online earnings, focus on building links and producing quality content.

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