[Hidden-tech] determining the value of Domain names

[Jordan Lee Wagner]

This otherwise good article errs badly when it suggests that appraisals 
are worthess just because each domain name is unique. Paintings are 
unique, business brands are unique, and most non-new residential real 
estate is unique; yet appraisal by examining comps remains valid for 
them as well as for domains.   As always, expertise is needed to 
determine what renders two domains comparable, and how to adjust for 
their differences and for market changes over time. 

If you're marketing it to an end-user (a business that expects to own it 
as long as they are in business; like the buyer of a painting who 
expects to die owning it).  generally you need to consider how much 
money a commercial venture can make by virtue of owning the domain, 
compared to what they can do without it but with some other name.  But 
in domainer-to-domainer sales, which make the liquid "market", look at 
several factors, mainly comps and traffic. 

If you're accepting it as collateral, look at what names of the same 
extension (or weaker) with similar keywords in same industry have sold 
for.  If you are lending against rugs.com you surely know its worth at 
least as much as what PersianRugs.com sold for, and more than what 
rugs.co.uk and rugs.us have sold for.  And looking at domaining industry 
trends, you know its worth less than what rugs.com sold for three years 
ago. 

And it's probably worth nearly exactly the same as ANY other four-letter 
product-name dot-com that gets the same number of monthly exact searches 
in google, and that is a generic product of similar popularity in an 
industry the same size, competitiveness, and profitability as flooring, 
and that has the same percentage of OCI (online commercial intent) by 
those typing that product into google, and that has the same amount of 
type-in and AdWords bidding levels as the word "rugs".

If these five domains are truly high value, then they are already either 
developed or parked, and if parked should be generating a healthy 
income.  That income stream should be examined by the banker.

A decent appraiser would consider of all the above. 

There are some internet-based lenders who specialize in lending against 
domain portfolios.  If your friend isn't comfy with it, its probably not 
wise to accept a lot of exposure to this market. (There are also 
domainer-to-domainer auction venues where domain pros will make offers 
beforehand that you can either accept, or use as the basis for an 
auction, or do nothing.   This might be a way to establish a "floor" 
value at very little cost.  Or simply ask for informal vauations at any 
of the three big domainer-to-domainer forums)

Some professional appraisals of high value names come with good 
marketing advice and even prospects lists. 

HOWEVER:  Most domainers are delusional, imagining that their worthless 
stuff is the next hotel.com; so your banker might turn out to be the 
resented bringer of bad news.

Jordan Lee Wagner
Trupod Internet Services
domains at trupod.com
617-953-6787



Chris Hoogendyk wrote:
>    ** Be sure to fill out the survey/skills inventory in the member's area.
>    ** If you did, we all thank you.
>
>
>
>
> Sheldon Snodgrass wrote:
>   
>> Happy Spring Hidden Techies, 
>>
>> How can one determine the value of a domain name? 
>>
>> A good friend of mine, Luke Kettles, Senior Vice President at Chicopee 
>> Savings Bank is trying to determine how much value to assign several 
>> domain names that may be part of a collateral pool for a company that 
>> owns five domain names. He needs to know what the market would be or 
>> what value to assign.
>>
>>     
>
>
> The following site says fairly eloquently pretty much what I was 
> thinking in response to your question:
>
> http://www.igoldrush.com/domain-guide/domain-buying-and-selling/determining-the-value-of-your-domain-names
>
>
>
>   

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