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How to Correctly Appraise New Generation of Domain Names

Labeled as news in Domain Industry News, started by Brands.International, Sep 21, 2020

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  1. Brands.International

    Brands.International formerly lolwarrior VIP

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    Brands.International for Medium.com

    How to Correctly Appraise New Generation of Domain Names
    (2020 Appraisal Guide for New gTLDs)


    Each domain investor should know the value of their domain names. Before 2014, we had 3 main domain extensions in internet space: .com, .net and .org. Domain names in those extensions have more-less the same yearly renewal fee (approximately $10), and as their sales were recorded in public sources for 30 years, it becomes easier and easier to appraise them.

    Since 2014, hundreds of new domain extensions (new gTLDs) were introduced into internet space. Now we can register names in extensions like .life, .world, .live, .online, .store, .xyz, .photo, .shop or .global.

    In the following text, I will quickly go over appraisal methods for legacy domain names (.com, .net, and .org), and then I will discuss appraisal methods for new gTLDs

    Read More
     
    The views expressed on this page by users and staff are their own, not those of NamePros.
  2. Mytz.com

    Mytz.com Top 4L [email protected] IEIE.com CUTU.com NESU.com KKIK.com VIP Gold Account

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    After all these years,
    COM domain name is still in the position of number one
     
  3. Brands.International

    Brands.International formerly lolwarrior VIP

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    That's pretty amazing :)
     
  4. slader23

    slader23 Always On The Bleeding Edge. VIP

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    One valuation method that should be included is whether or not a particular SLD.NGTLD combination is registered in .COM i.e SLDNGTLD.COM with retail potential increasing on a sliding scale based on extensions taken.

    I would discount value on any given SLD.NGTLD that is not also taken as SLDNGTLD.com. In addition should that SLDNGTLD.com have significant vertical potential then you can associate the SLD.NGTLD as having a fraction of its value for example Personal.Loans would in my opinion (some investors may still think its worthless) be worth somewhere between 5% and 20% of the.com PersonalLoans.com which sold for $1mn back in 2011.
     
    Last edited: Sep 23, 2020
  5. Brands.International

    Brands.International formerly lolwarrior VIP

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    Hello Albert,

    yes, this is also a notable way of getting some value estimates - I thought of including this as well when I was writing an article (as Method no.4), but the article would be too long already. Thanks for noting!

    Marek

    PS: anyone with more methods in mind to do value estimations for new gTLDs - please share here :)
     
  6. Brands.International

    Brands.International formerly lolwarrior VIP

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    Just to note, I agree with the notion that we should check whether word1word2.com is registered (and also how much it sold for in past, and potentially also how much they are asking for it in the present) when evaluating word1.word2 new gTLDs, but I disagree with automatic discounting "between 5% and 20%" when it comes to new gTLDs, comparing to .com value.

    I think this needs to be evaluated on a case to case basis, in many cases I would personally not discount at all. But this is a bit separate topic, which has more to do, in my opinion, with domain parameters which are used for example in the Rosener's equation (I plan to write a separate article for this topic very soon).
     
  7. garptrader

    garptrader Top Contributor VIP ★★★★★★★★★★

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    Market price is the pricepoint at which a buyer is willing to buy AND a seller is willing to sell. Yes, it still frustrates me to see how much companies are willing to pay for attorneys, consulting, travel, website development, marketing, etc yet will at the same time resist paying more than low $xxx for a domain. Regardless, an end user's ability to pay is not their willingness to pay for a good or service. Bill Gates, Mark Zuckerberg, Jeff Bezos could pay $5000 for a bottle of water but they will not do that. And quite often end users see little difference between your domain which might be preferable and a similar domain with an extra word or in an alternative extension which is available under $50.
     
  8. dombastic

    dombastic Established Member ★★★★★★★★★★

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    Yes, it is.
     
  9. slader23

    slader23 Always On The Bleeding Edge. VIP

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    You may have misunderstood me 5%-20% was an example but regardless there should be a discount because the value of the SLD.NGTLD is derivative to to the SLD.COM, you may not agree with that but imho that is the reality. The discount applied is what should be considered case by case based on additional factors like TLD spread (tlds taken, developed, for sale), long term utility i.e is it tech related? If so is that tech obsolete? If not is it early or late in its dev cycle? etc. It'll depend on the robustness of your research.

    Can you provide examples where you would not discount the value of an NGTLD vs the .com? I'd like to better understand your reasoning.
     
    Last edited: Sep 24, 2020
  10. HotKey

    HotKey Made in Canada VIP

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    Why would you discount a superior formation of a domain name, the whole point Warrior is tackling is that determining new G's value is not a derivative nor dependent on what we know on .com; rather it is just one out of many factors to take into consideration.

    It really should be the other way around, examplename.com sells for xxxx makes example.name that much more. It is really not that extraordinary of a concept. Just because we have a gold standard doesn't mean we can't save up for a diamond ring.

    **

    Thanks for the article, a great break down on formulating a sort of methodology on new gTLD valuations.. talk about a tough job!

    Where you mention semantics rolling over across the dot, I think in a sense we could say that the .com extension covers the semantics of "generic trademarking" where, kind of like Google or Twitter, where its become a real word that goes with just about anything. And that's what keeps the extension so desirable. Nothing really has to be "matched" with .com, it's a given and already a natural fit.

    When something has a 30 year head-start in a race, its probably time to rebuild the track and rewrite the rules- the new competitors are using different fuel and different vehicles.
     
  11. Brands.International

    Brands.International formerly lolwarrior VIP

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    Thank you @HotKey, this is exactly how I think as well. I do not feel that we necessarily need .com comparisons (proposed above as Method no.4) in order to appraise new gTLDs, while I of course do understand why some investors (even some new gTLD investors with .com roots) are using/considering it as well. But for me personally, this has just a smaller significance in my overall approach. This also shows that there are so many approaches to evaluate something as there are investors :)
     
  12. CraigD

    CraigD 360promo.com VIP

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    I appreciate your F-1 analogy - while those changes supercharged development, they also cost a lot of money and priced out most gentlemen drivers and small teams. The same thing happened with float-plane racing between the wars, leading to phenomenal advances in airframe and engine development, but at such a cost that only governments/military could afford to field teams for the last few Schneider races ;)
     
  13. Indianad

    Indianad Upgraded Member Gold Account

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    Thanks for the information. It's appreciated!!!:xf.smile:
     
  14. garptrader

    garptrader Top Contributor VIP ★★★★★★★★★★

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    It cannot be denied that there is a considerable gap between how domains are used (to promote business products and services oftentimes involving millions of dollars in revenue) versus the end user perception that the domain name is not that important (and thus no need to pay a premium price for one).
     
  15. Brands.International

    Brands.International formerly lolwarrior VIP

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    I am very glad you found it useful, @Indianad :)
     
  16. Brands.International

    Brands.International formerly lolwarrior VIP

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    I think if more domainer investors would approach end-users in a professional manner, and were actually able to explain why domain names are important to end-users, that would greatly help overall. At the moment, still, a lot of domain investors act anonymously, and in addition are basically just passively sitting on domain names, waiting for 1mil USD offers to happen :)
     

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