Your question was: Where do sites like godaddy and network solutions get their domains from?.
Depends on your long term plans and interests. Most of the really good domains are taken, so entry barriers are high compared to development..
I do get offers by email for some of my better names, but at present the selling/buying procedure is not streamlined, so you waste a lot of time...
So till now from two opinions development is good...
No matter what you do you have to work. You cannot simply buy a HostGator and call yourself a domainer, or put up a site and call yourself a developer. It takes time to work things about but in the long run I would say developing is far more worth it...
Have to echo the statement about having to work. Nothing will be handed to you regardless of which path you choose. Also, nothing stopping you from doing both.
I'd suggest spending your time doing whichever you enjoy most. Your passion will show in what you do, and success will surely follow...
Pure domaining is buying and selling and understanding the market. It's pure trade and you need a good business sense. I found that I'm not that well cut out for that, and started doing more and more development instead.
Domaining and development are two different ways to make money, but a combination of these two I've found is the way to go.
Domaining and developing is a good combination, because as a domainer you understand the value and SEO advantage of keyword domains. This helps to gain success in development. Keyword domains produce fast SEO results.
I develop mini-sites (1 to 5 pages of content) for those domains that have had no buyer interest and do not produce parking income, and then perform SEO. I've found that each developed and SEO'd keyword domain/website increases my income by a little bit. Then I repeat that with another name, and the rest is just math. Say one developed site makes $5 per day, just make 100 of such sites and you'll have a cool $500 per day income. Plus the occasional sale of one of your domains, and you could be looking at a decent income.
Of course, all my domains are still listed for sale, but the price has gone up especially if the minisites are on the first page of Google for their keyword.
My websites are not making me a living, but gradually the income is building up, and here we come to what domainer50 said: It takes work.
I'd rather just buy cheap HostGator names and sell them at high prices, but it's very hard to do that. Developing is a safer bet, but again lots of work...
Depends on your own skill level and the amount of time you have.
I'm a full time student, so I don't really have the time to develop websites. I don't have the knowledge either, and I'm already full up reading Shakespeare to take out the time to read Website Development For Dummies.
So I stick to trading. It requires a lot less time and I still don't have any monthly income, just what I get from sales. But it's still worth it.
Gauge yourself. What do you know better? Are you good at negotiating? Can you convince people easily? Are you a smooth talker? Good on the phone? Are you good at bargain hunting, keep up on the trends?.
Or are you good with programming? Know AdSense like the back of your palm? Can you put up a damn good looking page in 2 hours? A Picasso with photoshop?.
It varies from person to person...both routes are definitely worth it...
According to me I have a passion and am good about developing..
Great answer and spot on.
Just one more thing i've seen. When you develop an application based site and put it for resale, be sure to develop the site using tools more prevalent amongst "domaining developers", as you will mostly be looking to resell to them.
For example, I am a .net framework developer and I saw great difficulty selling my sites developed in the same. I am right now learning php and thats what most HostGator developers use; so it becomes a little easier to find buyers...
HostGator is like the land, it will appreciate if you hold on it without doing any work. Development is to plant some grain. More work needs to be done for development. In a capital world, it is better to own the land (the domain) than to sell your labor (the development)...
That's true probably at least for the premium domains. I've found that I can increase the value of lesser domains (say, keyword.info) by getting them indexed and ranking high in the SERPs. Of course, it takes extra work and is time consuming compared to just owning and parking the domain.
To continue your analogy, a farm with full fields of corn is more valuable than a farm with empty fields, unless the latter is truly in a premium location.
But yes, I agree, I would rather just own and park premium domains than develop. However, I can't afford to purchase a portfolio of premium domains, but by developing my domains I am getting income that helps me to buy a premium now and then.
My strategy is to use the parking + adsense income to buy better domains and use the money also to buy web development services. Once you get the thing going, you can sit back, buy good domains, have someone else do the development, and use the increased income to buy even better domains and more development.
Just for the record, EstiBot.com is not part of my above strategy - it's my pet project and I'm doing it because I love doing it, and it's not for sale.
There is no easy way in domaining and in development.
But I have seen some good development people and some good domaining people who are making good money out of both of them.
It really depends on what you are good at..