I am prompted to write this post because of something that happened to me recently. One of the things I like to do on the side is buy and sell highly desirable and generic domain names. In this respect, until the past year or so, it was relatively easy to find and secure domain names within Kenya’s .KE name space. In fact, you could say it was more often than not you could pick any name of choice and you would find it, available, for registration. However, this trend is fast changing.

What happened to me earlier this week is something that should not have happened if it were not for my lack of attention to detail. I had secured several high quality domain names under the .KE space over the years. These domain names were quite clearly “to die for” in any context. However, being in Kenya, and waiting till the last minute to renew them, I was sure I could do so quite easily. This was not to happen. The domain names I had were snapped up within minutes of expiring by other parties. I lost ALL of them except one. It was a sobering moment!

Now, this sort of thing is not uncommon when your dealing with top level global domain names such as .COM or .NET. However, this is something unprecedented for Kenya since we are now seeing a shift to where .KE domain names not only have local but International appeal – the registrant who “grabbed” my expired .KE domain names is actually based in Seattle, USA. More specifically, Kenya is witnessing the arrival of an Internet entrepreneurial class known as “domainers”. Domainers, by simple definition, are people or organizations who professionally buy and sell domain names for profit.

Domainers look for domain names that usually have the potential for high Internet traffic, as well as high resale value. The domain names in question tend to be generic words which can be valuable for type-in traffic and for the dominant position they would have in any field due to their descriptive nature. Hence generic words and phrases such as poker, insurance, travel, sex and others are attractive targets for domainers.

Type-in traffic is a term describing visitors landing at a web site by entering a keyword or phrase with an extension such as .COM or .KE (with no spaces or a hyphen in place of a space) in the web browser’s address bar rather than following a hyperlink from another web page, using a browser bookmark, or a search-box search. Type-in traffic is a form of direct navigation. The amazing thing is that lots of people “assume” a web site for a brand or service in this manner which leads to lots of traffic for the domain name’s owner(s).

What domainers do once they have secured a high traffic domain is that they then use a service provider such as SEDO, Moniker or GoDaddy who helps them monetize the domain name through landing pages that have contextual links to services such as Google’s Adsense. In this manner, a domainer will make money every time someone clicks on one of the Google AdSense links on the landing page. There are domainers who make millions of dollars each year by having thousands of domain names in their portfolio that work in this manner.

In addition to making money through landing pages as described above, domainers will also tend to buy and sell domain names for profit. Case in point is domains like sex.com which in the past held the record for a US$ 13 Million! Imagine that for just a domain name! Domainers with the right domain names do indeed make a tidy profit buying and selling domain names which is why Kenya is now on the map.

Kenya currently has just over 15,000 domain names which is small compared to South Africa which has over 600,000 domain names. However, Kenya has a speculative 6 million Internet users and over 20 million mobile users as well. In addition, the landing of broadband over the last couple of years as well as the growth of local digital content initiatives all serve as catalysts for the domainers to check into this market at this juncture. It really is a gold rush of sorts and the early players will reap the biggest rewards.

Going forward, what is inevitable for Kenya which has not happened yet is what is called a domain aftermarket. In a nutshell, a domain aftermarket is a secondary market for Internet domain names in which a party interested in acquiring a domain that is already registered bids or negotiates a price to effect the transfer of registration from the registered holder of that domain name.

Domain aftermarkets are facilitated by service providers such as SEDO, GoDaddy and Moniker which provide communication methods for buyers and sellers to interact, often anonymously, to negotiate and close a transaction. They often provide additional services, such as financial escrow services and domain parking. It goes without saying that a local domain aftermarket should ideally happen in Kenya in 2011 for .KE domains. Clearly, there is a need and the demand is picking up already.