Heritage Auctions specializes in collectibles, but tonight it's breaking in a new line of business: Domain names. Mutuafunds.com, with a minimum bid of $1 million, is the star attraction, but 60-some others will also be on offer, including suit.com ($95,000 minimum bid), tie.com (minimum $100,000), and bulkdiapers.com (minimum $500).
The right domain name can fetch a high price from a motivated buyer. Facebook reportedly paid $8.5 million for fb.com in 2010.
"But even as much information as we get, it’s just the tip of the iceberg," he says. "The vast majority of sales are never recorded. When a big corporation buys a domain name, they almost always insist on a non-disclosure agreement."
He thinks the total could be $5 billion a year.
Marc Ostrofsky bought mutualfunds.com 10 years ago. Buying and selling domains has been good to him. He once sold business.com for $7.5 million.
He says mutualfunds.com makes him $10,000 to $20,000 a year, just sitting there. People who happen to type in the domain see ads from Google, and he gets a cut of Google’s profit.
"It’s like owning a piece of real estate and putting on cars on the weekend," he says. "So everybody driving by can see the cars for sale."
Now, he’s ready to let somebody else try to do something with it. He thinks Morningstar would be smart to pick it up.