Value of parked domains

What multiple of income would you use?

[robho]

I have some domain names that are parked, with good traffic and reasonable earnings. I sometimes get offers for them.

Working on just the current parking income from type-in traffic and from large numbers of ancient links (i.e. stable traffic), how would you value them?

One years earnings is way too low, 3 years earnings was a ballpark figure a while back, but I see some domains are now going for more like ten years earnings (in an era of low interest rates, that makes sense IF you assume that clicks will remain valuable).

[Webwork]

It depends.

Does the domain describe something that will remain important for a decade? Shoot for 6 - 10. Fad domains? 6 months to 2 years declining revenue.

Is the traffic high value traffic vs. volume low conversion or low value traffic? Say Loans.com vs. Joke.com? Shoot for more.

Lots of variables to play with. Traffic multiples is simply one approach. What if you just picked up a domain that describes an emerging technology? Would you value it based upon today's traffic or would you attempt to project traffic 2, 3 or 5 years out?

The 3, 5 or 10Xs approach makes it easy for the buyer to assign a value for their convenience and has a certain plausible rationality, but it's hardly the definitive model for pricing.

I hold a domain that people love to type-in but it hasn't converted particularly well as a domain parking page. It would, however, make a helluva brand for an online weekly magazine or weekly specials site. If I used PPC conversion analysis at this stage then it's worth X. Frankly, I expect to someday be approached by a buyer willing to pay 100 or 1000 x X.

[Edwin]

If it's a generic, niche-defining domain that's generating traffic, then the sky's the limit.

What I mean is that if the niche is "widgets" (a commercially valuable niche) and you own "widgets.com" then the parking income is the cherry on top of the huge ability-to-control-niche cake.

[martingale]

In my niche someone has parked widgets.com with a bunch of totally irrelevant ads on the page. What a waste. I periodically send emails asking if I could buy the domain as I could surely put it to much better use, but I am not sure they are actually getting my emails.

Alas.

[robho]

If it's a generic, niche-defining domain that's generating traffic, then the sky's the limit.

It's a two-word generic term like bluewidgets, but the singular, i.e. bluewidget.com. I'm looking at a serious five-figure offer at the moment but it's still quite a low multiple of current income.

In my niche someone has parked widgets.com with a bunch of totally irrelevant ads on the page.

Same in my niche. They really are throwing money away.

[Luddite]

martingale:

Have you tried a phone call? They may have actually listed a real phone number in the whois data....