This week several .MOBI auctions achieved some level of notoriety on the NP board and in the domainer community - of these, I had my eyes on Laptops.mobi and 600.mobi
Laptops.mobi achieved a final bid of $33,000 in a furious fight to the finish, creating a buzz in the domainer community that almost set my cell phone on fire with text messages and voicemail. I was in the airport returning from a business trip. My phone buzzed so constantly with information that my left leg became numb.
$33,000! $33,000!
In the meantime, 600.mobi had a nice run and finished at $3,250. It's the first of my 191 MOBI portfolio that I decided to sacrifice. I sold it for informational purposes as much as for a little cash infusion. Afterall, I've spent as much money as the next guy (ok, maybe not Jean...!) on my MOBI e-realestate.
So... this begs the question...
"WHY IS LAPTOPS.MOBI WORTH A MULTIPLE OF 10X 600.MOBI IN AUCTIONS OF EQUAL AWARENESS TO THE DOMAINER COMMUNITY AND COMMUNITY AT LARGE?"
My opinion is that Laptops.mobi IS IN FACT worth a 10X multiple of 600.mobi, and that both Laptops.mobi and 600.mobi are reflective of very good deals in this budding MOBI marketplace.
(1) THE DOT COM COMPARISON:
Think of this in terms of DOT COM for a moment. Laptops.com undeveloped, in my opinion, is a $2-4MM name. Cameras.com just sold at auction for $1.5MM. Cameras has a lot in common with Laptops - both high dollar/unit electronic consumer product items, both high volume unit drivers worldwide, both from remarkably competitive industries with multibillion dollar companies driving the bulk of sales, and both with a strong percentage of purchases online.
600.MOBI is more like a 2 or 3 numeral .COM that achieves type-in traffic. It doesn't reach out to any particular industry as, for instance, 69 might hit adult targeted traffic (hehheh... bevis) or 800 might reach out to those seeking a toll free directory or so on. There isn't an obvious targeted marketing opportunity. It will achieve TYPE-IN hits, but how, then, do you direct that traffic from a targeted advertising perspective? So, as a .COM, I'd say 600 would sell for $100K - $250K depending on the need and urgency of the buyer.
I'm saying this with only a gut estimate on the traffic that might be generated by both names at the .COM level.
(2) KEYWORD CONSUMABLES - GOODS AND SERVICES ARE PREMIUM
We all know this is the case... However, what factors might compound the premium nature of a domain name? Not every consumable is equal.
First, how close to the industry standard keyword is your consumable keyword. With "laptops" I'd say it's one of the top 5 keywords in it's industry: laptops, computers, computer, laptop, desktops, harddrives, monitors and so on... These names are the most likely to get blind type-in hits as they represent the most trusted and most obvious names within this CP (consumer product) field.
Jumping to the second level of that CP field, you'd start hitting 2 word phrases: Buylaptops, etc... Consumers will type in the industry standards before they start using 2 and 3 word phrases. It doesn't mean these aren't OUTSTANDING. It just means, one layer of premium peels away.
Second, how big is this specific consumable industry in terms of dollar volume? Computer sales = huge business. Massive. In terms of total units and $/unit. Any advantage or ability to achieve a meaningful positioning in the marketplace as a manufacturer or retailer could mean millions of dollars. $33,000 is a bargain to achieve this objective.
Third, how much money does this particular field spend in advertising revenue to reach it's end consumer. In terms of the computer world, it's a laugher... Gobs. Gobs. I'm not going to do the research right now, but I'd say that computer hardware sales represents one of the top-10 spends from a marketing/advertising standpoint.
Fourth, what percentage of sales is done online in this particular industry. Again, online sales of computer hardware and hardware accessories is very strong, representing big $'s and big unit volume.
Fifth, is this strong online consumer spend reflective of what is happening with pay/click advertising from manufacturers? For laptops, yes. Check out Overture.com... you'll see a nice $1.00+ per click for this keyword.
(3) DO THE MATH
So, now that you are armed with a little more knowledge on the DOT COM VS MOBI test and the CONSUMER PRODUCT PREMIUM test, how do you put this into an equation that might yield some level of benefit as a domain name speculator looking to harvest ultimate cashflow? Long sentence, huh?
Do the math...
A domain name is worth the following...
Branding Value +
(Type-In Hits/day * % Click Through * $ Click Through) *
3-12 Yearly Multiple based on industry and nature of name +
Speculative Value of that extensnion =
Domain name value
This is the Jeremy Padawer equation. Or, I'd like to call it that as I've been using it for the last 10 years. Shhh... don't tell anybody.... or tell everybody.
Let's focus on this equation for a second to determine value.
Branding Value is subjective to that particular buyer. If a company has invested a ton of money in a name (keyword or descriptive), that company could pay you a huge branding premium.
Type-In Hits is not subjective. It's a real number. For example purposes only, let's assume 50 type/in hits day.
% Click Through is measurable but dependent on how good your parking program or click through program is. In this case, let's assume a 10% click/through rate.
$ Click is measurable and changes depending on the program and the bidders. Let's assume a $1.50 click rate.
3-12 multiple is a number that is analogous to the fundamentals of any company's earnings. You have a lower multiple if there is some sort of time limitation to the traffic or you see a downward trend month to month. You get a higher multiple if you are in a fast growth industry, see traffic ramping up, etc... Many variables go into the multiple. It is measurable.
Speculative value of the extension is not measurable but obvious. You know as a domainer, that MOBI has a high speculative value. COM, ORG, NET do not have a high speculative value. Their value is based almost entirely on today's real fundamentals. MOBI doesn't have the level of awareness on the web surfing community, but does have a tremendous positioning statement, purpose and potential future use. A massive % of MOBI valuation is in this bucket for now. Almost NO, ZERO, ZIP speculative valuation falls into the COM, ORG or NET bucket.
So, let's do the math on the fictional domain name just based on the fundamentals and not based on branding value or speculative extension value.
50 hits day * 10% click through * $1.50 * 8 Years Multiple = $21,900
If you add branding value and speculative value of extension this $21,900 would travel northward.
So, this is all from me for today.
Sincerely,
Jeremy Padawer
"Dot Mobi King"
(c) Jeremy Padawer 2006
Laptops.mobi achieved a final bid of $33,000 in a furious fight to the finish, creating a buzz in the domainer community that almost set my cell phone on fire with text messages and voicemail. I was in the airport returning from a business trip. My phone buzzed so constantly with information that my left leg became numb.
$33,000! $33,000!
In the meantime, 600.mobi had a nice run and finished at $3,250. It's the first of my 191 MOBI portfolio that I decided to sacrifice. I sold it for informational purposes as much as for a little cash infusion. Afterall, I've spent as much money as the next guy (ok, maybe not Jean...!) on my MOBI e-realestate.
So... this begs the question...
"WHY IS LAPTOPS.MOBI WORTH A MULTIPLE OF 10X 600.MOBI IN AUCTIONS OF EQUAL AWARENESS TO THE DOMAINER COMMUNITY AND COMMUNITY AT LARGE?"
My opinion is that Laptops.mobi IS IN FACT worth a 10X multiple of 600.mobi, and that both Laptops.mobi and 600.mobi are reflective of very good deals in this budding MOBI marketplace.
(1) THE DOT COM COMPARISON:
Think of this in terms of DOT COM for a moment. Laptops.com undeveloped, in my opinion, is a $2-4MM name. Cameras.com just sold at auction for $1.5MM. Cameras has a lot in common with Laptops - both high dollar/unit electronic consumer product items, both high volume unit drivers worldwide, both from remarkably competitive industries with multibillion dollar companies driving the bulk of sales, and both with a strong percentage of purchases online.
600.MOBI is more like a 2 or 3 numeral .COM that achieves type-in traffic. It doesn't reach out to any particular industry as, for instance, 69 might hit adult targeted traffic (hehheh... bevis) or 800 might reach out to those seeking a toll free directory or so on. There isn't an obvious targeted marketing opportunity. It will achieve TYPE-IN hits, but how, then, do you direct that traffic from a targeted advertising perspective? So, as a .COM, I'd say 600 would sell for $100K - $250K depending on the need and urgency of the buyer.
I'm saying this with only a gut estimate on the traffic that might be generated by both names at the .COM level.
(2) KEYWORD CONSUMABLES - GOODS AND SERVICES ARE PREMIUM
We all know this is the case... However, what factors might compound the premium nature of a domain name? Not every consumable is equal.
First, how close to the industry standard keyword is your consumable keyword. With "laptops" I'd say it's one of the top 5 keywords in it's industry: laptops, computers, computer, laptop, desktops, harddrives, monitors and so on... These names are the most likely to get blind type-in hits as they represent the most trusted and most obvious names within this CP (consumer product) field.
Jumping to the second level of that CP field, you'd start hitting 2 word phrases: Buylaptops, etc... Consumers will type in the industry standards before they start using 2 and 3 word phrases. It doesn't mean these aren't OUTSTANDING. It just means, one layer of premium peels away.
Second, how big is this specific consumable industry in terms of dollar volume? Computer sales = huge business. Massive. In terms of total units and $/unit. Any advantage or ability to achieve a meaningful positioning in the marketplace as a manufacturer or retailer could mean millions of dollars. $33,000 is a bargain to achieve this objective.
Third, how much money does this particular field spend in advertising revenue to reach it's end consumer. In terms of the computer world, it's a laugher... Gobs. Gobs. I'm not going to do the research right now, but I'd say that computer hardware sales represents one of the top-10 spends from a marketing/advertising standpoint.
Fourth, what percentage of sales is done online in this particular industry. Again, online sales of computer hardware and hardware accessories is very strong, representing big $'s and big unit volume.
Fifth, is this strong online consumer spend reflective of what is happening with pay/click advertising from manufacturers? For laptops, yes. Check out Overture.com... you'll see a nice $1.00+ per click for this keyword.
(3) DO THE MATH
So, now that you are armed with a little more knowledge on the DOT COM VS MOBI test and the CONSUMER PRODUCT PREMIUM test, how do you put this into an equation that might yield some level of benefit as a domain name speculator looking to harvest ultimate cashflow? Long sentence, huh?
Do the math...
A domain name is worth the following...
Branding Value +
(Type-In Hits/day * % Click Through * $ Click Through) *
3-12 Yearly Multiple based on industry and nature of name +
Speculative Value of that extensnion =
Domain name value
This is the Jeremy Padawer equation. Or, I'd like to call it that as I've been using it for the last 10 years. Shhh... don't tell anybody.... or tell everybody.
Let's focus on this equation for a second to determine value.
Branding Value is subjective to that particular buyer. If a company has invested a ton of money in a name (keyword or descriptive), that company could pay you a huge branding premium.
Type-In Hits is not subjective. It's a real number. For example purposes only, let's assume 50 type/in hits day.
% Click Through is measurable but dependent on how good your parking program or click through program is. In this case, let's assume a 10% click/through rate.
$ Click is measurable and changes depending on the program and the bidders. Let's assume a $1.50 click rate.
3-12 multiple is a number that is analogous to the fundamentals of any company's earnings. You have a lower multiple if there is some sort of time limitation to the traffic or you see a downward trend month to month. You get a higher multiple if you are in a fast growth industry, see traffic ramping up, etc... Many variables go into the multiple. It is measurable.
Speculative value of the extension is not measurable but obvious. You know as a domainer, that MOBI has a high speculative value. COM, ORG, NET do not have a high speculative value. Their value is based almost entirely on today's real fundamentals. MOBI doesn't have the level of awareness on the web surfing community, but does have a tremendous positioning statement, purpose and potential future use. A massive % of MOBI valuation is in this bucket for now. Almost NO, ZERO, ZIP speculative valuation falls into the COM, ORG or NET bucket.
So, let's do the math on the fictional domain name just based on the fundamentals and not based on branding value or speculative extension value.
50 hits day * 10% click through * $1.50 * 8 Years Multiple = $21,900
If you add branding value and speculative value of extension this $21,900 would travel northward.
So, this is all from me for today.
Sincerely,
Jeremy Padawer
"Dot Mobi King"
(c) Jeremy Padawer 2006
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