this is what i was tacitly trying to imply in my first post about this issue. I agree . A very good sale, but i don't think under regular market conditions this name is worth this amount.
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This is one of those very nice sales... I think many people would sell this domain in the range of xx,xxx but Rick has done a good job making CCN pay up $750k haha
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Unfortunately some of you are missing the most important thing about this. Often we as "domainers" go by our own bible of of what this domain or that domain is worth, and we hurt ourselves. I heard someone in another thread say, "Well, Estibot says it's only $750, so he definitely got a great deal.". Really?? To me this proves the irrelevance of Estibot more than anything (even though the creator did the best job you could do through automated methods).
A domain is worth whatever the other party is willing to pay - period! CNN doesn't care what Estibot says. If a name YOU own makes sense to a company that can in-turn build it into a 50 million dollar plus business, that is all that matters. That's why so many of the top people in this industry, including Rick, are against so-called professional appraisals.
Another important thing we could all learn from this is the importance of leverage in negotiating. Rick took his sweet time through the whole negotiation process. He created a vision of what his name was worth to CNN, and through patience made it a reality. Sure, he didn't need the money like you or I might, which helped with the patience part, but he kept the power in his hands, which is important as anyone involved in sales will know. Makes you wonder how many times we are too eager to accept under valued offers for the sake of making a quick sale. I know I'm guilty.
To the guy who said Rick was "cybersquating": Get real! That is just stupid!
I agree with you. I have always been a firm believer in it. IMO any appraisal is just non sense & waste of money.
If your domain name is relevant to the end user's business, then they will do anything to get hold of that.
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last hand registered domain I sold was for $6500
purchased it 21 months ago for $6.95
automated appraisal today= $50
amount of parking income per month= under $1.00
traffic and parking income is 1 set of stats that could be used to form an educated guess on appraisal value, you have to look at the product that the domain represents and determine how valuable sales conversions on that product or service could become, I see a lot of domainers appraise domains with xx-xx,xxx and 99% of the time I think their estimates are too low as they are not taking multiple stats into consideration, a domain can make $0 a month parked and still sell for 5-10k+ to the right end user, you have to be able to look at your own domains and determine the premium from the trash based on traffic, ppc revenue, search popularity etc... and the most important one that gets overlooked the most "commercial appeal", I have held domains that make $0 parked because I know they will find the right end user in the future, gotta have the patience as some will sell overnight and others may take years for all the stars to align just right, best way to sell a domain for maximum ROI is to not be desperate to sell the domain, first offers are rarely the best that will come, looking to automated software for your domain values will generally leave you with the short end of the stick as there are too many stats to take into consideration for an automated service to calculate, I have heard "follow the money" in reference to obtaining domains with parking income, another form of "follow the money" is to hold your "commercial appeal" domains whether they have pay per click earnings or not as end users don't care as much as domainers do about pay per click earnings and will spend xxxx-xx,xxx+ strictly based on the domain name itself as their development will bring the traffic, about 75%+ of the end users I have sold to in 2007 never asked for parking or traffic stats and bought the domains strictly based on the domain name itself.
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I think it is fairly apparent that the domain is not worth the $750,000 paid. What would Cnn get for it if they decided tommorrow they wanted to sell it? What would it get at auction?- that is the market price. A domain isn't simply worth what a single party would pay, if that was true nobody would ever have overpaid for anything. To me this shows how non transparent (inefficient & misunderstood) this market is that a deal could actually occur at that price.
You may need to consider that buy and sell forces won't necessarily fit your notion of value. Most high end sales have a large contingent of naysayers who didn't see the value that the end-user saw. The market is made up of many tiers and they are not all subject to the same rules.
My notion of value comes from an economics textbook (the interaction between supply and demand, prices of comarable domains etc), have you heard of another notion of value other than the "it must be worth whatever it sold for" one?
That is because those sales are few and far between, for every high end sale to an enduser there is 100 other names that don't sell. Domainers seem to forget that when trying to justify sales that in reality are "outliers", market values can be seen in auction figures.
Good points, and I agree - to us domainers, this is way beyond market value. At the same time, a patient seller doesn't need to be concerned with getting market value. "Market value" is a term used when selling to other domainers (aka resellers), but those outside our industry aren't as concerned with the criteria we use to decide a domains true value. To them it either makes sense, or it doesn't. If it makes sense to company/individual with deeper pockets, you will get what the name is worth to them if you negotiate smart. Usually this is well beyond the market value as we see it.
All I was trying to say is, we don't necessarily have to settle for domainers market value. As an example, I have a sale going through right now for 100k that I was told has a market value of mid xxxx. I have noticed this trend a lot.
Thank goodness companies like CNN don't buy based off of what they could get in return, if tried to sell tomorrow.
There is no such thing as "domainers market value" and "endusers market value", an item has a value- it can't be worth two completely different amounts, and above and below that means underpriced or overpriced. ireport.com is an example of a company paying way too much, as the market gets more clearer though and people realize that either they are selling too cheap or paying too much prices should become more predictable and less volatile.
These types of sales won't ever end in my view though I think they will gradually become rarer and rarer thanks to all the sales data and information about the market that is coming out. That isn't to say domainers shouldn't try and get as high a price as they can, the name of the game (lets call it $profit) is to try and buy underpriced domains and try and sell them for overpriced amounts, as the market matures that will become harder though.
You really think these inflated sales will diminish Snoop? I would have thought that as more "eye balls" appear online, and the NEED for businesses to establish more of a commanding presence, inflated domain sales will only increase. This, coupled with the fact that the ability to purchase quality names is getting harder and harder (even in the short time I have been involved in domains). I see a Barry Diller effect taking place, where you'll have all these media conglamorates rushing to do what IAC has done, and they will pay whatever it takes to purchase these premium addresses to build a network around. Just a prediction.
Of course you have been doing this a lot longer than I have, and know what you are talking about. It just doesn't seem so cut and dry to me.
and you are right... it's a shame that most domainers only see the small picture. Does CNN truly care about "flipping" the domain? Why should that be a factor in what the domain is worth? Very short-sighted to only think along those lines. And just because people feel that $750,000 is overpriced doesn't mean that is what an end-user is thinking. Perhaps the $750K is well-below their proposed budget to acquire the name and maybe they are happy they got it "cheap" or "within budget".
I'm negotiating a deal now where I'm asking $10,000,000 for one of my domains. Will I get it? Most likely, people will assume: NO. But this name is the definitive name for an industry, it is a category killer and the main players in that industry all are well-funded or multi-billion dollar companies that many of you have heard of before. Will I sell it tomorrow? Of course not. Even if it takes me several years to find the right "combination", I'll keep trying. In the meantime, I network with people in that industry and keep letting them know I exist and the opportunity I'm offering to only 1 company in that industry. By setting my pricepoint that high I've been able to negotiate many offers of cash only, cash plus equity/stock, etc... I'm just looking for the right combination of cash + eq/stk + revenue share and they can work me down from my starting pricepoint. If I ever close the deal, it'll never make the news because these companies would not allow it.
Most appraisal services say the name is worth under $1,000.
Most offers I receive from other domainers: under $10,000
Highest offer so far from direct contact with that industry: just shy of 7 figures.
My cost for the domain: under $100.
Bottom line:
Don't look at your portfolio with blinders on. Don't sell yourself short. Don't be the one who accepts every offer just because you need the money right now. Some of you look at large sales as "lucky", when sometimes you have to make your own luck: be visionary OR be proactive OR study the art of negotiation...
Either way, good luck to everyone... there's plenty of money out there.
Yes, I'm talking about inflated sales diminishing such as $1000 names selling for $100,000 <-people paying far more than the market value of the name, not to be confused with actual rises in values due to greater demand.
I think establishing a "Market Value" for a domain is impossible. There are way too many factors involved. It's not like selling a product or a range of products within a single industry, where the prices are often dictated by production costs and competition. Nor is it like selling a home where the value is based on the general economy, local economy and other houses on the block...
The only place where a general market value exists is with domain sub-types, such as LLL.coms. The value for these are generally based off of supply and demand, comparable sales, etc... But even with these domains there are cases where buyers have spent a lot more than a perceived market value.
When we are talking about other domains, you can't establish a clear market value. You can't put it up against comparable sales because the domain is completely unique. The supply is exactly 1 and the demand is an arbitrary number. In these cases, the demand only has to be 1 person who really wants it.
Sure there may be other comparable domains, such as eReport, uReport, whatever... And I am sure there have been a lot of cases where buyers have shopped around and gone with a cheaper alternative. However, there are buyers who come up with an idea, a brand, a vision and in their minds, there is no alternative.
I think a lot of times we become desensitized to the idea of someone having a groundbreaking vision, because we hear a hundred crackpot ideas everyday. But looking at the world and business in general, it's not so easy to discount these crackpots when they come carrying loads of cash...
Personally, I think the two biggest tools a domainer can have are patience and a clear understanding of the branding process.
EstiBot.com is not at all intended to be used for determining purchase or sale prices for high-end domains or end user sales.
It is meant to be a keyword research tool for domainers who research new registrations and low-end purchases and sales. Additionally, it provides ballpark appraisals for lower-end domains, meant as a starting point for the user's own valuation. All this is said many times on the website.
The appraisals are based on a large database of domain sales, and statistical testing shows that they have a significant predictive value. This means that on an average, EstiBot is quite accurate, but it also means that individual appraisals may be way off, somewhat off, pretty close, or spot on....which one, that's up to the user to find out...
It's hard to please people with appraisals...more often than not, the general opinion is that EstiBot appraisals are "way too high". Especially here on NamePros that's the general sentiment. But I am also in correspondence with many professional domainers who usually complain that they are too low. That's partly because they are looking for end user prices, partly because their domains are often mid-to-high end.
Fortunately there are many respected domainers who actually tell me that the keyword reports and appraisals are actually quite good and many even send me donations to keep the thing going.
Then there are those who are in love with their own domain names (that have had no offers...) and get angry when EstiBot actually gives them a fairly realistic appraisal (IMO), which they feel is way too low...
I have considered taking the appraisals offline altogether and just leaving it as a keyword tool, but I personally use the appraisals as a quick-look measure all the time, and I know many domainers who use them too, and once you get the feel of what they actually mean in relation to the domain name, they can be useful.
Read below for more detail...
No, it doesn't. It appraises it at $4,500 if you use it right. Just read the instructions on the very landing page regarding usage with iDomains and eDomains...there are also plenty of other instructions&explanations on the site, which people rarely bother to read..
Of course, any appraisal is useless for this type of domain. Appraisals are useless for high-end domains anyway (I have always said this) but can be useful for lower-end domains as a quick-look summary of the keyword value.
An automatic system cannot know about end user motivation, and has very limited means of detecting brandability - EstiBot is mainly a keyword research tool and the appraisal is meant as a "quick look" pointer, as mentioned several times ad nauseam on the EstiBot site
EstiBot is meant to help with keyword research, and it more often than not gives you a pretty good ballpark value for generic keyword domains, which helps users to get a starting point for their own appraisal.
This is of course true to the point of being a truism.
EstiBot is free of charge. The appraisals are not meant to be taken literally, as said here and on the site, numerous times - they are meant to complement the keyword report and they are based on a large database of known domain sales. The average domain does not sell for $750k. EstiBot is designed for the lower end domains because I agree (and say so on the site) that appraisals are useless for high-end domains.
Thanks for the statement in the brackets very kind
I agree completely with what you said. I wish people would read the instructions and guides on my site, then they might say this instead: "EstiBot says $4,500, and shows a nice keyword profile, which means it may be an interesting domain and I should look into it and do a thorough, critical evaluation of the domain name", which is the purpose of the appraisal..
Statistically EstiBot is quite good, better than most humans. It often gets large portfolios right within a few % of the true sales prices. I've posted examples in my own thread and on the estibot site, of portfolio appraisals done before the auctions ended, they are very close.
A fresh example: the last 20 DNJournal sales amounted to $562,819 dollars. EstiBot appraisals for those domains amount to $588,290. To me this is a fantastic result for an automated system. However, it seems that people want individual domain accuracy, which is not possible, not consistently, not by any appraisals, automated or human.
Unfortunately, being statistically good is the best that an automated system can do, and being statistically good means that while on an average the appraisals are quite good, individual appraisals can be way off.
Apologies for continuing the off-topic digression.
On-topic: fantastic sale. I agree...Deep pockets both ends...that made this possible. I would have sold for much less....$xx,xxx
Rick got lucky with this one. Good luck to him.
. A very good sale, but i don't think under regular market conditions this name is worth this amount.
