I was chatting with a prospective buyer about domain names and domain name valuations. This topic is a bit murky, especially when my rationale for pricing is based on select comps, my knowledge of domain names, and “my gut feel.” Although I am not willing to move on my valuation, I can commiserate with the prospect a bit because of the lack of clarity involving domain name valuations.
On a phone call yesterday, he asked me, “what do you think about GoDaddy’s appraisals?” I immediately knew why he was asking – my domain name is priced substantially higher than the GoDaddy automated appraisal. In fact, someone else had submitted an offer to me within the last year and the message field simply had a link to GoDaddy’s appraisal for the name (sidenote: don’t do that). I briefly explained the automated nature of their appraisals, but I thought it would be more effective to illustrate the discrepancy of valuation vs. pricing by GoDaddy itself.
I explained how GoDaddy has acquired some domain portfolios over the past few years, and the company operates a portfolio company called NameFind. I then shared a domain name owned by GoDaddy / NameFind. For the sake of keeping the name I shared private for a couple of reasons, I will use a different but similar example. Cliche.com, for example, is priced at $49,999, but GoDaddy’s automated appraisal says the domain name is worth $15,813.
This didn’t perfectly align with my domain name’s valuation or my six figure asking price, but I used it to illustrate the fact that even though GoDaddy has its own appraisal platform, the company’s asking price doesn’t closely align with their appraisal.
On lower value domain names, the GoDaddy Appraisal tool may be helpful to domain sellers. For instance, GoDaddy lists the appraisal in the registration search channel for domain names listed via Afternic where the asking price is below the appraised value. On the higher valued names, it can be harmful to a negotiation. In my situation, it felt like the prospective buyer used the GoDaddy appraisal to almost reinforce his opinion about the value and refute my valuation.
I would love to know how GoDaddy’s brokers reply to a prospective buyer of a NameFind name who mentions the company’s own appraisal tool when the asking price is much higher.