neddy
Top Contributor
This is an article about cyber property - domain names and websites.
But more particularly, how do we as domainers, domain owners or domain developers, assess the value of cyber property? And I'm talking when we both BUY and SELL it.
Are we short changing ourselves in both regards sometimes?
This article obviously reflects my opinion - and as always, I welcome both supportive and opposite views.
Cheers, Ned
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I was having a chat with Ed Keay-Smith from OzDomainer a couple of days ago, and we got talking about how best to describe cyber property (domains and websites) –
and consequently how to value them - and get the best value out of them.
We’ve all heard many people discuss “cyber property” - and use various analogies to compare it to bricks and mortar real estate – or land.
Ed told me that one of the best explanations and analogies he ever heard was from Andrew Miller of InternetRealEstate.com (he interviewed him a couple of years back).
Andrew and his partner Mike (Zappy) Zapolin own (and have owned) some of the best generic domains there are to own. Names like Beer.com; CreditCards.com; Music.com;
Chocolate.com and Phone.com – and many others. Have a look here: http://internetrealestate.com/overview/
So if anyone knows how to value cyber property, it is these guys.
I had a listen to the interview, and I recommend others do to. I love listening to successful people sharing ideas and visions. The whole interview is here, but I am going to
highlight two particular sections below.
Firstly, he made a statement I totally agree with.
A lot of “Domainers” (not all) value domains they make offers on based on traffic and CPC. He totally disagrees with this approach. He and Zappy have never ever sold a
domain based on traffic and PPC. They even refuse to quote any stats.
Their buyer is a domain developer or enduser who understands that the value to them is not some parked page that a domainer has done nothing with – but rather what they can do with it.
It also frustrates the buggery out of me sometimes when I'm trying to sell a domain, and the potential buyer says something like: "But it has only got 300 exact searches on GAKT.
Therefore it can't be worth what you're asking".
I just think you have to look beyond the "vacant land" approach - and think of the potential. Is it inherently a good sounding name? Is it a good keyword (even though it may not have
the search now)? What could I build on this that would make people want to visit? Is there an ultimate enduser out there that would love a finished product rather than a "parking lot"?
If you go to the interview, fast forward to about 8 minutes 45 seconds. Andrew just describes it so well imho.
Then there is the analogy he used.
I’m paraphrasing, but basically he said “imagine if you had the opportunity to own a big chunk of prime vacant commercial land in Madison Avenue, New York. If a hot dog seller
wanted to set up his stand on that land, it would only be worth so much to him. But if someone like Barneys (famous department store) came along and saw the same land, and
worked out that they could cover the whole site with a 4 storey department store, that piece of land would be worth a whole lot more to them”.
He describes it better than I can, and you can listen to it here (if you don’t want to listen to the whole interview, you can fast forward to 12 minutes 15 seconds):
Most of us don't have fantastic names like the above, but even if we have half-decent names -and build them out and get traffic and revenue coming to them, they are going to be
worth a truckload more than a “parked” page.
Let me finish off by giving one prime example of what I have been talking about here.
I sold a domain with a dormant website late last year. That domain was moneybuddy.com.au. The sale was covered here.
At first glance, this didn't appear to be worth anything. In fact, if you GAKT the term today (both one word and two words), it has under 75 exact searches a month.
But the buyer / domain developer saw the potential in this faded star, and so they set about refurbishing it to its former glory - and beyond. Their investment is paying off big time now -
and the property is worth so much more now.
Conclusion:
But more particularly, how do we as domainers, domain owners or domain developers, assess the value of cyber property? And I'm talking when we both BUY and SELL it.
Are we short changing ourselves in both regards sometimes?
This article obviously reflects my opinion - and as always, I welcome both supportive and opposite views.
Cheers, Ned
-----------------------------------------------------------
I was having a chat with Ed Keay-Smith from OzDomainer a couple of days ago, and we got talking about how best to describe cyber property (domains and websites) –
and consequently how to value them - and get the best value out of them.
We’ve all heard many people discuss “cyber property” - and use various analogies to compare it to bricks and mortar real estate – or land.
Ed told me that one of the best explanations and analogies he ever heard was from Andrew Miller of InternetRealEstate.com (he interviewed him a couple of years back).
Andrew and his partner Mike (Zappy) Zapolin own (and have owned) some of the best generic domains there are to own. Names like Beer.com; CreditCards.com; Music.com;
Chocolate.com and Phone.com – and many others. Have a look here: http://internetrealestate.com/overview/
So if anyone knows how to value cyber property, it is these guys.
I had a listen to the interview, and I recommend others do to. I love listening to successful people sharing ideas and visions. The whole interview is here, but I am going to
highlight two particular sections below.
Firstly, he made a statement I totally agree with.
A lot of “Domainers” (not all) value domains they make offers on based on traffic and CPC. He totally disagrees with this approach. He and Zappy have never ever sold a
domain based on traffic and PPC. They even refuse to quote any stats.
Their buyer is a domain developer or enduser who understands that the value to them is not some parked page that a domainer has done nothing with – but rather what they can do with it.
It also frustrates the buggery out of me sometimes when I'm trying to sell a domain, and the potential buyer says something like: "But it has only got 300 exact searches on GAKT.
Therefore it can't be worth what you're asking".
I just think you have to look beyond the "vacant land" approach - and think of the potential. Is it inherently a good sounding name? Is it a good keyword (even though it may not have
the search now)? What could I build on this that would make people want to visit? Is there an ultimate enduser out there that would love a finished product rather than a "parking lot"?
If you go to the interview, fast forward to about 8 minutes 45 seconds. Andrew just describes it so well imho.
Then there is the analogy he used.
I’m paraphrasing, but basically he said “imagine if you had the opportunity to own a big chunk of prime vacant commercial land in Madison Avenue, New York. If a hot dog seller
wanted to set up his stand on that land, it would only be worth so much to him. But if someone like Barneys (famous department store) came along and saw the same land, and
worked out that they could cover the whole site with a 4 storey department store, that piece of land would be worth a whole lot more to them”.
He describes it better than I can, and you can listen to it here (if you don’t want to listen to the whole interview, you can fast forward to 12 minutes 15 seconds):
Most of us don't have fantastic names like the above, but even if we have half-decent names -and build them out and get traffic and revenue coming to them, they are going to be
worth a truckload more than a “parked” page.
Let me finish off by giving one prime example of what I have been talking about here.
I sold a domain with a dormant website late last year. That domain was moneybuddy.com.au. The sale was covered here.
At first glance, this didn't appear to be worth anything. In fact, if you GAKT the term today (both one word and two words), it has under 75 exact searches a month.
But the buyer / domain developer saw the potential in this faded star, and so they set about refurbishing it to its former glory - and beyond. Their investment is paying off big time now -
and the property is worth so much more now.
Conclusion:
- While "search traffic" may be gratifying, look beyond this if you can. Have a vision. Both as a buyer and a seller.
- Increase the value of your assets - don't just have a parking lot - build something!
