Buy land, they’re not making it anymore. – Mark Twain.
This logic is applicable to any asset where the supply is limited, and the demand is ever-lasting. In the last quarter of a century, we have seen virtual assets create billionaires, rewarding their foresight to buy and hold online real estate ahead of everyone else.
Oil or gold or timber were the rages in the 1850s. Today NFTs or crypto assets are the coolest kids on the block…
In the 90s, domain names were the open-range land parcels of the internet.
Let’s see what a domain name is worth…
There are over 360 million domain names registered globally with 5 million new domain names added annually. Creating a unique marketplace for traders, investors, and speculators.
There are THREE things to consider when valuing a domain name.
- Extension. .com is better than .net or . co. Or relevancy on both sides of the dot is better. For example home. loans are better than home.XYZ
- Length and Specificity. Shorter the domain the better. barbershop.com is more valuable than jimsbarbershop.com or barbershopboston.com
- Relatable. Does your domain name have brand recognition? Or does it contain a household keyword or a company or a brand name? If so, that domain is more valuable to people in that specific industry or targeting the same audience. For example – buyingatesla.com may be more valuable than buyinganelectriccar.com
My colleague and SEO expert, Hema Day, will share the latest trends in domain names –
All you Hema…
The valuation of a domain name can be very complex. I would urge you to follow these tips:
Definitely do a search for something like GoDaddy if it’s a domain name that you want. It should not really cost you more than eleven dollars or less or a little bit more a year to host a domain name. Now, this week, a client came to me. He is an attorney, and he wanted to buy an additional domain that he felt could benefit his business, and this domain name was valued at $17,000, which is a lot of money for a domain name. How do you decide whether this is worth investing in? Now, firstly, look at it in terms of whether it’s going to yield you any traffic. Traffic from the standpoint of keyword analysis on Google is super important. If it’s not going to give you any traffic, then they don’t get it. The second thing is it associated with a pre-existing website. If so, then take a look at what that website is doing, what kind of traffic it is draining, what kind of leads it’s actually getting, and, last of all, take a look at whether it’s actually going to add value to your bottom line and, by that, I mean lead generation. Quite often, the domain name is associated with a branding strategy and if that does not work, then don’t buy the domain name, and with that I back to you Bharat.
Thanks, Hema. It is great to have you…
There are TWO ways you can value domain names –
- Look up what other similar domain names are selling for. Visit namebio.com, namejet.com, buydomains.com, to see what other similar domains are selling for. For example – if your domain is homeappraisal.net, what are other sites with the word ‘appraisal’, and extension .net selling for. When I looked up homeappraisal.net on namebio.com two transactions showed up appraisalpro.net sold for $800 in 2011 and accurateappraisals.net sold for $488 in 2006.
- Use domain name brokers or value estimators including options from GoDaddy or Estibot. All such websites are using a similar algorithm to estimate domain names.
These two methods will give you a general idea of what your domain name may be worth.
In the last 25 years, domain names have matured as an asset class. This makes me wonder which assets are budding or peaking as we speak. Of course, crypto-assets come to mind.
Domain names today are like the commercial real estate of the internet. While other emerging virtual assets are parallel to subdivisions under development – they will be worth a lot more in 20-30 years.
The most valuable virtual asset today is the real estate pre-loaded apps occupy on a new iPhone or Android or PC or tablets. I wonder what that real estate is worth…