discuss Is the current value of a domain asset its liquidation value today, or is it...

[News]

On my opinion it is very difficult to put a value on a domain name. There are many things to consider. Domains are not like stocks or anything else. They are a category on their own. I think that the more domains you have the easier it gets to put a wholesale value on them. Just like GoDaddy does with the big portfolio purchases. If course the bigger the portfolio the smaller is the average price paid per domain.

“Is the current value of an asset its liquidation value today, or a discount to the future profits you expect to make? In a liquid market like Wall Street they are practically the same, with a tiny bid:ask spread, but in domain names there is no liquid market, and very poor public education on the value of super premium .Com domain names for corporations...

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[briguy]

Totally agree with "very poor public education on the value of super premium" or even with the so-called premiums!

 

[Mister Funsky]

Totally agree with "very poor public education on the value of super premium" or even with the so-called premiums!

In this day and time, so many years after the internet was born, it is amazing the ignorance (lack of knowledge) many executives and business owners have with respect to domain name values.

Domain names ARE real estate in the virtual world and the same logic applies as it did/does to most brick and mortar businesses...location, location and location are the 3 most important things to ensure success.

 

[briguy]

In this day and time, so many years after the internet was born, it is amazing the ignorance (lack of knowledge) many executives and business owners have with respect to domain name values.

Domain names ARE real estate in the virtual world and the same logic applies as it did/does to most brick and mortar businesses...location, location and location are the 3 most important things to ensure success.

I agree about domains and real estate! Tried to view my opinion in this Domain & Real Estate Comparison thread of mine, awhile back!

 

[Joe N]

Much like real estate, an unused domain isn't an asset unless someone is willing to buy it. Until that time, it is a liability.

 

[trelgor]

I guess I’m in the liability business then.

 

[urlurl]

i would say for most small business that have one or many domain names they would list it as a liability - since it cost money to acquire the name and they have to pay the renewal fee every year (like rent)

for 99% of end user purchasers (i would think) would view domains as an expense, since they are buying with the intent to use and not resell.

 

[BaileyUK]

for 99% of end user purchasers (i would think) would view domains as an expense, since they are buying with the intent to use and not resell.

Indeed these are the exact words used by a London Property business that purchased one of my domains just yesterday (outbound sale)

" Yes, I definitely want the domain, It's just not an expense that I was expecting or budgeted for"

 

[Mister Funsky]

a London Property business that purchased one of my domains just yesterday

If you could share any details it would be appreciated, but I know sometimes it is best not to.

I am curious if the name had organic traffic and how much...did the buyer recognize that the traffic would be to his/her benefit? Thanks for sharing.

 

[BaileyUK]

If you could share any details it would be appreciated, but I know sometimes it is best not to.

I am curious if the name had organic traffic and how much...did the buyer recognize that the traffic would be to his/her benefit? Thanks for sharing.

What I can share (without the domain disclosure) is what prompted the sale and purchase.

The domain sold is a co.uk whereas the buyer was using one of the new extensions
I had an offer on Sedo for the domain, and as always, any offer prompts my investigation of usage etc. this identified several possible buyers. But, I was confident that none of these had made the original Sedo offer. I then (quite easily) identified the Property business as being the best beneficiary of taking ownership. they like a couple of others were using the made-up word. So 'outbound' contact was made by myself. I had offered a discount for a direct sale but the buyer really wasn't very clued-up about domains. So I ended-up dealing with his website builder. Funny enough the buyer wanted to complete the sale via Sedo for security and escrow, so I relisted at our agreed price plus costs. Done and dusted and Sedo still got their cut.

I doubt it's really going to ramp-up his business much but we both knew it was going to add to his internet credibility and it sold at twice the original 'final-offer' (three times increased) originally offered on Sedo

I do enjoy engaging with end buyers

 

[Mister Funsky]

I then (quite easily) identified the Property business as being the best beneficiary of taking ownership. they like a couple of others were using the made-up word. So 'outbound' contact was made by myself. I had offered a discount for a direct sale but the buyer really wasn't very clued-up about domains. So I ended-up dealing with his website builder. Funny enough the buyer wanted to complete the sale via Sedo for security and escrow, so I relisted at our agreed price plus costs. Done and dusted and Sedo still got their cut.

Very well done! Thanks for the reply...it will help me and others I am sure.

 

[BaileyUK]

Very well done! Thanks for the reply...it will help me and others I am sure.

Thanks, I'm sure a lot of practices, pricing and sales negotiations that many of us take for granted (after years of practice) aren't that apparent to new entrants to the domain market. But like any market it looks too easy from the outside, whereas we know it takes work

 

[Smiles76]

Premium names impact on businesses are often overvalued by domainers. First off, the generation of type in users is dying off and the SEO benefits are waning for keyword based domains. Secondly, customers are far more accustomed to brand names which means branding keyword domains is not as easy as many believe. Imagine if Starbucks was just called "coffee shop". It would be quite difficult trying to brand such a boring generic term. Finally, if a premium name was as beneficial as most domainers claim, Beer.com would still be in business because that is as premium as it gets. Yet, even with that name they went out of business because at the end of the day it's the business behind that name that really matters.