'There is Only Value if They Are Used' | DomainInvesting.com
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‘There is Only Value if They Are Used’

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While looking through my Twitter feed this morning, I saw that  Alan Dunn posted a link to an article that I bookmarked and will share with people who inquire about my “unused” domain names:

For those with limited time, the article is about singer Julio Iglesias listing 4 connected waterfront lots on the Miami Beach island of Indian Creek Village for sale for $150 million. There are no houses or buildings on these undeveloped lots, but the large property would be a fantastic spot to build a huge home with a couple of smaller villas for family and friends.  I think this is a perfect illustration of the value of a great undeveloped domain name.

In between the time I saw the article and my wife and I got the kids ready for the day, I received a serendipitous domain name inquiry that illustrates the disconnect for some people. After being offered $35 for SeaLions.com, I replied with my asking price and told the prospect that the domain name is much more valuable than his offer. His response was somewhat typical: “😊 There is only value to the sites it if they are used.” People don’t seem to understand a domain name holds value beyond how it is presently being used, and that way of thinking is a mistake.

I am not really sure what can be done to explain the value proposition to someone who doesn’t understand because many people who inquire about domain names either can’t afford a high value domain name or their budget won’t allow it. I don’t particularly enjoy long email exchanges with unqualified prospects, so I think sending a link to this article about Julio Iglesias will suffice.

I was most likely going to write about Alan Dunn’s tweet even without the inquiry, but the timing was too perfect not to mention it.


About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (12)

    John

    Such an enjoyable illustration, and such a beautiful stretch of land.

    I keep a section on my computer and in my bookmarks about the topic of the value of domain names and this blog post has definitely been filed. I recommend everyone do that in fact because you know it’s almost inevitable you’ll have to deal with this subject again, and again.

    The public definitely needs to be educated.

    As I have posted elsewhere, make no mistake: despite all the emphasis on “ecommerce” and such, all the great media adventures which have led to the success of some, nonetheless there has been a great “dumbing down” among people about what domain names even are and what can be done with them, at least here in the US. People not only need to be educated, but reeducated.

    I still haven’t looked at the “domain investing” material GoDaddy is publishing now, except for the homepage, but if GoDaddy is now educating the public in a good way as is so very much needed then that is certainly something to appreciate. It may be in their interest to begin with, but certainly everyone’s in the industry, win-win.

    One thing that appears to have escaped people’s notice is something I consider to be a potential “game changer” element, pertaining to domain auctions. It may never materialize or may perhaps be a long way off, but what I am referring to is the move into the online world of what I have always considered to be the biggest name in auctions:

    Sotheby’s

    I was certainly glad when HA finally did this, although to be honest, I have been unhappy with how they have done it. Perhaps I should be embarrassed to admit it, but I had not even heard of them until that, whereas I have known about Sotheby’s and Christies since I was a wee lad. Nonetheless, it was still a good move and the first step among great mainstream auction establishments of the world.

    If Sotheby’s were to take the plunge, however, I feel strongly that could be a game changer. Not the only game changer, but a big game changer. They have already taken the first step even if they are not even thinking about it now or do not even want to do it now or yet.

    What would be sad and “tragic” however, would be if they simply adopted the same kind of misguided and mistaken dogma regarding domain length, and jumped on the bandwagon of “short, short, short,” the way HA has. As in “either/or” instead of “both/and”; zero sum game, selfishness, shortsightedness and greed at everyone’s expense including one’s own, instead of an open-ended pie big enough to acknowledge the value of the best of both worlds, a value in no way diminishing the value of the best short while acknowledging the value of the best long. I could elaborate and have elaborated on that further of course.

    Well that should do it for now since this has gotten a bit long. 🙂

    July 21st, 2017 at 12:29 pm

    steve

    I rented a guest cottage (a la Kato Kaelin) for almost two years on the estate of an Indian Creek property — and the owners were there only 4 months out of the year. I believe Indian Creek property is the most valuable residential real estate in the USA (not including condos in Manhattan) – or maybe it’s Woodside or Los Altos in Silicon Valley.

    That property most likely will be under water (literally) by 2080 — so it’s still got some value for another 50 years 🙂

    July 21st, 2017 at 12:49 pm

    Gene

    “Unused = worthless”…?????

    Sure. Tell that to the owner of ETHEREUM.com

    July 21st, 2017 at 1:42 pm

    Leonard Britt

    There are vacant lots in downtown West Palm Beach.

    A couple years ago construction of a high -speed train connecting downtown West Palm Beach to downtown Fort Laudersale and downtown Miami began. A vacant lot in front of the West Palm Beach station was apparently sold as they are building new condos. A couple blocks away another condo is almost finished. So nearby construction increased the value of those lots which had been vacant.

    July 21st, 2017 at 2:11 pm

    Eric Lyon

    I’m not sure all domains qualify as having value without development/use, however, some of the better ones do, sure. That article works for the better ones but might lose its effectiveness if it starts getting used as a reference for really bad domains a lot.

    July 21st, 2017 at 2:23 pm

      John

      That goes without saying.

      In reply to Eric Lyon | July 21st, 2017 at 6:27 pm

    Michael Anthony Castello

    I am in the middle of negotiating a sale for Johnathan.com with someone that really wants it (his name is Johnathan) and thinks because I’m not using it, I should give it to him for cheap. I would love to post the conversation here because it relates to your article so well. I am taking the time to help this buyer understand what a domain like this is worth. It’s almost comical and I am using the “land/property angle to break through to him. It most likely futile, but I still enjoy trying.

    July 21st, 2017 at 3:27 pm

      Josh Schoen

      Michael, I’d certainly like to see that convo!

      In reply to Michael Anthony Castello | July 21st, 2017 at 4:41 pm

      John

      I keep and use far more than I sell, but pretty much every negotiation resulting in a sale I ever have includes this conversation over and over and over again.

      In reply to Michael Anthony Castello | July 21st, 2017 at 6:34 pm

      Michael Anthony Castello

      I’ll email it to Elliot and he can decide if he wants to post it. It is a little long but a real buyer/seller conversation.

      In reply to Josh Schoen | July 21st, 2017 at 6:55 pm

    steve

    Let’s imagine this scenario:

    from: clueless____@gmail.com
    to: jeff@amazon.com

    Dear Mr. Bezos,

    I understand you own Awake.com, and it’s not really developed. It just directs to your company’s site Amazon.com. I want to launch a coffee and brand it “Awake” as it’s like red bull + coffee on steroids, and it would really increase productivity in the workplace and at colleges. So I’m thinking maybe $500 for the domain, as, you, er, aren’t even using it. And this coffee Awake can be offered on Amazon.com and, like, really increase your revenues. Win, win, huh, Jeff?

    best, Clueless

    2 weeks later

    jeff@amazon.com

    Dear Jeff,

    OK, I’ll increase my offer to $600 and a free case of Awake coffee. But this offer is only good until tomorrow.

    July 21st, 2017 at 4:25 pm

    page howe

    another illustration is the way oil and gas land has been bought and sold for years.

    Land can have

    Developed reserves – oil flowing (like an operating website)

    Undeveloped Reserves – the oil is there, no pump connected- this would be like
    generics with traffic, not being pointed – still immediately valuable

    Potential Reserves – In oil and gas, you have the geology that says theres probably hydrocarbons,just havent proved them with a well

    So this is where most prestige domains are, obvious uses, just hasnt been done yet

    and then in domain name i think we have a variable component that the name could become instantly valuable as times, terms, habits or themes change.

    So you add up these values,and the present value of the income streams. compare it to the $8 a year, and the rest is the amount i would need to surrender this name, AND EVERYTHING IT COULD POTENTIALLY BECOME to a new owner.

    good post elliot

    page howe

    July 22nd, 2017 at 6:49 pm

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