General Domain Information

Some Sunday Afternoon Thoughts

I am upset to see Pete Lamson leave NameMedia. I’ve done a considerable amount of business with the company over the last few years, and whenever I had a question or issue, Pete was always there to help out or point me in the right direction. I wish Pete all the best.

Back when I was doing more hand registrations, my friend Gregg) and I would email each other back and forth with some of the names we picked up. It was always fun to share what I had purchased and to see what he bought. We’ve also done some business in the past, although I wish I was able to get him to sell Puggles.com to me! Anyway, Gregg is selling close to 16,000 domain names, and he will give one free domain name to the first 5 of my blog readers who respond with “free” in the comment section (sometimes I have to manually approve comments, so it will be in order of posting, not necessarily the first 5 to show up). If you’re interested in getting his list (or interested in a free domain name), post a comment asking for it, and I will forward your email address to him.

I’m still working on the development of my first automated sign-up directory. I didn’t use eDirectory for this, and I will ask my developer/designer to write up a post once it launches. It’s very cool seeing requests I make for customizations getting completed. Depending on the success of this site, I may make some changes to other websites I own and alter my acquisition and sales strategy a bit.

With a month and a half remaining in the year, now’s a pretty good time to see if you can do anything that will make an impact on your 2009 taxes. Perhaps it’s a good idea to book flights for 2010 or pay for tickets to conferences and tradeshows in the coming year. Based on my schedule for next year, I am fairly certain I will be attending Targeted Traffic in Vancouver in June, and I hope to book the flight before year end.

How Do You Value a Domain Name?

This morning, I wrote a post about the launch of Valuate.com, an automated domain valuation website. Over the years, people have discussed the process of placing a value on domain names, and I tend to say (as well as others), “a domain name is worth what someone will pay for it.”

Perhaps this isn’t entirely accurate, because it’s impossible to gauge what anyone would or could pay for a particular domain name. There are many things to consider, and perhaps my statement is too much of a generalization?

It’s known that I don’t trust or generally believe professional appraisals, as they are almost always biased. When someone tells me they have a professional appraisal for a domain name that I am trying to buy, I generally reply by saying something like this:

“I don’t believe that appraisals can be accurate for a number of reasons. It’s in the appraisal company’s best interest to make the appraisal very high, as they hope to have repeat business.   If they gave you an appraisal of $200 and you had 50 other names that needed appraisals, would you return to that company? It’s much more likely that you would return if they told you that your name was worth $15,000.

I think it’s impossible to say what a name is worth officially, because you might be able to get much more than I am offering for the domain name eventually, but that isn’t a given and that day could also never come.”

The point I try to make by stating this is that the value of the domain name should be what I am willing to pay for it, and if they are still talking to me, they obviously have never had a higher offer. They can either take the opinion of a company that is making 100% margin on a domain appraisal and wants more business, or accept the cash offer I made.

In any case, the real question here is how do you place a value on a domain name?

Taking Valuate.com for a Test Drive

When I visited Domaining.com yesterday, I saw the headline announcing the launch of Valuate.com, a sister website of Domaining.com and a domain valuation tool that is run using Estibot 2.0. Users are allowed to look up 50 domain names if they aren’t registered users of Domaining.com and 200 if they are logged in to their Domaining.com account. This is the Beta version of the site, with the full launch expected to come in December.

One of the easiest ways to do a comparison of domain values is to compare recent domain sales from DN Journal with the results from Valuate.com. Since a domain name’s actual value is derived from what someone would pay for a domain name, one can infer that the recent sales price is close to its valuation. I wanted to take the new site for a test drive to see the results, and I figured using recent sales would be the most fair way to compare.

Below are some recent sales along with their prices and the Valuate.com valuation. I also added a few of my domain names to see how they are valued.

Domain Name | Sales Price | Valuate.com Valuation
Resumes.com | $400,000 | $910,000
Candy.com | $3,000,000 | $3,080,000
Bubbler.com | $10,000 | $10,000
Exterminator.com | $600,000 | $620,000
Ticket.com | $1,535,000 | $2,600,000
Luck.com | $675,000 | $690,000
Voodoo.com | $300,000 | $320,000
Jets.com | $375,000 | $620,000
Christian.com | $600,000 | $1,300,000
ChinaTours.com | $200,000 | $210,000
800.com | $250,000 | $260,000
Physicians.com | $250,000 | $700,000
DiamondRings.com | $228,420 | $1,970,000
Brazil.com | $500,000 | $630,000
FreeQuotes.com | $210,000 | $220,000
Snowboards.net | $30,000 | $31,000
Science.org | $20,000 | $29,000
LMK.com | $58,500 | $60,000

Some of my companies’ investments:
Torah.com | N/A | $110,000
Burbank.com | N/A | $160,000
Dreidel.com | N/A | $25,000
AthensVacations.com | N/A | $15,000
DubrovnikVacations.com | N/A | $1,000
CabCompanies.com | N/A | $2,200
CatOwner.com | N/A | $1,200
Oenophiles.com | N/A | $4,100
TropicalBirds.com | N/A | $2,800

Overall, some of the values seem to be fairly on point, although I wouldn’t sell a few of them at close to the valuation (TropicalBirds.com for example).   My domain names were private acquisitions (except for Lowell.com), so there probably isn’t an element of human intervention with these values.

One thing I disagree with is the disclaimer, “We DON’T valuate businesses, we DON’T valuate sites.” Although it may not provide valuation on websites, the value takes traffic and incoming links into consideration. By default, developed sites have more of these valuable attributes, which could cause the value to increase. One could argue that the domain name ElliotsBlog.com is worth a few hundred dollars to someone else named Elliot who wants a blog. However, Valuate.com gives ElliotsBlog.com a valuation of $9,200, presumably because of the traffic and site ranking.

One way to really test its accuracy will be to rate the values of pending domain auction names before and after. This will let you see how accurate the system is – and it will also tell you if there are human filters correcting errors.

Here are some Valuate.com valuations of domain names that are up for auction this week during the Traffic show:

40.com – $62,000
900.com – $12,000
Arbitration.com – $250,000
Bands.com – $520,000
Boy.com – $620,000
CigarBars.com – $6,200
DataCenters.com – $27,000
EuropeanVacation.com – $35,000
GolfClubs.com – $410,000
Hookahs.com – $15,000
Marketers.com – $2,000
OfficeSupply.com – $110,000
Penpals.com – $22,000
QB.com – $15,000
ScubaDiver.com – $9,700
SecondMortgage.com – $140,000
SkyDiver.com – $4,100
TreasuryBonds.com – $40,000
WineCellar.com – $56,000
Zimbabwe.com – $410,000

Clearly, some of these valuations are way off. I’m no baller, but I would buy Hookahs.com, Marketers.com, QB.com, 900.com, ScubaDiver.com, SkyDiver.com, and WineCellar.com at those prices right now without even thinking about it twice.

A while back, I discussed Estibot and how I don’t think you can ever rely on the results of an automated website to get accurate domain valuations. I still agree with this, but I think Valuate.com can provide an additional sanity check when buying a domain name.

Francois recently put Domaining.com up for sale with an asking price of $3,000,000. Valuate.com only pegs the value at $110,000. As we all know, the only real way to value a domain name is by offering it for sale and seeing what someone will pay for it!

ItWasTheBestNightEver.com – How I Met Your Mother

The writers for CBS’ How I Met Your Mother did it again. On tonight’s episode, one of the characters mentioned a website that was created by another character about a fun night they had, which they dubbed “It was the best night ever.” The domain name they used was ItWasTheBestNightEver.com, and as they did before, they set up a mini-site with a funny viral video (embedded below) about the “best night ever” 🙂

Last season, CanadianSexActs.org was one of the funny urls a character mentioned, and according to a couple of analytics companies, the website received a considerable amount of traffic, and it still receives residual traffic. They’ve also done this several times in the past. Unlike television shows that have phone numbers mentioned that have to use 555-1234 or something similar, the show is using story lines from the show and expounding on them online.

IMO, these are great viral sites and help promote this award winning comedy show.

Some Thoughts on the Weekend

My wife and I went on a quick vacation for the weekend for a wedding, and as always, it’s great to get away for a few days. I wanted to share some thoughts that I had while away.

I know a lot of professional domain investors don’t particularly like using Estibot for appraisals, and they are amused when a seller lists the Estibot value in a domain sales thread. However, one way to use Estibot’s very favorable values is when someone inquires to buy a domain name from you. Since the values seem more “end user-ish,” why not cite that valuation in your reply as a starting point for negotiations? Of course, you need to make sure the value is in line with your asking price.

I still don’t understand why a company like Ebay or Microsoft would want to buy a gTLD for its brand. It would seem that the   application fee as well as ongoing management costs (either internal or outsourced) wouldn’t justify the price when the .com domain name can seemingly do the same thing. Really, what’s the difference beetween something like cars.ebay versus cars.ebay.com when there are so many more costs associated with gTLDs?

I do happen to think gTLD domain names will be a game changer for our industry. I don’t really know many domain investors that are “fighting” gTLDs per se (although there are plenty that don’t really want them), but it will be important for all of us to embrace them upon introduction to hedge our .com bets, in the event that consumers quickly adopt them in market. Whatever happens, it’s going to be fun watching and participating when they are introduced and publicly available.

It’s fun to know so many city .com domain name owners when we go away and meet people that live all over the country. I met/saw people from Portland, Denver, San Francisco, Los Angeles, Nashville, Philadelphia, and a few other cities, and I always have the urge to say, “my buddy owns that city .com” but my wife doesn’t exactly like it when I do that 🙂

When I have the chance to do new things and try new activities, it helps stimulate ideas for domain names (new registrations and aftermarket acquisitions). I spent yesterday morning on a boat and was able to do some wakeboarding, so I now have some new ideas for domain inquiries.

Political Side of ccTLD Domain Investing

AE DomainsThis isn’t a political blog, and I hate politics anyway, so I don’t have any additional commentary to provide on this topic, but I thought this notice was interesting:

“Due to the governing law of the UAE: Israeli entities and individuals are not eligible for .ae domain names.”

Aside from countries that require the registrant to live in the particular country of the ccTLD, are there any other domain registration restrictions like the one above?

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