LLLL Domains: Domainers Gone Wild or Genuine Profit Opportunity?

Domain forums are filled with heated discussions about LLLL domains. Some domainers say that LLLL domains are a wonderful opportunity to form money, while others claim they are merely a fad that won't last.

What are LLLL domains?

LLLL stands for any four-letter combination, such as LOVE, HWII or XQZV.

There are 456,976 possible four letter combinations (26*26*26*26) and in the .com extension, all LLLL domains are taken. The last available LLLL .com domain was registered on November 2, 2007.

Are they worth anything?

The value of LLLL .com domains has increased very quickly, but obviously, some LLLL domains are better than others.

4letternoob reports in the latest LLLL.com price guide that even the "worst" LLLL .com domains are now selling for at least $52 on the wholesale market. whether you registered any below-average LLLL .com domain for $7 in October 2007, you could now sell it for at least $52… that's a nice 643% return in less than four months.

Just a year ago, at the beginning of 2007, more than 60,000 LLLL.com domains were still available. Domainers with sufficient capital and foresight were certainly able to prepare a lot of money.

What determines the value of a LLLL.com domain?

Obviously, LLLL domains that constitute a real word, such as LOVE, RARE or BLUE are most valuable. For all the other domains, general consensus among domainers as well as letter frequency statistics indicate that there are premium letters, average letters and poor letters.

• Premium letters: a b c d e f g h i l m n o p r s t
• Average letters: j k u v w
• Bad letters: q x y z

An LLLL domain that contains only premium letters (e.g. defi.com) will be considered more valuable than a domain that contains one average letter (anwe.com), two average letters (ivew.com) or even a bad letter (qefu.com).

Another aspect considered by domainers is the distribution of vowels and consonants, which is expressed by the most valuable CVCV (consonant-vowel-consonant-vowel, e.g. baka.com), followed by VCVC (vowel-consonant-vowel-consonant, e.g. ofam.com), CVVC (consonant-vowel-vowel-consonant, e.g. geat.com) and VCCV (vowel-consonant-consonant-vowel, e.g. opke.com).

Interestingly, several of the so-called average and poor letters are popular in other languages. For example, j, k, q, x and z are frequently used in Pinyin Chinese, while v, w and z are relatively common (more so than j or p) in German.

Demonstrating the English-language bias in the mainstream LLLL domain valuation model, Adam Dicker, the owner of DNForum, reports that he sold zwas.com and zzzq.com for more than 5 figures each.

Do LLLL domains have a future?

Are the recent price developments sustainable and can LLLL .com domains still be considered a good investment at that stage? After all, there are as many as 456,976 LLLL .com domains and whether only a relatively small percentage of owners were to put their portfolios on the market, prices would undoubtedly go down. Another potential roadblock is the fact that many LLLL domains will never sell to an end user considering out of more than 450,000 possible combinations, there will be some that simply aren't used as an acronym anywhere in the world.

I personally missed out on the LLLL craze, so take my opinion with a grain of salt: whether the history of LLL (three letter) .com prices (up, up and up), the incredible enthusiasm on domain forums, and the rapidly growing number of active domainers are any indication, LLLL domains will indeed have an impressive future. In a very short instance, they have become collectibles that do not necessarily need an end user to be considered a valuable asset.

Just like numismatic gold coins, which have collectible value and trade for much more than their gold substance would propose, or rare used stamps, which are worth a lot more than the paper they're printed on, but do not have any "real" usability value, LLLL domains meet all the requirements of being valuable collectibles:

• They're rare (all 456,976 domains have been registered and they're not making any new ones).
• Their owners are very enthusiastic about them.
• There's a large and constantly growing number of speculators and wholesalers that bring liquidity to the market.
• There is increasing demand among end users, particularly among companies that use four-letter acronyms.
• Last not least, many LLLL domains even have natural traffic and generate income through pay-per-click advertising.

As you can tell, I'm cautiously bullish on LLLL domains and I'll be buying more on the inevitable price dips we'll see by the coming months and years.

Finally, there's always .net…

Out of 456,976 LLLL .net domains, all all-premium domains are taken, but more than 215,000 domains are still available as of today, Feb. 23, 2008. Each of these available domains contains at least one average or bad letter. Before you whip out your credit card, consider that you probably won't see any profits until all LLLL .net domains have been registered (which could take more than a year), and that .net domains typically sell for only 10% to 20% of their .com equivalent.

Original post by domainer