Webwork - 2:22 am on May 11, 2004 (gmt 0)

Okay, nice formula M_M, but once again: As to each of those variables what value per unit do you assign, and please don't tell me 'that's the secret sauce'. The answer is likely 'a rough estimate', simply because the sample size of sold domains, as to each unique market interest, is limited.

It's one thing to articulate what to look for in a domain property, it's quite another to place an authoritative FMV on the domain. Yes, 'the formula' (criteria) helps to drive the conclusion/demand, but at the end of the day - currently - the market is still groping when it comes time for the buyer to rationalize the bottom line.

Other than the value assigned to type-in traffic - and heaven only knows how much of that is people looking to determine if the domain is taken, domain speculators looking to see 'what's up' and others looking to see if there's a website of any kind attached to it - the closest we have to a real metric is how well that type-in traffic converted into sales. Yes, raw traffic has potential value but the assumption of intrinsic value was proven to be a feigned calculus in the era of the dot com bubble. There were plenty of sites in 1999 that had lots of traffic that failed to produce a ROI.

Other than raw traffic that converts we have a lot of really neat analysis to play with, none of which yet defines value with any certainty. Past domain sales help to rationalize future sales negotiations but past sales do not predict future sales given the limited number of reported sales and the (relative) uniqueness of each domain.

Probably the best indicator of value is the size and interest level of the prospective buyer, and the skills of the seller in negotiating. ;-)