Domain Name Values
Understanding Market Value For Premium Domain Names
When considering domain name values there are many factors to consider. Domain names that are short, category defining and meaningful are rare. They are highly memorable in advertising and easier to brand. They are in high demand. These types of domains are called premium domain names.
One factor to consider are the keywords that make up the domain name. Are these keywords that a consumer would enter into a search engine? How many searches use those keywords each month? How many advertisers are bidding on those keywords on Google?
You can also get a sense of market value by looking at comparable sales. Comparable sales do not need to be in the same category, but they should have comparable weights in other aspects such as popular keywords and search volume. As one example to illustrate ‘similar weights’, consider the comparisons of comparing NYC to Los Angeles and NYC to Lilleville. The NYC/LA comparison would have similar weights whereas the NYC/Lilleville comparison would not.
Sometimes domain names sell on the secondary market. For example in 2010 invest.com sold for 1 million USD. In 2014 it sold to another buyer for 5 million USD. Premium domains are rare and usually increase in value over time. Secondary market sales are another important factor in determining the value of a domain name.
Domain name valuation is both a science and an art. It is primarily data driven with some digital advertising sensibilities mixed in. There are several respected third parties that provide domain name appraisals and have the expertise to evaluate market values. There are also online tools that offer free, automated valuations; however these are rarely accurate. If you are serious about making a premium domain name purchase, it is worth paying a small amount to get an informed, high quality appraisal. Most companies charge $75-$100 for an appraisal.
Sedo.com – Offers domain appraisals. Thies Lindenthal, the founder of IDNX, also developed Sedo’s valuation products and trained their appraisers in his valuation methodologies. They are well known for their high quality appraisals.
Afternic.com – Offers domain appraisals. Afternic is owned by GoDaddy and has access to the largest database of domain sales. This company also offers high quality appraisals.
Registrars – You can also speak to a .Homes domain name registrar about premium name valuations. They sell thousands of domains and have a good sense of their values. Although traditionally registrars don’t focus on premium domains such as Sedo and Afternic, they do have a good understanding and should be able to provide guidance.