Are domains undervalued?

[InternetMoney]

Do you think good domains that make sense for a web site are undervalued? I'm talking about dot com, .com, domains as they are the most credible. I think domains are undervalued by a wide amount. I don't think the other extensions, but a few, have much value.

If someone or business creates a web site to make money with it, they probably have expectations of making a least a few hundred dollars a year after expenses. However, if they put thousands into it they would or should expect profits in the thousands per year. The domain name is the first thing someone needs for the business.

If some low quality piece of land has value of thousands of dollars or some old collectable has values in the thousands, it seems to me that something needed to create a business should start with a worth of thousands of dollars. There are only a certain number of good domains and its easy to develop a domain unlike developing land. The cost to hold the investment is rather low with low reg fees and low hosting costs. Web sites are a low cost business to start, and unlimited profit potential.

In my opinion any domain that can be used for a business, makes sense, should be worth a great deal and domain values presently do not seem to be valued high enough.
What do you think?

 

[zero_haze_au]

Comparing domains to land value is not exactly a good comparison to make.

Land ownership / roof over your head is a necessity; in sydney we have a housing crises, so the value of land is fairly high. I dont see a housing/domain crises on the internet though, there is simply an unlimited amount of domains your can buy or create.

Antiques are also limited in nature unlike domain names, and have historical value again unlike domain names.

However I agree a domain name is an essential part of business both online and offline, though i believe its fairly easy to sell a domain name for a few hundred upwards if you approach potential buyers correctly.

Though at the end of the day theres too many combinations and extensions to make the majority of domains hold much value without development and simply the wider population do not consider domain names to be valuable.

 

[Jaco]

It's impossible to make sweeping generalizations or broad categorizations about things that, on an individual basis, are unique, as unique items aren't fungible.

Fungibility - Wikipedia, the free encyclopedia

 

[DomainTalker]

'Fungible', Jaco....


I agree with the OP...

Domains that describe products, or services, are valuable assets. The global economy is increasingly internet orientated, and, online electronic communication is increasingly the mainstream mechanism to reach, inform, and interact with, your markets.


Truly descriptive domains carry all kinds of benefits, imo, beyond simply type-in traffic....Memorability of your business name, for example, is a key growth driver. And, a great, appropriate, domain will help that....Marketing message is another benefit of a great, appropriate, domain aligned to your business objectives. It'll reinforce the message...And, many more benefits.


As long as unique web addresses are core to online communication, domains will be valuable....

...and, I believe, will be much more valuable in the future.

.

 

[labrocca]

Unlike land domains can expand with one decision by ICAAN and a mindset change. Probably not likely to happen too soon but eventually things will change. If it's 20 years or 50 years technology will probably make domain extensions obsolete at some point. The mission of ICANN is not to make domains a commodity but to allow addressing for ease of use on the internet. At any point a decision could be made to completely devalue domains. Remember that every single domain owner is actually just a rental contractee. There is a reason why all agreements are maximum 10 years with ICANN.

I'd say get all the money you can while you can.

 

[mrjohn]

As concepts go, "undervalued" is hard to pin down. Are most domains undervalued? Hell no. Most domains are utter garbage.

 

[werty]

I believe domains are not undervalued. But I do think sale prices have decreased along with the economic situation. But demand is starting to rise again. What better proof of this than ICANN raising registration prices for .com and .net?

 

[mrjohn]

Please don't imply ICANN knows what they're doing. That level of comedy has been known to hospitalize people with split diaphragms.

 

[werty]

LOL. But verisign's last quarter financial results also demonstrate this. Registrations rose by a lot!

 

[accent]

Internet sales are growing by double digits per year, the advent of mobile computing will assure this rapid growth will continue for many years. Good .com domains are limited, the market for other extensions lags behind.

.... and simply the wider population do not consider domain names to be valuable.

Absolutely correct - the internet is still young and this is sure to change, dramatically.

 

[wayne_chance]

Domains are like land because certain domain will always be valuable. If i sell widgets then widgets.com is the boardwalk property. Sure they can add new .domains but they start with low value. If someone is searching for widgets, widgets will always be high on the search list for free, which can be worth a lot in adverting money. People already spend say $500 a day to get $1000 worth of business. IF a domain can give them $200 worth of traffic per day then it's worth a lot over time, then the domain can always be sold in the end possible for more.
Just as i can by cheap land in the outback for a fraction of the cost in Sydney, no one wants to live there. So, a1-widgets is the burbs, widgetcompany, greatwidgets in the boondocks. If your a widget seller there are only 100 top properties available, 1000 suburbs... well there maybe 1 million widget sellers. The top widget sellers may do 100k per year in business so 10k for a domain is not bad. Even 50-100k if it's a web business they can pay ... a lot more because some web business need the right domain, without - no business.

 

[JamesDavid]

Are domains undervalued?

Ask yourself this question: Can anything in an open market be undervalued?
The answer "no"

Now domains can be speculatively undervalued in the sense that someone BELIEVES they will be worth much more one day so today they are "under valued" in a speculative way.