Chapter Four: Domain Name Investment

For anyone who has ever used the internet, domain names are no stranger. Basically, anyone who’s been online knows that you need to enter a web address into the browser to access a website. Yet, for most people, remembering and typing out domain names is a troublesome task.

That’s why the appearance of Zhou Xuan’s hao123 was such a blessing for beginners. Zhou Xuan believed that, with his promotion, hao123 would definitely catch on and dominate the majority of the navigation website market.

But when it comes to domain names, they also represent a great investment opportunity.

As the internet and commerce grew, and more companies emerged, the number of registered .com domains soared to over a hundred million within a decade or so, leaving almost no good domain names available. The limited supply meant that premium domains became extraordinarily expensive, forcing many startups to turn to new top-level domains. Even though many new domain extensions appeared, .com remained the leader for over ten years, ensuring its value stayed far ahead of other extensions.

It was now 1998, and countless top-tier .com domains were still up for grabs, unregistered. In Zhou Xuan’s previous life, many internet moguls, such as Cai Wensheng and Yao Jinbo, had amassed numerous premium domains that would eventually be worth tens or even hundreds of millions.

Domain names have always been about value investing: holding onto the domain until an end user comes forward with an offer. For companies, enhancing their brand often justifies paying a hefty price for the right domain. Domain holders could earn tens, hundreds, or even thousands of times their initial investment.

Later on, companies like JD.com and Xiaomi would pay millions to buy back their domains from abroad, protecting and amplifying their brands in the process. It’s safe to say that if one invested in a few good domain names at this point in time, life would be worry-free forever.

In his previous life, Zhou Xuan had known early on that domain investing could be lucrative, but, like most people, he never acted on it. Even if he had, without the necessary vision, he would likely have lost money, just like the masses.

It was only a few years after graduation, during the 2015 domain investing boom, that Zhou Xuan and his colleagues caught the market at its peak. In just half a year, even ordinary domain names surged by over ten times, with some increasing dozens of times in value. Everyone thought a golden era for domains had arrived, not realizing it was all manipulated by market makers. When the crowd jumped in, driving prices higher, the big players seized the opportunity to unload their holdings.

It was just like the stock market—people only buy when prices rise. Had Zhou Xuan and his friends sold early, they could have made a handsome profit. But they kept expecting prices to go higher, only to see them crash half a year later. Many domains weren’t worth renewing and simply expired.

After that, Zhou Xuan realized he wasn’t cut out for speculation and decided to focus on his work and earn his living honestly. Still, that year of chasing good domains taught him a lot about the tricks of the domain trade.

Now, it was 1998, and Zhou Xuan saw that there would never be a better time. The only reason he hadn’t thought of investing in domains earlier was simply a lack of funds. At this time, there were only a few registrars in China offering domain registration services.

Wanwang was one of them, founded in April 1996 and among the first registrars in China. It would later be acquired by Alibaba, becoming a favorite among domain enthusiasts.

Zhou Xuan opened Wanwang’s website and checked the current registration fees. Both the registration and annual renewal cost over four hundred yuan—a hefty sum, he thought. A decade later, domain prices would drop to just a few dozen yuan, with some newer extensions costing only a few yuan to register and renew. Compared to that, four hundred yuan per domain was astronomical—half a month’s salary for many.

He remembered that from 1999 to 2002, annual fees were around 120–160 yuan; from 2003 to 2012, they fell to 60–100 yuan, and thereafter hovered around fifty or sixty yuan.

That day, Zhou Xuan racked his brain thinking of all the future famous companies and checked, one by one, whether their domains were taken. By the end of the day, his head was throbbing from all the searching and the torturously slow internet connection.

He didn’t just check future big companies; he also looked up all possible two-letter, three-number, four-number combinations, as well as various alphanumeric mixes. As expected, many were already taken, but the full pinyin versions were still available, and Zhou Xuan registered them without hesitation.

“Huanyu” would one day be the name of his own company, so he made a note to find out who currently owned that domain and try to buy it back cheaply. Now would be the best time, since a decade later, JD.com would pay tens of millions for theirs. Suning, 163, Google, Facebook—all had registered their domains in 1997. If he’d only acted a year earlier, Zhou Xuan could have snatched them up. What a pity.

Still, many domains of future companies soon became Zhou Xuan’s treasures: Tianya, Sohu, Sina, Wanda, Baidu, Alibaba, Tieba, Huawei, Taobao, Weibo, WeChat, and of course, pinyin domains for hot industries like investment, finance, travel, rose, video, and more.

In 1998, an abundance of future premium domains remained unclaimed—a windfall for Zhou Xuan.

“With so many domains, when those companies are founded, the first place they’ll come for their domains is me. By then, I can either exchange domains for equity or invest cash for shares. After all, I’m targeting domains for companies destined to thrive. I should consider establishing a domain services company to manage this vast domain resource.

A good domain is truly invaluable for brand promotion. The best examples are JD.com, Xiaomi, Weibo, and so on.” With hundreds of top-tier domains registered, Zhou Xuan’s future income would be measured in the tens of millions—not to mention the influence he’d wield.

That day, Zhou Xuan registered several hundred .com domains, each one a gem, each one immensely valuable. At four hundred yuan apiece, he spent tens of thousands in total. Fortunately, the two stores had only cost a little over 150,000 altogether, so he still had seventy or eighty thousand left—otherwise, he wouldn’t have been able to afford it.

Domains aren’t like other goods; if you don’t register today, someone else might snatch them up tomorrow. Even though some domains wouldn’t be registered until 1999 or 2000, Zhou Xuan couldn’t know for sure—so he registered everything in sight, just to be safe.

From then on, he’d only need to pay a few tens of thousands a year in renewal fees and wait for the offers to come rolling in. Where else could you find such a good deal?

With the domain business settled, Zhou Xuan could finally start developing the hao123 website and the internet café management system. Hao123 would be straightforward—likely just a day or two of work—while the management system might take a week or two.

So Zhou Xuan decided to begin development after the final exams, aiming to finish before New Year’s Eve and enjoy a prosperous new year.