Domaining.org.uk

This is the second part of a two part article that looks at a variety of techniques that should be used when estimating the value of a domain name.

Part one of this two part article was a basic introduction to the need for effective domain name valuation. Part two below, discusses concepts, tools and resources available to assist in domain name valuation.

In the first part of this article the practical reasons for valuing a domain were explored. Now we come to the heart of the matter - domain valuation tools and techniques.

I have covered the factors that should be considered when valuing a domain name - else where on this blog. These factors include the length of the domain name, the domain name extension (e.g. net, org etc) and the amount of traffic it receives.

Appraisals

Appraisals are frequently criticised within the domaining industry and while appraisals from legitimate companies such as Sedo.co.uk might be worthwhile a great many domainers never need to use them.

There are two types of appraisals………

Paid appraisals, such as from Sedo.co.uk. You can find out what a Sedo appraisal looks like in this post from the highly recommended Self Made Minds blog.

Free appraisals from discussion forums and from appraisal sites. You can find domain name appraisal sections on most domaining forums. For example, there is an appraisal sections here at DomainState and here at the UK domain name discussion forum AcornDomains.

Estibot.com provides free instant appraisals. When I tried it tonight Estibot appraised the domain name of this site - domaining.org.uk - at $180 and valued the site taking traffic into account at $640. 

Valiations based on sales of similar domains

One way of attempting to estimate the value of a domain is to consider sales of similar domains. There are many sites containing sales data. Website DNJournal lists weekly reported domain name sales and ‘year to date’ sales data. Afternic.com lists salse made through their site  and reported UK domain name sales can be found at DomainPrices.co.uk. Namebio.com is another excellent resource.

Discussions on domain name valuationThere are many discussions in forums and blogs on domain name valuation techniques. Here is an interesting thread from NamePros.com discussion forum, from 2005 which covers the topic well, and here is a quite old (2002) but still interesting discussion on domain name valuation, from Webmanster World forum. [The prices quoted are particularly out of date but the general concept is worth looking at.] In this discussion thread from the AcornDomains.co.uk domain name discussion forum a representative from domain name sales website Sedo.com provides a particularly valuable insight into how they go about valuing domains.

Other good stuff

You can check a websites backlinks with a number of sites, including www.backlinkwatch.com, www.backlinkfinder.com and perhaps the best known, www.MarketLeap.com. You can also see a history of all the websites ever built on any domain by entering the domain name into the search box at Internet Archives Wayback Machine. Finally, I’ll conclude with this article from internet entrepreneur Tyler Cruz on the Top 10 Reasons People Overprice Domains.

This is Part 2 of a series on valuing domain names. Part one can be found here. 

Do you have thoughts about valuing domains?  How would you work out how much a domain is worth? What do you think of domain name appraisal services - cool or rip off? Share your thoughts below…………………

So folks, it looks like the next stage of the internet domain names gold rush will be the registration of currently unregistered four letter .net domain names.

It appears that around 50% have been registered so far and I must admit I am tempted to add to my modest holding. I have to say that even though four letter .nets are a longer term hold I am actively looking for any decent unregistered domains.

The hottest topics on the domain name discussions forums concern 3 and four letter domain names and the hype surrounding 4 letter .nets gets ever more frenetic.

The forum Namepros.com now has a short domain name section covering domains shorter than 5 characters such as “LLL, LLLL, L-L-L, 2c, 3c, acronyms, etc”. The LLLL.net countdown thread can be found here  and a more sober appraisal of the market for LLLL.nets is being discussed on DomainState.com, here.

There are also a number of bloggers reporting on the LLLL market, such as GFNB.net, the LLLL.net countdown website and QuadLetterDomains.com . Also worth having a look at 4letternoob’s blog.

If you want to find out more about LLLL.nets you may find this article from DailyDomainer.com is worth reading .

People who missed the LLL.com, L-L-L.com and LLLL.com gold-rushes want to get on the bandwagon. So do those who did well out of previous goldrushes and who want to repeat the experience with LLLL.nets.

However, not all domainers feel that way and a fairly large note of caution is required here. The demand for LLLL.net domains is different to that for LLLL.coms. If someone is looking for a four letter .com domain for their business, an alternative for that person may not be the same domain in a .net. What I mean is that a business called UKGB, which wants to buy UKGB.com but cannot because it is too expensive or in use already, may not see UKGB.net as a preferred alternative. For example, they may feel that a dot com is more memorable for their target market and if they use UKGB.net they are sending traffic to the dot com version. For them the preferred alternative may be ‘UKGBClothes.com’ or ‘UKGBProperty.com’ or whatever, depending on their business.

As I have said before I think LLLL.nets do have a market and news of some profitable sales to end users have been encouraging. The lure of a short memorable 4 letter domain in any extension will be too strong for some end users and so LLLL.nets will sell. However, in my opinion, in general, they need to be considered as longer term holds rather than a way to make quick money.

I think we should expect to see a modest increase in values as soon as the last LLLL.nets are gone. But when might we expect decent returns? Might we be looking at 6 – 12 months before the last ones are gone? After that there could be years of only modest price appreciation. Also, bear in mind that .nets have sold for 20% - 40% of the equivalent .com.

So this is a long term investment and in my opinion only jump aboard if you are prepared to invest five or more registration fees for each name held, over the next five years before having even a chance of satisfactory returns.

So what do you think? When will the last .nets available to register run out? Are they going to appreciate rapidly, modestly or not at all? Are you jumping aboard or not? Tell us why.