The "real" value of LLLL.com domains

[accent]

I have been playing around with some numbers I found on this forum, came up with an interesting thought experment. Someone said that the cheapest 2 letter .com you probably could get for, say, $60K.
The cheapest 3 letter .coms run about $2K.

Do you guys agree with these (very) rough guesses?
If these numbers are in the right range then since:
there are 26 letters,
60K is a little more than 26 times 2K

Then does it follow that:
2K should be a little more than 26 times the "natural" current value of the lower tier LLLL.com domains?

In other words the cheaper LLLL that you can register today are "worth" around $60 and the market is held back by the fact that many domains are still available.

The only flaw I can see in the above is that the reg fee is a higher cost as a percentage of value in the cheaper domains.

Have at it guys -- That seems way too high, what am I missing?

 

[fonzie_007]

If you are going to run numbers, you would need to compare the total # of LL.com's with their price. Then, you would need to compare the total # of LLL.com's with their prices. Then, you should be able to look at the total number of LLLL.com and extrapolate what their "true" value may be.

Of course, because there are still LLLL.com's left to be regged, their true wholesale value is currently regfee (for crummy LLLL.com's) to high xx (for pronunciable LLLL.com's).

 

[accent]

If you are going to run numbers, you would need to compare the total # of LL.com's with their price. Then, you would need to compare the total # of LLL.com's with their prices. Then, you should be able to look at the total number of LLLL.com and extrapolate what their "true" value may be.

That is what I did:
Total Number of LL's = 26 X 26
Total Number of LLL's = 26 X 26 X 26
so Total Number of LLL = 26 X Total Number of LL

Total Number of LLLL's = 26 X 26 X 26 X 26
so Total Number of LLLL = 26 X Total Number of LLL

 

[Lasher]

Uhoh, I hope your math is wrong, because if it isn't that makes my LLLLL domains worth around $2.30 and my LLLLLL.com domains worth approximately 8.8 cents. :hehe:

 

[Optinom]

That is what I did:
Total Number of LL's = 26 X 26
Total Number of LLL's = 26 X 26 X 26
so Total Number of LLL = 26 X Total Number of LL

Total Number of LLLL's = 26 X 26 X 26 X 26
so Total Number of LLLL = 26 X Total Number of LLL

Your calculation is wrong. There arent 26x26 LL.coms.

Two character names are now restricted in GTLDs and only existing names can be renewed. Even names that drop cannot be caught!

 

[accent]

I knew there had to be a catch somewhere. Any idea of how many LL.com names there are?

Lasher - These numbers are for the bottom of the barrel names. Surely yours are better than that?

 

[VURG]

Do you guys agree with these (very) rough guesses?
If these numbers are in the right range then since:
there are 26 letters,
60K is a little more than 26 times 2K

...

In other words the cheaper LLLL that you can register today are "worth" around $60 and the market is held back by the fact that many domains are still available.

...

Have at it guys -- That seems way too high, what am I missing?

The Real value of LLL-QF---49.com's (Domains with 3 letters and -QF---49 at the end)

There are 26^3 LLL.com domains
There are 26^3 LLL-QF----49.com domains

Therefore a lesser LLL.com domain is worth the same as a less LLL-QF----49.com.

I've thought similar to you in the past but the value of domains is set by supply AND DEMAND. That's what your missing factoring in DEMAND. A three letter domain has so much more potential than a four letter domain. A lot of three letter domains are better than their two letter alternatives. (e.g. AAA.com is better than AA.com) Often that extra letter adds that extra bit of information to an acronym that a business wants. A fourth letter is way too much.

Try coming up with a 4 letter acronym with 4 letters and two of them have to be Q and V and try the same with a 3 letter acronym with Q and V and you should see that it is a heap more easier and practical. You have to take into consideration that most people come up with the business name BEFORE their domain name. Why would you have a business name starting with 4 words with rare letters?

No type in traffic is another issue with 4 letter domain names but I am guessing that many 3 letter domains have very little.

That said I still like 4 letter domain names!

 

[zestydomains*com]

Great Thread and Discussion.

I do believe that all LLLL.coms will be registered at some point in the future. They have great potential, but are too in a different category from their LLL.com and LL.com brothers and sisters.

Demand has been high for LLL.com and LL.com domains, and with deminishing availability (as more and more fall in end-user hands), prices have risen considerably, and these prices are at very high multiples over the cost of renewal/registration fees.

When LLLL.com domains are considered, the premium lettered combos are pretty much all registered, and they may indeed be worth some multiple of reg-fees. Lesser letter combos still remain available, and thus the minimum value for the group still remains at reg-fee.

Something to consider in this regard that is working against LLLL.coms are that their cost is still high in reflection of reg-fees. If vxzq.com (currently available) were registered today at reg-fee, to maintain ownership of this domain, the registrant would have to again pay reg-fees one year from now (and every year thereafter), and thus the cost of reg fees is substantial to the cost of the lesser LLLL.com combos.

On the other hand, ~ $8/year for renewal for LLL.coms and LL.coms is a drop in the bucket compared to their values, even among the least quality letter combos.

Thus, the cost to speculate in the LLLL.com does incur a greater risk than the LLL and LL marketplace. This has a lot to do with the reason that LLLL.com domains are not sold out yet, but over time I still imagine that LLLL.coms will one day have their glory days.

Great thread again and I look forward to others thinking.

Thank you,
zesty

 

[accent]

Zesty - Your 3character.com website got me thinking on those lines - particularly the reg fee issue. I like the idea of the short domains. I relate it to collecting Silver Dollars - there is a huge market for Silver Dollars because it is a segment of Numismatics that has fairly easily defined values, enough pieces to make a liquid market and still scarce enough to be desireable. A newcomer can go into the Silver Dollar market or the short domain market with a lot more confidence.

And both markets are always looking around the corner to see if Wall Street is coming.

VURG - I am not sure what you are getting at with your LLL-QF----49.com point. I would expect that LL-QF----49.com domains have 0 value, so 1/26th of 0 is still 0.

Demand is the key, as you mention. Sedo reported a 60% rise in the number of domains it had for sale in the last 6-8 months - I imagine if that continues the pool of LLLL will dry up and they will seek their natural level, what ever that really is. You may be right about 3 letters being more likely for a business name than four, although that is the created names category. A LLLL name I almost regged 9 months ago now has the website of a law firm (((expletive deleted))). Profesional associations have a small but random number of partners. I wonder how many LLL and LLLL end user names are the initials of people, rather than a "brand".

 

[VURG]

VURG - I am not sure what you are getting at with your LLL-QF----49.com point. I would expect that LL-QF----49.com domains have 0 value, so 1/26th of 0 is still 0.

Sorry if I was confusing.

I'm just trying to point out that the basis of your argument in the first thread is entirely based on the supply of the domains. A combination of supply and demand needs to be looked at in order to see the value of a domain. Therefore you need to analyse the factors that influence demand. For example a LLL.com domain in your collection is considered a status symbol for some domainers.

Maybe the LLL-QF----49.com domains was a bad example.

Maybe comparing LLL.com domains with L-L-L.com domains would have better.

Personally, I wouldn't be suprised if LLLL.com domains become more valuable than 1/26th of a LLL.com domain. However I also wouldn't be suprised if they never get close. There is so many factors to take into consideration.

I also agree with you on liking 3character.com. I have found it extremely useful in finding good deals and pricing my domains. Good Job Zesty!

 

[accent]

Personally, I wouldn't be suprised if LLLL.com domains become more valuable than 1/26th of a LLL.com domain. However I also wouldn't be suprised if they never get close. There is so many factors to take into consideration.

Yes - So true --- And if we are going to play in this market we need to quantify as many as we can, as well as we can. The price comparison between LL.com and LLL.com is the demand part of the original post. Price includes demand. That that ratio was somewhere near 1:26 surprised me. Applying that ratio to LLL.com VS LLLL.com is full of outside variables, some of which you have mentioned. Another is the "I'll just wait and get it later" feeling when confronted with 70,000 unregistered names. Another is having to pay reg fee equal to your investment every year, as Zesty points out.

The large number of LLLL.coms could work in their favor should prices rise enough. Seems like in Silver Dollars the collectors really came out around $75 to $100 for a common-but-nice piece. Enough so it costs real money, not enough to hurt. The same thing could well happen with LLLL.coms. For some reason people like to collect these things, myself included.

The domain field is tiny, as financial markets go. Yet it is limited real estate in a very real sense. A single investor could buy ALL the remaining LLLL.coms for about a half million dollars per year. Lots and lots of guys would not even consider so small an investment, it would not be worth the bother.

 

[fleshas]

Reg fee ;] Tons of free domains..

 

[sdtrader]

In my thinking the value of anything including domains is a relative relationship to its scarcity but not a direct relationship.In otherwords if there is one Babe Ruth bubblegum card and 10 Mickey Mantle cards the Babe Ruth card is worth more but not nescessarily 10 times more.It may likely would be worth 100 times as much.

What I am trying to say is I doubt aaaa.com will ever be worth 1/26 the value of aaa.com

 

[Lasher]

Other than common words and "no brainer" acronyms, it is impossible to predict the value of any given LLLL domain name, so many companies have so many different uses. Simple example, RHCE wasn't worth a whole lot, until RedHat Linux created the Red Hat Certified Engineer program and went and bought RHCE.COM from the owner. What you *can* do is choose names based on the most popular words by letter and hope you pick one somene wants. I ran a scan on a dictionary file I have of just under 50k words and the results by letter are:

A - 3503
B - 3155
C - 4413
D - 2785
E - 1942
F - 1872
G - 1371
H - 1497
I - 1986
J - 405
K - 380
L - 1360
M - 2373
N - 821
O - 985
P - 3408
Q - 240
R - 2741
S - 5099
T - 1927
U - 806
V - 635
W - 1100
X - 12
Y - 119
Z - 59

Obviously this over simplifies, takes no account of related letters together such as UK, EU, ISP, etc, but at least help stack the odds a little in your favor if you're speculatively grabbing LLLL domains. I

Pretty new around here, so could use the PR if you find this useful

 

[3par]

In my thinking the value of anything including domains is a relative relationship to its scarcity but not a direct relationship.In otherwords if there is one Babe Ruth bubblegum card and 10 Mickey Mantle cards the Babe Ruth card is worth more but not nescessarily 10 times more.It may likely would be worth 100 times as much.

Agreed.

What I am trying to say is I doubt aaaa.com will ever be worth 1/26 the value of aaa.com

Not quite. Only because AAA is a brand. Can you say AAA is only 1/26 of AA?
:hehe:

 

[sdtrader]

This was only a statement of principle in response to relative value - not an overemcompassing rule.
Other factors obviously mitigate the principle.

New cars are worth more than older cars.Well generally speaking unless you have mint 1967 camaro.

Agreed.


Not quite. Only because AAA is a brand. Can you say AAA is only 1/26 of AA?
:hehe:

 

[wow!]

If some speculators would want, they'll reg all LLLL .com names and sell each other for $xxx-$xxxx
Now the worth of LLLL.coms will be higher.
Thats what happened to the LLL .coms.
1-2 years ago LLL .coms value were $1k
No reason for them to worth these days $5k-50k.
Demand could be a creation of fake sales...

Just my 2cents opinion...

 

[Kenny]

If some speculators would want, they'll reg all LLLL .com names and sell each other for $xxx-$xxxx
Now the worth of LLLL.coms will be higher.
Thats what happened to the LLL .coms.
1-2 years ago LLL .coms value were $1k
No reason for them to worth these days $5k-50k.
Demand could be a creation of fake sales...

Just my 2cents opinion...

I have wondered that myself. This would be the same as stock manipulation.
If this is in fact the case, we (the small players) are in real trouble.

When you see a sale of $10,000-$20,000 for a name and 6 months later it still sits
on a Reg House parking page, or worse, Page Not Found, you have to wonder about
the agenda of both buyer and seller.

This is not only LLL .com sales that could be suspect under this scenario... hmmm.

Your 2cents opinion is scary, wow!, but worth much more if true.

Peace,
Cyberian

 

[Keral_Patel]

Well I have been late and the LLL.com's were gone so I didn't wanted to cry afterwards for the LLLL.com's and right now I am sitting on a bunch of them. Maybe I will get something out of them in 4 or 5 years. Who knows. But then I will surely retire. :D

 

[3par]

Well I have been late and the LLL.com's were gone so I didn't wanted to cry afterwards for the LLLL.com's and right now I am sitting on a bunch of them. Maybe I will get something out of them in 4 or 5 years. Who knows. But then I will surely retire. :D

So what is the price range you expect to sell out your 4 letter domain? Just curious.