As part of a partnership with Fabulous.com, a business of Australian domain traffic broker Dark Blue Sea, the company will offer it customers the chance to buy domains from Fabulous’ 500,000-domain portfolio.

When a customer tries to register software.com, for example, they would not be surprised to find it is already registered and not for sale, but they will now be offered potentially related names owned by Fabulous, such as installsoftware.com or websitesoftware.com.

Go Daddy has been offering these domains, which are typically priced at between $400 and $5,000, as opposed to the usual $8.95, for a couple of months in beta, has been making several sales a day, according to Go Daddy vice president of corporate development and policy Tim Ruiz.

Go Daddy is a mass-market domain registrar, leading the market share race by some considerable margin, but has typically not involved itself in the secondary market to a large extent until now.

Not everyone is familiar that there’s a domain name aftermarket, he said. Our goal is to make aftermarket names available to our customers and take the whole concern about trust out of the picture.

The plan is to bring other domain owners into the system, from the largest domainer portfolio owners to the smaller customer that has perhaps only a handful of domains, Ruiz told us.

There are a number of massive domain portfolio owners out there. Companies such as Dark Blue Sea and Marchex have collections numbering in the hundreds of thousands. The names are monetized through advertisements related to the keywords in the URL.

Most large domain name owners’ primary revenue comes from monetizing their domain names, but some monetize better than others, Ruiz said. Their ‘long tail’ of names they start to sell after a certain point in time.

There is a school of thought that says this secondary market in domain names will soon become the primary market. Much like most real estate is pre-owned, most domain sales will ultimately made between one registrant and another, rather from a pool of never-registered strings.

Ruiz acknowledged that the secondary market is becoming increasingly important, but said that Go Daddy remains to be convinced that it will turn into the primary market in the short term.

There are still a lot of good names out there, he said.

Our View

There are not that many great names out there, at least in the .com namespace. One need only observe the barrage of oddly named Web 2.0 startups to realize that it is increasingly difficult to find a catchy, easily spellable .com that is not already owned. And if you’re looking for English dictionary words in your domain, best of luck to you.

Whether the secondary market does become the primary market, and on what timescale, may end up depending on which new top-level domains are introduced by ICANN, the domain name system’s technical and political overseer, and how popular they become with web users.

ICANN is currently requesting public comments on the processes it should employ to select the next wave of TLDs that will compete with .com.