Are Domains Really Worth $1,000+ Nowadays?

July 5, 2004 8:03 AM

How do you value a domain name? More specifically I am a member of a webmaster newsboard that has domain names for sale. When I inquired about a certain domain I was told the owner was looking in the $X,XXX range for it. Yet I don't see how a domain could be valued at that price range when I see sites with full content selling for less than that. Is a domain really that valuable anymore? I don't think it is. Yes a .com is better than a .net or .org or whatever, but to ask for $1,000+ for a domain is just kinda pricey I think when the domain hasn't been doing anything other than pointing to another url.
posted by thebwit to computers & internet (5 comments total)

Often squatters will actively log the number of hits on a domain (and/or purchase queries), and increase the price accordingly. The price doesn't have anything to do with what the domain's being used for; it has everything to do with how popular it is and thus how much somebody will be willing to pay for it.
posted by DrJohnEvans at 8:14 AM on July 5, 2004

It's like determining the value of a brand name. It's worth whatever someone is willing to pay for it.

The (lack of) content doesn't enter into it, really; selling a domain name is like selling a street address. Doesn't matter what's there currently, since the expectation is that you're going to tear it down and put your own business in there. If someone's actually selling the content, they're more likely to advertise it as a business for sale, rather than a domain name for sale (and in that case the pricing is probably going to have much more to do with current usership, profitability, etc than with the domain name itself.)
posted by ook at 8:26 AM on July 5, 2004

Here is a professional questionable attempt
posted by tcp at 8:45 AM on July 5, 2004

Unlike stocks, there's no established, structured market for domain names. In that vacuum, a fair price, to you, basically comes down to the underlying business value _you_ would find in it.

In some cases, DrJohn is absolutely right--they're actually using a measurable gauge, and reckoning a price from that. In most cases, though, the seller's basically taking a stab at what they think they might get for it, by creating a profile of the type of buyer they think they might attract, and guessing how much that hypothetical buyer would be willing to pay.

It really comes down to two very basic business questions:
1) What business value do you think you could get from the domain?
2) How exclusive is your ability to capitalize on that opportunity? (Could other people get that value just as easily as you could, or are you in a unique position to take advantage of that value?)

A domain is definitely $1,000 to you if you're confident you've got a solid, and exclusive, way of making a $10,000 profit from it. If anyone who bought it could make $10K from it, and they know it's available, then there's actually a small market for it, and likely price is going to be much closer to $10K. That's more the model that DrJohn is referring to, where there's enough intrinsic traffic through the site that anyone could capitalize on it, but that's not necessarily true for the majority of domain names on the market.
posted by LairBob at 11:55 AM on July 5, 2004

Back when I was considering selling manual.com (in 2000), some of the domain marketplace Web sites offered "independent appraisals" for it, by supposed "experts" in the field. I was getting all excited because they appraised it at hundreds of thousands of dollars. One appraiser said a million. Woohoo! I'm rich, I'm rich, I'm faaaaaabulously wealthy!

Ended up selling it for $10K. It's worth, as ook said, what someone will pay for it.
posted by kindall at 12:28 PM on July 5, 2004