I saw a thread that was rekindled on DomainState that I hadn’t looked at in a number of months. Recent comments seem to indicate that some people believe geodomain values are significantly diminished. For the purposes of this article, I am going to refer strictly to city/state/country/region .com domain names only.
Yes, I believe the value of these domain names (domains only – not websites) are down. As an active buyer and seller, I believe that just about every sector is down right now from last year and the prior year. There are a number of factors that I believe are impacting geodomain name values.
- Most domain investors who are buying and selling regularly are making less expensive and less risky investments, and geodomain names aren’t in that category. No longer can you go out and buy a $50k geodomain name and then flip it for $75k right away.
- Geodomain names need to be developed to make good money. I don’t know many people who make significant PPC revenue with geodomain names. I do know many people who make good money with developed geodomain names. Development takes time and costs a quite a bit.
- Geodomain developers are fortifying and growing their internal businesses right now rather than expanding their reach. Companies are spending more on infrastructure and securing advertising accounts rather than making headway in new markets.
- All companies are doing what they need to do to survive. It wouldn’t be prudent for a company to expand if it would jeopardize its current financial conditions.
One issue I have is that I am struggling to add advertisers in Burbank on Burbank.com, although I do have advertisers and do get a frequent check from WC Travel (hotel affiliate). I turned down an offer of over $100k for Burbank.com and would turn down the same offer again, despite the fact that it would be a profitable sale. However, if I could find a city .com of equivalent value in Massachusetts – or even New Hampshire, I would be more inclined to work something out.
It should be noted that geodomain names are still as difficult to acquire as ever. Good luck trying to buy a developed name at a “good” price from someone that has already developed it. It’s possible, but I don’t think it’s very easy.Values have decreased because of the economy, which may be contributing to lower advertising sales, but in terms of the reasons why geodomain names have value, little has changed in my opinion.
Yes, undeveloped geodomain names can be had for better prices than last year and the year before, however, geodomain names still command high prices. In case you missed it, Rio.com sold for $450,000 last week, and I know the owner is planning on building a site about Rio de Janeiro.
The bottom line is that prices are down, but I am still buying when I find something that would benefit my business (ie Newburyport.com a few months ago). As a domain investor, I am diversifying my investments, but I have not stopped making solid acquisitions and expanding my business.