GoDaddy Auctions is set to reintroduce an updated valuation appraisal tool for its expiring domain name inventory. If you visit GoDaddy Auctions later on this evening, you will be able to see the “Valuation” column will be populated with a valuation range. Previously, the Valuation column was essentially useless because it was based on a parked earnings algorithm that didn’t take the intrinsic value of the domain name into account. In fact, I described GoDaddy valuations as “laughable” in an article I wrote last year.
According to GoDaddy Vice President Paul Nicks, the new and updated valuation tool’s algorithm uses the (presumably) massive database of Afternic sales to determine the retail price range of the domain names for sale in GoDaddy’s expiring domain name auctions. Essentially, the valuation tool is predicting what the domain names would sell for at retail prices if they were listed for sale on Afternic.
The Valuation column will offer a valuation price range rather than a single number. Domain names that the tool appraises at less than $1,000 will be listed as under $1,000 rather than a more specific range. Additionally, domain names the tool appraises at $25,000 or more are in the $25,000+ category rather than having a more specific price range.
One added benefit of the tool for domain investors is that it will allow people to search for expiring domain names by their valuation, according to GoDaddy. This should be good for investors looking for good names by potential sale price. I would also imagine this will be good for GoDaddy as well since it should help generate additional sales.
For the time being, GoDaddy is not offering its valuation tool for privately owned domain names on GoDaddy Auctions, nor is the company allowing people to input their own domain names to see how GoDaddy values them. I would not be surprised to see the tool rolled out in the future to help people price their domain names on Afternic. People who use the tool should always keep in mind that domain names may appraise at a certain level but may never sell for that amount (or even close to that amount if at all).
The tool may be helpful to people looking at auctions, but it’s primary purpose is to sell more domain names. My guess is it will do both.