Evaluating a Domain Name

Elliot Silver
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27

I am in the process of evaluating a domain name I am thinking about buying, and I thought I would share some of the considerations I make as I go through the process to determine how much I am willing to pay to buy the domain name. I am sure I’ve shared a number of these points in the past, but I thought it would be good to write down the things I am considering as I go through this evaluation process.

If there are other things that you consider that I didn’t share below, I invite you to share them in the comment section. Your thoughts can help make this more robust and helpful to others. If I can think of anything else after publishing the article, I will add it because I am sure there are some things I look at when determining how much to pay for a domain name.

Evaluating a domain name to buy:

  • Search volume – I use the Google Keyword Tool as well as a general search of Google to make sure people actually search for this keyword vs. other keywords.
  • Advertisers on Google – When I search Google, I am also interested in seeing how many advertisers there are for the keyword. The more advertisers there are, the more prospective buyers there probably are. This does not include dictionary words or common phrases that could be used as brands.
  • Number of companies that do this or offer this – I want to make sure there are enough companies offering the product or service that might want to buy the domain name. Fewer companies that offer the keyword product or service, the more challenging to sell. This does not include dictionary words or common phrases that could be used as brands.
  • Past sales – I like to search NameBio and other resources (including Google) to see if this name sold previously and for how much. If I buy a name for resale, I don’t want a prospect to quote a substantially lower previous sale because that might make it difficult to sell for much more.
  • Comparable sales and listings – I look up what other, similar names sold for, and I also look at marketplaces like Sedo and Afternic to see what similar names are listed at to see if the name I want to buy is a good deal.
  • Sale listings or auction listings – I also use Google to search for the exact domain name to see if it was previously listed for sale or at auction and didn’t sell. Information like this may also be good for negotiating with the owner (ie “it didn’t meet a $10,000 reserve price at auction, so I am not going to pay $15,000 for it today.)
  • Other extensions registered and by who– If other extensions are registered, it shows interest in the keyword or phrase, which might indicate added value. This also may indicate who would be interested in the domain name, especially if other TLDs are developed by companies in that business. This could also be a good indicator of potential TM issues.
  • USPTO TESS – If I am not certain a term / phrase is completely descriptive, I will generally search TESS to see if there are US trademarks that could impact my ownership of the domain name. If I still have concerns but wish to buy the domain name, I will ask my general counsel and/or an IP attorney for an opinion.
  • Evaluating the landing page – If there’s a for sale link or graphic, I need to figure out why others didn’t buy the name before. Development or partial development may have been a deterrent to inquiries, and that is a good thing if the domain name is ultimately being re-sold.
  • Valuate / Estibot / Colleague valuation – I sometimes like to get a third party valuation to get an outside opinion on value.
  • Gut Feel – This is probably the most difficult thing to express, but I come up with a value in my head and use that to evaluate whether a domain name is a good deal or not.

Your Inquiry May Lead to a Sale Listing

Elliot Silver
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2

One of the most exciting aspects of investing in domain names is when you’re able to get a reply to an email or a phone call from a domain owner that was difficult to reach. Sometimes you need to do more research to contact certain domain name owners, and getting a reply to an offer or inquiry opens the door for a potential acquisition. I think many of the most successful domain investors are good investigators and have a knack for finding and communicating with even the most “hidden” domain name owners.

If you found it difficult to get in touch with the owner of a domain name, chances are good that others did as well. If that’s the case, it is very possible that the domain owner has not fielded many (or any) inquiries or offers in a long time. Your offer or inquiry may make the domain owner aware that his or her asset has value, and if that is the case, the owner may seek a public sale to get the most money for the domain name.

On occasion,

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Find a Founders Program

Elliot Silver
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14

If you are bullish on the new gTLD domain names but don’t want to spend a lot of money on a targeted keyword domain name, you might want to check out the various founders programs to see if you qualify. I believe that many new gTLD registries offer a special program to give domain names for free (or cheap) to people who qualify with a good development and marketing plan.

Domain registries like .CO and .ME offered up some of their “premium” domain names to companies that wanted to develop a business or website using one of their domain names. In some cases, domain names were given away for free if specific requirements and hurdles were met, and in other cases, reserved domain names were sold (one of my companies participated in the .CO Founder’s Program a few years ago). My guess is that it depends on the business idea, amount of funding and resources that will back the website, and perhaps other requirements to strike a deal.

I did some research, and listed below are a few examples of gTLD registry operators who have a founders program or something similar that will put “premium” domain names into the hands of people and businesses that will build on them:

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Danger of Trying to Replicate

Elliot Silver
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6

Several years ago, a friend of mine shared a website that he built based on a particular type of geographic + keyword domain name. I thought it looked like it would be a money maker because of the slick design and what I saw of the monetization, and I went out and inquired about a few domain names that I thought I could use in order to replicate what he was doing in a different market.

To make a short story short, I never got around to figuring out how his website works, and I never made any money with the 2 domain names I bought. They weren’t large investments, but they weren’t really valuable undeveloped.

Sometimes a project looks easy to replicate, but in reality, there were countless hours spent developing the engine that operates the website. Additionally, there are deals that need to be cut with advertisers and affiliate companies, and that doesn’t even include the time it takes to find those potential partners in the first place. Just because

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Expedite a Domain Name Transfer

Elliot Silver
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14

I don’t know about you, but I find it particularly annoying when a registrar domain transfer takes far longer than it should. In my opinion, if a domain name is transferred to another domain registrar, it should take no longer than a day to complete as long as all approvals are made by the transferring parties. Unfortunately, it can take up to 5 days for a transfer to be finalized.

Some domain registrars make it very easy to transfer domain names. I’ve transferred names from Enom to GoDaddy in just a few minutes. Unfortunately, I’ve found that some domain registrars seem to make it difficult, and it takes the full 5 days to go through. Perhaps they think that a customer will change his or her mind during that time period or maybe there are other reasons, but it’s frustrating to wait when I know it can be done more quickly.

If you sell a domain name and are awaiting the successful transfer to get paid or if you are consolidating your domain portfolio at one registrar and want it done more quickly, here’s a tip to speed up the domain transfer process.

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Memorial Day Weekend Updates

Elliot Silver
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13

One of the nicer things about this business is that I can take a day off whenever I feel like it. Yesterday, I decided I would do some of the easier landscaping stuff around the house (mulching). I bought 5 cubic yards of mulch, a wheelbarrow, and a pitch fork. I am totally regretting it today. My back is sore, my arms are sore, and I didn’t even finish the job. There is a first and last time for everything.

If you’re in the US, I hope you enjoy your Memorial Day weekend and don’t forget the meaning behind the holiday. Here are some updates, thoughts, and a bit of advice for good measure.

  • Michael Castello published an article on DomainInvesting.com that I think is worth a read. I appreciate that Michael shared
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