"Investing" is usually a long term venture where prospects for future gain/profit are quite high. Take for example buying "Doors.com". A solid generic product domain with a 25 year old, highly branded extension behind it. Future prospects of selling this domain at a higher price than you paid for it are very high. Thus you have a good" investment" for the upcoming years.
.so, on the other hand, is speculation, unless you have the very best keywords. If you have THE best keywords, that would be like an investment because the market is liquid with the top-top keywords. Any other registrations with .so would be speculative. Unheard of extension, no marketing and tough competition (ie .com, .net, .co etc). If you put big money in .so, you are actually "hoping" or trying to predict a totally uncertain future. Speculating always has a very high degree of uncertainty and risk. .com, on the other hand, is not uncertain because of it's history. It's like old real estate and thus a good "investment". Almost every new extension will be speculative, IMO, so choose wisely.
.Co, IMO, stands somewhere in between. The fundamentals are so good that it offsets its relative youth (although this extension had a demand 15 odd years ago and brings a lot to the table). I consider .CO an investment rather than a speculation, based on fundamentals.
Hope that helps.
I would say the level of risk makes the difference.
Example #1: you buy a strong domain in an established extension, say quotes.com.
It's a domain that is already worth something today. Most likely, its value will appreciate over time.
In case of a financial emergency you can even liquidate it today, possibly at a loss but it's better than nothing.
This is an investment.
Example #2: you buy solid .mobi or .co keywords because you believe you think these extensions still have a chance and they might become more fashionable in say the 5 or 10 next years.
But right now they are illiquid (hard to resell) and tend to be liabilities because of the upkeep (renewal) costs.
This is speculation.
Example #3: you buy domains in junk extensions such as .so or .tel.
This is throwing money away, because I don't see how those names can really be worth something one day.
It seems that what we see as investment and what as speculation is very subjective.
When Ostrofsky bought Business.com for $150.000 in 1997, people thought (especially the "serious investors"): "only an idiot would pay so much for a domain name". He had to hide his identity as buyer in order not to disqualify himself as serious businessman.
Investing in domains (and .coms were probably the only domains people invested in at that time) were DEFINITELY considered speculation, although it turned out to be a much better investment than the type of investments which people called "investments" in 1997. By the way Ostrofsky sold Business.com two years later for 7,5 Mio$
Today you consider buying .com as an investment, while for example real estate investors still consider buying .com as speculation.
So it is a question of the subjective risk assesment and the subjective valuation of the potential roi, what we consider to be investment and what speculation.
It looks like "investment" is what the mainstream does (or what the writer does) and speculation is what the others do
By the way LONG TERM "investments" in regard to internet are extremely risky, so they dont deserve the name "investment" according to your definition. To realize this just compare the internet in 1995 with 2011 - nobody can say how internet will look like in 2025.
Note that for people who bought or registered .com domains in early days (for investment) these domains were liabilities for a long time before there appeared any monetization possibilities. And despite that exactly those investments were the most profitable.
Now let's take a REAL scenario in order to compare investing in .com or .co using your definition of risk and possible profit:
Take 10.000$ you can afford to lose.
1) Would you invest in ONE third range .com domain (with a possibility to flip it for 20.000$ or maybe 30.000$ in a long term if you are lucky)?
2) Or would you prefer to register 400 Top .co domains in landrush with a possibility to sell each of them in the first year for $10.000 (see the sedo auction), or maybe for $100.000 in a long term?
Which action bears more risk? Which action constitutes more chances, higher possible profit? Which choice deserves the name investment, and which speculation?
