Investors who are familiar with the conditions of the economy and stock market of the bubble days of the late 90's and 2000 are probably also familiar with the term "domain speculation." According to the AP, those days seem to be back in the domain world.

The underlying premise behind the domain speculation game is that you can find domains that are undervalued or under-appreciated and sell them to someone when they become in-demand or needed. While this theme does make sense in many cases, such as purchasing a domain name that is unclaimed for a few dollars, I think that the average investor should steer far away from the purchase of already-expensive domain names with the hopes of selling them later.
While I certainly don't doubt that people can make money in this business, I think that, for most people, starting a real business or investing in the stock market are much better options. I tend to believe the model for these domains is flawed -- rather than actually operating a site with the domain, these owners load the site with pay-per-click ads and hope to, at some point, sell the domain at a higher price.

The article gave the example of a syndicate's purchase of megayachts.com for $150,000 which "isn't an actual yachting site, but it contains numerous ads and links for real yacht companies, boats and cruises. The owners of the site get paid each time a viewer clicks on one of those links," according to the article.

Unless you have pretty deep pockets, dropping $150,000 on a site which will pay a few cents per click probably doesn't appeal to you anyway.

But to participate in the domain name boom you can still try to register names which haven't yet been found. This is more rational than "paying up" for names because it only costs a few dollars and the downside is obviously far less. For example, you might want to check out any of these available names:

• URLTrading.net
• BestHedgeFunds.info

Or if you like the prospects of our writer Zac Bissonette you can steal ZacBissonnette.com before he gets it.
All this being said, there are still other ways to participate in this domain-speculation boom. For example, a stock like Tucows Inc. (USA) (AMEX: TCX). This small (less than $100 million market cap) company offers domain registration amongst its list of services. It saw solid revenue and gross profit growth last year but SG&A spending is killing the firm's net income line. But if you dig further into the company maybe you'll see something special, like Mark Cuban did when he featured this in a blog post on his portfolio about two years ago.