| NamePros Member Join Date: Jun 2004
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| Here is an article about domain valuation model. I find it very usefull
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Extension (Top Level Domain)
The most valuable domain names are .com's. All other extensions (.net, .org, etc.) are usually worth 15-30% of their .com equivalent.
Character Length
In general, the longer a domain the less valuable.
The longer a domain is, the harder it is to spell, say, type, and remember. Typically, beyond 10-15 characters, a domain begins to lose significant value.
Number of Words in Domain
The most valuable domain names are one word. Some two-word domains can still have good open market value, but beyond that, the domain begins to lose value. For example, "Business.com" is worth a considerable amount more that "TheBestBusiness.com". The one exception to this rule might be prefixes. Some prefixes like "e" and "i" can be used without greatly reducing the value of the domain. However, the prefix adds length and many times, a bit more complexity. Therefore, the more words in a domain, the less valuable. For our model, we consider each grouping of numbers as one word. Also, each prefix, suffix, acronym, or abbreviation is also considered one word.
If Numbers exist
Combining numbers and letters in a domain is almost always a bad idea. Numbers are inherently harder to remember. As a side note, every website is actually referenced by a number called an IP address. The entire domain system was built so text (letters) could be used to reference numbers to make remembering websites easier. Who is going to remember the IP 216.247.233.21? The name "URLbuyers.com" is much easier. Try "http://216.247.233.21/" to see for yourself. Therefore, our model values domains with numbers less than domains without numbers.
If Hyphenations exist
Hyphenations are another concept that make it a bit harder to remember a domain. They add 1 more character to an otherwise shorter domain name. When telling people the site name, do you say "dash", "hyphen", "subtract sign", "that character right next to the zero on my keyboard"? "URL-buyers.com" is visually easier to see the word separation, but in general, people would rather just type "URLbuyers.com" Hyphenated domains also receive a lower value than non-hyphenated domains.
If Misspellings exist
The concept here is clear. "URLbiyers" or "URLbuyerz" or "URLbuyyers.com" just aren't worth much. The only cases where these names are extremely valuable are when the domain is very close to a VERY common word that everyone types. Most businesses aren't going to brand their name or their products based on a misspelled domain. Misspellings also devalue a domain.
If Abbreviations exist
In general, abbreviations devalue a domain name. In some rare cases where the name spelled out is extraordinarily long, the abbreviated version might be worth more. Domains like "USA.com" would be worth more than "UnitedStatesofAmerica.com" simply because of the length and ease of typing. However, for most domains, abbreviations devalue the domain. Domains like "InternetHwy.com" are going to get a lower valuation than "InternetHighway.com"
Substitutions also fit in the "abbreviation" criteria of our model. ForSale.com is worth much more than "4Sale.com". ShoesForYou.com is worth much more than "ShoesForU.com" Other examples of substitutions would be:
"4" for "for" or "four"
"2" for "to" or "two"
"U" for "you"
"R" for "are"
"0"(zero) for "O"(letter)
"1" for "l" (lowercase L)
use of "DOT"
use of "WWW" ie "WWWbuyers.com" instead of "buyers.com"
If domain is Generic
Generic means that the word relates to an entire group or class - ie. "general" and is not associated with a trademark or brand name. Generic domains are better overall since they can be used for multiple purposes. The domain "Tires.com" is worth much more than "EagleTires.com" Eagle is a company that produces tires and has branded their product as not just any tire, but an "Eagle" tire. Would Goodyear ever consider buying the name "Eagletires.com"? No. They would, however love to use "Tires.com" so they can say they're the best and biggest tire manufacturer. Generic names have more uses, therefore more demand, therefore, a higher value.
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Industry and Focus
Market size and positioning within the market definitely play a factor in the value of a domain name. Our model has incorporated many various "Industries" which attempt to provide a classification for every possible domain. These classifications take into account the market size, and thus the domain's value due to supply and demand. Industry Focus determines "how much" the domain applies to the broad industry classification.
1. Entire Industry
If the domain applies to the entire industry, in general, it's value will be greater than a portion of the industry. Consider the name "Entertainment.com". This is the broadest focus classification since it captures the essence of the entire Entertainment Industry. Entertainment.com could be used for music, movies, television, radio, board games, or an almost unlimited number of things which relate to the Entertainment Industry.
2. Major Portion
This is a smaller, but still large portion of the applicable industry. A possible domain would be "Music.com". Again, we're not saying the Music Industry is small, but we're sure you'll agree that it's not as large as the Entertainment Industry. Another example for a "major portion" focus might be "Furniture.com" (within the Consumer Goods Industry). For this domain, consider how the traditional retail channel markets furniture. Since you can probably think of many different retail stores in the Consumer Goods Industry that only provide furniture, this is definitely a candidate.
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3. Focused Subgroup (Niche)
Focused Subgroup or "niche" is a smaller portion still. This classification would be used for targeted, specific domains. Revisiting our furniture example from Option 2 above, consider the domain "Chairs.com". It certainly is more difficult to think of stores that ONLY provide chairs versus those that provide all types of furniture. Even though Chairs.com may be an extremely valuable domain, it is obviously targeted to a smaller market than "furniture.com" and thus would be valued using a smaller market size within the Consumer Goods Industry.
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Marketability - How easy is domain to say and remember (and understand)?
This aspect of the common sense valuation model attempts to capture the effect the domain name has when people say and hear it. Can they remember the domain? Is it easy to say and/or visualize? Our model attempts to capture Marketability on a scale of 1 to 10.
1. Domain is impossible to say
If the domain is impossible to even say, it's marketability will be extremely low. Names such as "Excelsier.com" are challenging to say which also leads to confusion when trying to spell (or type) it. The domain might sound cool, but because of it's challenging pronunciation, it gets a low marketability rating.
2. Must help people say domain (See option 1.)
3. People have difficulty saying domain (See option 1.)
4. People have difficulty recalling domain
Just because people can say it, doesn't mean they can recall it easily. Consider the domain "HelpHelpHelpNineOneOne.com". It's simple, 3 "Help" words in a row followed by 911 spelled out. However, when trying to market this name, who's going to remember that it is 3 Helps in a row? Or that "Nine One One" is spelled out versus in numeric form? A domain such as "Help911.com" would be more marketable.
5. Moderately easy to recall domain (See option 4.)
6. Slightly easier to recall than average (See option 4.)
7. People can recall it immediately (See option 4.)
8. People understand it immediately
Now we're getting to the very marketable names. Not only can they SAY and REMEMBER these names, but they also UNDERSTAND them. When you understand a domain, you're much more likely to remember it. Not only is "Car.com" easy to say and remember, but you know what a car is. The higher options, 9 and 10 are for those names with longer-retaining understanding.
9. People understand and can recall 1 day later (See option 8.)
10. People understand and can recall 1 week later (See option 8.)
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Brandability - Can the domain describe site's content
This aspect of the common sense valuation model attempts to capture how well content can be associated with a domain. Highly brandable sites are those in which thinking of the content reveals the domain. Brandability is also measured on a scale of 1 to 10.
1. People are confused by the domain name
Consider the name "Bambosa.com". It's short, somewhat easy to say, and very generic - there's lots of possibilities for content associated with this site. But when people hear it, they certainly won't know what the site is about just by the domain name alone.
2. People question the domain's purpose (See option 1.)
3. Challenging for people to associate web content (See option 1.)
4. Somewhat challenging for people to associate content
(See option 1.)
5. Moderately easy to associate web contentn (See option 1.)
6. Slightly easier to associate with web content (See option 1.)
7. People can guess web content fairly easily
When you hear "house.com" what do you think of? It's easy to say, remember, and understand, (marketability) but what is the site used for? It could be for selling or buying your house. It could be used to help you take an inventory of everything in your house. It could be a site to help you build a house. It could also be for financing to help you purchase your house. If you thought of each of the things just mentioned, it is unlikely that you would go to "house.com". You'd probably try "realtor.com", "homeinventory.com", "homebuilder.com", and "mortgage.com" before "house.com".
8. People can quickly guess web content (See option 7.)
9. When thinking of content, domain is close
Now we're dealing with the EXTREMELY brandable names. Not only do people know what the content is by the name, but if they think of the content first, the domain comes to mind. Think about a site for helping you with your taxes. There's a domain! "Taxes.com". A close name would be "MyTaxes.com". Also consider "Conflagration.com". By the way, conflagration means "fire". When you think of something burning, you wouldn't think of "conflagration" you think of "fire". Therefore, how common a word is definitely affects it's brandability.
10. When thinking of content, exact domain comes to mind (See option 9.)
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Valuation Model Summary
In Summary
The most valuable domain names don't have any misspellings, hyphenations, abbreviations, or numbers. They are .com's with one word, less than 10 characters, apply to a large market, are easy to say, remember, understand, and can be easily associated with a site's content. If your find any of these, be sure to register them! If you are attempting to value one of these rare domains (i.e. computer.com, beauty.com, business.com, etc.) that domain could command a significant premium on the open market ($500,000+).
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Most domains have some good characteristics with a few less desirable characteristics. These domains can also be valuable. The reality is that most domains are worth less than $1000, and names like "I-Have-The-Best-Business-On-The-Web-4-U.com" aren't even worth the registration price. Let our FREE Domain Valuation Tool help you choose.
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07-12-2004, 05:01 AM
Domain Valuation Tools 
