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This 68 message thread spans 3 pages: 68 ( [1] 2 3 > >     
An Analysis of Factors Driving Domain Name Value
Print Media Advertising Buys/Costs, PPC Costs and Domain Traffic & Marketing
gopc




msg:3137825
 6:47 am on Oct 28, 2006 (gmt 0)

<Moderator's Note: I've made the following post by GoPC, originally inserted in the Domain Auction Thread [webmasterworld.com], a standalone thread with its own title. The message presents an interesting analysis - one that required a bit of effort - and deserves closer reading and consideration.>

"Has anyone actually seen any studies that demonstrate these domains are actually worth this much?"

Good Question but it's really a matter of ecconomics. I sell advertising space in over 600 Publishers worldwide... Magazines like Better Homes & Gardens, Road & Track, and Cigar Afficionado... let me tell you, Domains offer a much easier breakdown of value.

Better Homes & Gardens charges $365,000 USD for a single, full page ad, first 1/3 of the book... EVERY MONTH. If you've never glanced at a BH&G magazine, pick it up sometime and start counting how many full pages you have to flip through to get to the FIRST PAGE of content! Then do the math... MILLIONS of dollars every month in advertsing.

And I ask you, for what? Exactly how much traffic does your product, good or service actually get for the $365,000 Bucks? Moreover, WHO are you sharing that magazine with? How many 1000s of other ads are in that book?

In the business, we measure things in Cost Per Impression. The higher the cirulation, the more money you can charge for the ad (size, placement, etc) because the "odds" are better for a actionable reader to convert to a sale. BG&G has huge readership so they can demand those kinds of numbers.

Boil that down to a DOMAIN and you have quite a different oppotunity.

1st, most companies are buying PPC ads, Pay Per Click advertising that they only have to pay for when/if a viewer physically visits their website through an ad. This is good because the ads tend to be contextual so the traffic the advertiser sees is VERY focused on their product. It's also good because while many more people see the ad than actually click through to the webpage, you only pay for visits... so impressions are FREE.

2nd, These cpmpanies BID on those ads... The focus their ad budget on "key words" which is how the ads are contextually focused. The better your keyw word marketing, the more qualified, actionable traffic your website gets and the better the odds of a purchase.

Stay with me, I'm getting to the answer.... ;)

Now, these AdWords COST... per click. Parking sites (that pay the domain owners that host the ads) get their ad feeds from companies like google that sell the adwords. The Domain owner, after Google and the Parking Site get's their cut, will get as little as .03 cents per click, but may also see as much as $15 per click. What you get is dependant on alot of factors which I wont go into now, but suffice it to say, when the domain owner gets a $1 click, the advertiser probably paid nearly $3 for it.

So... $3 per click, 5,000 clicks per month, that advertiser is paying $15,000 per month for EACH KEYWORD he is advertising. That's a SMALL advertiser... Think bigger... like:

Cannon, Kodak, Olympus... Camera Manufacturers. These guys buy MULTIPLE keywords that charge perhaps $5 or more per click on sites that get potentiall MILLIONS of visitor and tens of thousands of clicks per month.

Another quick scenario might put Kanon's ad budget for PPC somewhere around $600K - $750K per year... or MORE?

If Kodak were to BUY the domain, Cameras.com for $1.5 Million Dollars, they would break even on the ad budget in only 2 years... but something more important happens... this is where we break away from the Magazine Ads and Googles Adwords and TV and Radio and print...

Once they own the domain, they get 100% of the traffic... ZERO competition for the sales conversion of literally Millions of new customers that come in year after year after year.

How much is a Standard or Digital Camera? Say it's $500 bucks. Say it only $100 bucks... Is it conceivable that with those millions of new, exclusive, highly targeted customers they now have, that they might... just might... sell 15,000 Cameras in say, the same 2 years?

If so (and you so know it is) that company just DOUBLED it's investment in buying that domain for $1.5 Million USDollars.

They've MADE MONEY by purchasing that crazy, overpriced digital roadsign to the virtual super highway.

And it's worth EVERY PENNY.

I wish that selling print ads were this easy.

GoPC

[edited by: Webwork at 3:13 pm (utc) on Oct. 28, 2006]

 

fischermx




msg:3138590
 4:00 am on Oct 29, 2006 (gmt 0)

Sometimes I wonder why we keep trying to convince people about the value of domains.
Each time I see an exceptic comment on domains, I just think, "good for me", "less competition", "there are enough domainers already" and the like.
If someone want to think domains are overpriced, be my guest... ;)

gopi




msg:3138672
 6:52 am on Oct 29, 2006 (gmt 0)

The whole domain monetization business depends on the 15% or so of the online public who types a keyword domain name directly in the browser instead of searching for it, right?.

So the question is does today's domain valuations take into account the risk that the browsing habbit of those people's can change overtime (especially with the new IE7 search box and the ever increasing toolbar distribution thro the OEM's).

Webwork




msg:3138842
 1:16 pm on Oct 29, 2006 (gmt 0)

risk that the browsing habbit of those people's can change overtime

Gopi, in that case BlueWidgets.tld will still serve rather nicely as a memorable and easily marketable website address, especially for a website about "blue widgets".

No matter the future type-in, logical, addresses - where the web address is the website subject matter - work.

That's the charm of the generic subject matter, natural addresses . . I mean domains . . I mean domain as marketing advantage . . I mean webaddress marketing. ;0)

YMMV, but I believe the noise about "brand over natural address" is slowly diminishing. PPC is helping quiet the noise. Simple logic, too, is taking hold.

[edited by: Webwork at 4:32 pm (utc) on Oct. 29, 2006]

jomaxx




msg:3138978
 5:44 pm on Oct 29, 2006 (gmt 0)

I don't think the value of the super-high domains is driven by type-in traffic at all. Somebody probably already made this point, but the value of cameras.com is the likelihood of being able to reach #1 in Google for the keyword "cameras".

I don't know if that's how the buyer will monetize the domain, but if you created a digital photography portal that could draw plenty of natural links, getting to #1 is a very plausible goal. In fact cameras.co.uk is #1 right now.

zulu_dude




msg:3139483
 8:06 am on Oct 30, 2006 (gmt 0)

Are there any studies done as to how much impact the domain name has on ranking in the search engines for that phrase?

For instance, how much more effective would widgets.com be, in comparison to mywidgets.com (when trying to rank for the search phrase 'widgets')?

There are many threads about having your keyword/phrase in the domain name, but is there massive advantage gained in having your keyword as the domain name?

If there is, then surely 'buying' the first position at Google (and the other search engines) straight away makes the domain much, much, much more valuable than just the type-ins? If you were a camera retailer spending $15,000 a month on adwords for that phrase, then in the long run, cameras.com would pay itself off just on PPC savings over 10 years.

rocker




msg:3139626
 12:02 pm on Oct 30, 2006 (gmt 0)

Better Homes & Gardens charges $365,000 USD for a single, full page ad, first 1/3 of the book... EVERY MONTH.

A 30 second ad during the Super Bowl costs over $2 million.

The only ad I ever remembered was the GoDaddy ad with Candice Michelle, and that's only because of all the controversy it caused, well mostly because of the controversy it caused :)

trader




msg:3139989
 4:53 pm on Oct 30, 2006 (gmt 0)

I find it incredibly frustrating that most corporations fail to realize the amazing value in owning a domain name, which gets free traffic forever for less than $10 a year renewal fee!

Have dealt with big corporations who act like anything more than 1k is a ton of money, yet the same company will not hesitate spending $365,000 on a 1-page ad in a magazine, or say $25,000 to $100,000 in the newspaper for only 1 day of exposure.

About 6-yrs ago I reg'd a generic sounding non-trademarked dot-com keyword name and a year later I was surprised to see a very well known giant telephone and cell phone company name an important consumer division using the same exact words. Soon they called asking me if they could buy the name, offering to pay an insignificant $1,000 maximum. When I said that was far too low they turned negative and never heard from them again and still have the small website online today, 5 yrs later.

Yes this same corporation had more than a billion dollars a year in revenue and I am sure they also spent hundreds of millions on marketing and advertising. What idiots they are when they could have got my name for say 10k at the time, which is like their petty cash fund and totally insignificant to them.

gopi




msg:3141550
 9:42 pm on Oct 31, 2006 (gmt 0)

>> Gopi, in that case BlueWidgets.tld will still serve rather nicely as a memorable and easily marketable website address, especially for a website about "blue widgets".

I agree a good domain will give you a natural branding and a perceived authority but i doubt that today's type-in traffic would continue the same in the coming years.

Durham_e




msg:3141891
 6:10 am on Nov 1, 2006 (gmt 0)

i doubt that today's type-in traffic would continue the same in the coming years

would be very interested in any elaboration of that theory.

Thanks

gopc




msg:3144702
 8:32 am on Nov 3, 2006 (gmt 0)

Trader wrote: "I find it incredibly frustrating that most corporations fail to realize the amazing value in owning a domain name, which gets free traffic forever for less than $10 a year renewal fee!"

Therein lies the great expanse between Domainers and End Users.

You have nailed the point for these Corporations who, by the way, did not find their way to making Billions of Dollars by spending foolishly.

And what was that point? $10 a year.

Two things that I believe are hurting the assimilation of Domains and Corporate Sales...

1 - The perception that a domain costs $10 a year and there is no way to justify spending 6 figures or more on a $10 item, regardless of traffic or potential.

2 - Education. For 200 years, the Marketing world has seen things a certain way.... Perfected really. Domains are beyond their comfort zone at this point and alot will need to be done to cross that chasm.

One of the biggest disconnects that I see is that in the Domaining world, a world where "generic" domains reign supreme, you see the black and white label getting the premium prices. In their world, the black and white label is the bottom of the barrel. As simple as it seems, that small detail will be difficult for the Corporate World to wrap their minds around.

It's not impossible, we just have to meet them at their level.

At TRAFFIC east, Rick Schwartz (The Whale) co-founder of the event and recognized vetral of the Domain Insdustry, sat quitely through the introductions and explanations of the four Madison Avenue Ad Executives that were invited to share the Ad Game's take on Domains. After they concluded and opened the floor for Questions, Rick was first to the mic with a question that, for the most part, amounted to "You'd have to be stupid not to see the value in Generic Domains".

He gave as his example, Hotels.com and pointed out why Madison Avenue had FAILED its clients by not securing the generic term "Hotels" for perhaps Marriott, Hilton or the Westin. His reasons were virtually identical to Traders comments I copied at the top of this post.

Having noticibly set the expert panel aback, putting them on the defensive, they simply tried to convey the fact that they prefer statistical information, Demographic Profiling and cost/ROI analysis of any direction of marketing and marketing so generally doesn't deliver the targeted, actionable impressions that their current forms of advertising does.

The challenge is to get them from this manner of thinking to understanding the value a domain brings to them, as I suggested above.

The objection always will be the inability for Domain Traffic to be as focused, as targetd, as qualified, as cost effective as demographically prepared media (print, TV, film, Radio, etc).

That's why BHG can charge $365K for an ad... because they can tell the Client information about their customers right down to their hair color, the car they drive and what they take in their coffee.

To that end, we must understand what it is they are looking for and present our domains in a way that answers those objections before they become part of yor negotiations.

They will not just part with big money for a domain because they CAN... they'll do it for the right Return on Investment.

As with the Madison Avenue boys, Presentation is everything.

Just my .02 cents worth.

GoPC

fischermx




msg:3144987
 3:04 pm on Nov 3, 2006 (gmt 0)

I find it incredibly frustrating

Funny, I don't.
I find it extremely relaxing thinking that normal mortals can enter this game withouth having millions of dollars to spend.

Ooh, wait a minute, I see it, is it frustrating because you can't sell your generics in millions to these companies?

Well, well, enyoy your parking income or create an affiliate site. One day, they will try to buy it from you.

vite_rts




msg:3145033
 3:28 pm on Nov 3, 2006 (gmt 0)

Since these 2 threads came up, i've been buying domains frantically, by my standards anyway, they'd better be worth it , or,,,

Anyway, can I ask you guys

What impact does the domain extension have?

is
cameras.com, worth more than
cameras.net
cameras.org
cameras.biz
cameras.info
cameras.bz

Bearing in mind the comment that Search engine positioning advantages might be involved, could their worth be up to 20% of the cameras.com?

And , no, I did not get these ones, alas , sigh!

fischermx




msg:3145101
 4:01 pm on Nov 3, 2006 (gmt 0)

This is my chart, scaling from 0 to 100.

example.com 100
example.net 70
example.org 50
example.info 40
example.biz 15
example.mobi 10
example.bz 5
example.ws 2
example.cc 1

This chart may vary for each domain.
Of course there are many factors to consider. There are names which due its nature one extension may be more valuable that the .com.
For example, sometimes .org its more appropiate, let's say donations.com vs donations.org.
Some other times .net make sense. I see a lot of .net use on website related to microsoft .net technology, even when the company also has the .com, they promote the .net, just because it sounds dot-net. For ISPs and Hosting companies, I see a lot of use of .net too.

Now, .info is ugly and large, but for many cases it has a lot of sense and domains can worth a lot.

.mobi is too new to give any real value. The only hope is that sponsoring companies make it take off.

.Biz is synonymous of spammer for power web users.
.Bz is for Belize, a country code.
Funny extensions like .ws and .cc are worthless unless in a premium domain. At least .ws make sense in the way they promote it for Web Site. But .cc, what the heck is supposed to mean?

And there are the country codes ...
All premium generic domains have some good value in the country code equivalent, the more powerfull country, that most valuable are the domains.
I think the most valuable country code are .uk, .de, .jp, and some others.

gopc




msg:3145131
 4:29 pm on Nov 3, 2006 (gmt 0)

vite-rts...

In short, a big sale of a keyword will boost the value of all the extensions simply because there are a 1000 people like you doing the same thing... trying to capitalize on it.

This is a "flip" opportunity for these owners to sell the domains at a time when some outside influence has inflated the value to some degree.

Traffic can be affected as other domainers and the market looks to see what else might be availble, but it is really only the ripple effect of the sale... It wont necissarily translate into converted traffic (PPC dollars).

It would be considered a "perceived value" sale and the window of opportunity is pretty limited.

Good Luck

vite_rts




msg:3145173
 5:11 pm on Nov 3, 2006 (gmt 0)

I'm all for jumping on bandwagons, if i can see some value there an my own limited experience suggests that Keyword domains seem to outrank their "business betters/superiors" , generally in all 3 main search engines

So I was already kinda committed to using keyword domains

But, they seem very hard to brand, I've been observing a few of them, and they seem to reach a certain level , then 1 or 2 branded sites overwhelm them

But, crucially, it seems that on average, more keyword domains grow into low level successes than pure madeup brand names which have appear to have a vastly greater rate off failure

Hence, I am hoping to develop a flotilla of little successes,

Having said that, should the big offer come our way ,,, :-)

trader




msg:3145718
 5:55 am on Nov 4, 2006 (gmt 0)

Here is my general value chart scaling down from 100:

example.com 100
example.org 15
example.us 10
example.net 8
example.biz 2
example.mobi 2
example.ws 1

ccDan




msg:3156437
 6:07 pm on Nov 14, 2006 (gmt 0)

Single word domains are going to inherently have significantly more value than multiple word domains. You might get thousands or hundreds of thousands (or more) dollars for a single word domain name, but you won't get anywhere near that for a multiple word domain.

When you add a second word, the options expand significantly. If GreatWidgets.dom isn't available, you can try BestWidgets.dom, or GreatestWidgets.dom, or CoolWidgets.dom, and so on. So, the value of the multi-word domains decreases exponentially by the number of words you add.

An exception might be regional domains, such as citywidgets.dom, but those will inherently have less value, because then you're working with a smaller pond. Widgets.dom has mass, multi-regional (or even national or international) appeal. Citywidgets.dom restricts it to a much smaller demographic.

The size of the city would play a role as well, with a larger city likely fetching a larger sum than a smaller city domain name. MetropolisWidgets.dom will fetch more than SmallvilleWidgets.dom for that reason.

But, the bottom line is that a domain name is only going to be worth what someone is willing to pay for it, or what you can earn off it if you are the registrant. SmallvilleWidgets.dom could conceivably fetch a higher price than MetropolisWidgets.dom if no one in Metropolis wants to buy the Met domain, but someone in Smallville wants the Small domain.

For people that think they have some valuable domain names, a rude awakening may be in store if you offer them for sale. It is a lesson that I am quickly learning. I have several domains that I felt were worth hundreds or even thousands of dollars--all .COMs--based on the fact that, if you were better at marketing than I, you could recover your investment in a short span of time. But, even with the apparent new boom in domains, I can't get even get anyone to offer fifty bucks on any of them. (Not that I'm sure I'd sell them that low anyway...)

gopc




msg:3156672
 11:12 pm on Nov 14, 2006 (gmt 0)

I think you are looking at this, Dan, from the perspective of a Domaineer and not a Business or an end user.

For example, your point about using more words making a domain LESS valuable...

When you search via Google or Yahoo... do you type in one word (such as Camera) to begin your search? Perhaps... but then do you not add another word or even start with the words "digital camera" to further define your search criteria or even use the phrase "Kodak Digital Camera" to get and even more pointed search and focused results?

I know I do.

When I go looking on the internet for a product, good or service... I try to focus my search down as tightly as possible to avoide the 350 Million search results that don't neccessarily focus on my needs.

Domaineers may see the traffic from someone typing in "camera.com" versus GOOGLE.com but then what? Where does that customer go? Do you even KNOW? As a traffic'er or domaineer, you don't care so long as they clicked something to get there.

As a BUSINESS, you absolutely care because you want someone focused on YOUR product versus someone elses. So for Kodak, "Kodak Digital Camera" would certainly be worth FAR MORE than just "cameras" because they are getting a more focues, more motivated, ready to buy, brand driven website visitor.

This may sound like I am contradicting my original post in some ways but I'm really not... I'm just pointing out the perspectives that may need to change to get the corporate theory to meet the Domaineer theory a little closer to the center.

The simple truth is that if an established company wants to brand a product, good or service and send that traffic to "buyagoofypurplecamerabykodak.com"... they can and they will.

They don't build a market around a domain, they build the domain around the market. Branding is SPECIFIC in creation and execution and the more words you use, the more focused that branding becomes.

Search engines get a higher and more focused relevance to multiple word/phrase input and that's the only real truth these guys see.

So why then, believing what they do about branding and domains, would they want to pay MORE for a domain that encompasses traffic that is not their and never will be? Why don't they then just sell advertising in EVERY magazine?

Focus.

One word domains DO NOT have focus unless they are branded words such as YAHOO or GOOGLE or DELL.

That is the gap and the bridge we must build.

GoPC

vite_rts




msg:3156689
 11:38 pm on Nov 14, 2006 (gmt 0)

i didn't get that gopc,

Cameras.com is not focussed , per your words

But the reason that a big camera company would buy cameras.com is

focus

what do you mean?

I thought that originally, what you where saying is that they buy cameras.com to keep any potential leads for themselves,

gopc




msg:3156704
 11:55 pm on Nov 14, 2006 (gmt 0)

Read it again... I pointed out that it would sound like it was in conflict. LOL!

My point is that what IS is opposite of what I proposed it should be. We need to educate and turn corporate marketers in the direction of capitalizing on more generic traffic.... which they do not currently.

If we CAN get corporate buyers and marketers to embrace the generic, then we can show them a way to capitalize on the greater potential.

I not trying to play Devil's advocate, just pointing out the differences between what is and isn't the corporate mentality... pointing out that there is a significant difference in the way both parties think about Domains.

Contrast.

GoPC

ccDan




msg:3156896
 3:59 am on Nov 15, 2006 (gmt 0)

For example, your point about using more words making a domain LESS valuable...

When you search via Google or Yahoo... do you type in one word (such as Camera) to begin your search? Perhaps... but then do you not add another word or even start with the words "digital camera" to further define your search criteria or even use the phrase "Kodak Digital Camera" to get and even more pointed search and focused results?

Focus also means fewer. If I'm a bulk mailer, a non-targeted list is going to cost less per name than a targeted list. I will want the targeted list to reach just the right people. I will pay more per name for that targeted list than I will for the mass list. But, my overall costs will be less, because I'm contacting less people with better targeting.

That would have to extend to domain name value as well. If I have cameras.dom and only sell 35mm cameras, the traffic from people wanting digital cameras isn't going to do me much good, right? But, I can partner with, or refer to, someone who does sell digital cameras, and still monetize that traffic. Thus, cameras.dom is more valuable than digitalcameras.dom. Digitalcameras.dom may be more targeted and probably won't get (as many) people looking for 35mm cameras.

But, still, it's going to be less. A smaller pool. That's not too say they can't make good money, but I still don't see that it's going to be a more valuable domain than cameras.dom.

With cameras.dom, you can sell 35mm cameras, you can sell digital cameras, video cameras, still cameras, movie cameras, etc. You can be the Wal-Mart of cameras. Digitalcameras.dom can't be all that.

gopc




msg:3156994
 7:12 am on Nov 15, 2006 (gmt 0)

You are absolutely right... from a domaineers perspective. What if you are Polaroid though? What if you are Fleer?

If I were a camera retailer, certainly cameras.com would be a terrific buy... but if I were a manfacturer, would it still be?

That is the obstacle for domain sellers to overcome.

Focused doesn't mean "fewer" as much as it means "actionable". Dollar for dollar, a Manufacturer or Corporation is more able to justify spending an advertising budget on a focused and active target audience than mass marketing to people unlikely to buy in their niche if at all.

As a manufacturer or a product branding corporation, I would spend my advertising dollar ONLY in attracting the demographic unique and specific to my product, good or service. Spending that dollar to encompass customers outside of my target demographic is a waste of money. Wasting money to attract customers that I do not service may also detrimental to my image as I now have unsatisfied customers NOT finding what they arrived for.

Thus the argument for focued, targeted traffic. Why doesn't Southerby's let anyone into a auction? Why does high stakes poker have a buy-in? Why do Coporporate Customers only buy ads in certain magazines?

To focus the message to the individual most likely to buy.

That is and will continue to be the argument from the established marketing companies and over 200 years of advertising logic.

It's a tough haul, no dobut about it. I whimsikly asked why couldn't selling print ads be this easy... it's not easy. But it does make sense. IF, I say IF you can get someone to shake loose those 200 year old chains and look at domains as more than simply a digital sales brochure.

GoPC

karmov




msg:3157215
 1:40 pm on Nov 15, 2006 (gmt 0)

Absolutely delicious thread. There's enough meat in here to feed a football team. Gopc, you're my hero of the month.

I've been struggling to completely understand the recent bids myself. I couldn't quite figure out how these domain names were worth that much money given the way I do business but that was my problem. They do business on a completely different scale. I knew it had to be worth it because people who have that much money to spend don't get there by making ridiculous choices, but still had a hard time wrapping my head around it. This thread has helped tremendously. Now to crunch the numbers on 1.65 billion...

ccDan




msg:3157351
 3:14 pm on Nov 15, 2006 (gmt 0)

That is the obstacle for domain sellers to overcome.

The only way to overcome that obstacle may be to show rather than tell.

I have three auctions going right now.

Two of them are for domain names. One is a [region][topic].COM domain. The other is a short phrase, which includes the keyword, and is a .COM. I think the regional domain would be worth at least a couple hundred dollars, easily. I estimate the short phrase domain to be worth at least a couple thousand, based on my estimation that if you built a decent site and got traffic to it, you could likely make that money back in 12-18 months.

So far, no takers. No bids at all.

The third auction is for a web site. Two word domain name. The web site is fully built, just needs content and traffic. As it is, it is barebones and turnkey, but fully operational. Already have two interested parties, one of which has placed a bid.

The web site, barebones though it may be, is proof of concept. The buyer can look at it and see, yes, I can build on that and promote it. The template is there, the setup work is already done, they just have to do the grunt work and get it going. Like furnishing a new home.

Perhaps that's the better comparison. A web site is like a home. A domain name is the lot. Not a lot of people will buy an empty lot. They don't have the means or ability to build a new home. They need a home that's ready to move into. When they see an empty lot, they see a lot of work ahead of them. With a house, all they may need to do is paint and move in furniture. Maybe they'll buy a fixer-upper, but they see ahead of time the potential in the existing house and know what to do to make it livable.

davidof




msg:3157564
 6:19 pm on Nov 15, 2006 (gmt 0)

> A domain name is the lot. Not a lot of people will buy an empty lot.

Not quite, you can park the domain and see how much type-in trafic comes and see how much you earn of that. Using bricks and mortar valuations then say I had bluewidgets.com, I get 1000 visitors a day, 10 click on advertising paying $1 a click. Thats $10/day or $3650 year. I suggest a value for that domain at around $20,000.

Why?

Because if you buy the domain after 5 to 7 years you are pocketing 3 grand a year for doing nothing at all. Of course tastes may change or ways of accessing the web may develop so you may apply a modifier if the domain is for some trend keywords like "cabbagepatchdolls.com". The x7 multiplier is what is commonly used in the real world, someone here may suggest a better value but even in the fast moving Internet world it has to be at least x2.

Anyone could buy that domain, build a real site, do some SEO and increase the traffic and make more money. If you actually sell bluewidgets the domain would be worth a great deal more to you.

So I don't think it is that hard to value domains. Buying anything is a risk, I'm not sure why businesses get all scared when it comes to the virtual world.

Regarding the question above on widget.com vs mywidget.com, widget.com is worth a lot more because lots of people link with just the domain name, this gives you a massive anchor text boost. Keyword domains rank well because the keyword will feature in the inbound links _NOT_ because the keyword is in the domain (well except on Live.com!).

lexipixel




msg:3157665
 7:38 pm on Nov 15, 2006 (gmt 0)

I get 1000 visitors a day, 10 click on advertising paying $1 a click. Thats $10/day or $3650 year. I suggest a value for that domain at around $20,000.

Not sure where you get the math, but I've understood the value to be 12-24 months of earnings.. In your example, the parked domain would be valued at $3500 to $7000.

fischermx




msg:3157677
 7:52 pm on Nov 15, 2006 (gmt 0)

It's not a rule.
There are domainers buying up to 6-8 years revenue.
Some at 2-3, all depends on the kind of traffic the domain gets.

davidof




msg:3157680
 7:57 pm on Nov 15, 2006 (gmt 0)

> It's not a rule.

fair enough, I was just suggesting that it is not impossible to value a domain in some kind of logical way rather than sticking a finger in the air.

fischermx




msg:3157715
 8:18 pm on Nov 15, 2006 (gmt 0)

davidof: it was for LexicalPixel because his comment of
"the value to be 12-24 months of earnings"

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