1.7 Million Dollars – biggest domain sale this year! How do you Value a Domain?

2008 promises to be a great year for domainers. It’s only the second month of the year and we’ve had a domain sale for 1.7 million Dollars. In case you want to discount that as a one in a million shot the T.R.A.F.F.I.C silent domain auction that just closed sold roughly 270 domains for about $475,000.00. Although these figures were a little lower than October’s auction it still points to a strong and growing market.

The reason I brought up the 1.7 million dollar sale is not because of the size but because of some of the thought, evaluation, and reasons for its high valuation that you could use in your own search for domain gold. The name, DataRecovery.com was owned by Associated Computers and purchased by a competitor, ESS Data Recovery, whose website was e-s-s-data-recovery.

Why were they willing to pay this much for this name? Well this is a targeted, generic domain name that generates targeted direct traffic. The company use to spend $10,000-$12,000 per month on pay per click advertising. Even at todays conversion rate it was hard for them to get a good return. There are some in the domain world who are speculating that conversion rates will be lower in the future.

If you look at what it would take to be in postions 1-3 for the term “data recovery” you would need to pay $13.83-$20.74 per click which would result in a total cost of approximately $3,800-$7,200 per day! It just makes sense to be in the natural stream of people looking for “DataRecovery.” Its also a heck of a lot easier for their clients to remember than their old website name and a lot stronger platform to build brand recognition on.

So what does this mean for you and your profitable domain career? You can roughly divide the domainer world into two camps. Those who believe that the metrics like traffic, links, age, page rank determine the value of a domain. They feel domains names without these potentially revenue generatings statistics are worthless. The other half of the domain world believes that it is the short, catchy, keyword rich domain that is easily recognizable, has great branding potential, and great commerial potential that has value. They believe the “stats” guys are just chasing shadows.

And you know what? They are both right. There are advantages and dangers to each approach and I’ll go into that in my next post. But the great thing about it is that both groups are making money! The silent auction list of domain sales goes on for nine pages and it has example after example of domains that sold on the basis of their traffic and example after example of domains that sold and had no traffic or stats but had a great name that someone felt had great potential.

Make sure you signed up for your free account at Premiumdrops so you can start to get to know some of those statistics, what they mean, and how they help determine value.

You might want to also take a look at some of the current auctions to see what the various names are bringing. Make sure you read my post on auction tools if you are going to dip your toes in the auction waters so you have the best chance of winning at a great price. We don’t want you overbidding. To make going through the ebay auctions easier I actually put together hotdotauctions.com which features some of the best ebay auctions for myself. I applied some filters so it would only show me what I considered the best auctions so go to HotDotAuctions.com. However I’ll also have a sampling of ebay domain auctions immediately below this post.

All the best,
Ted Sudol
TheDomainHunter.com

bid on 5 Internet Marketing Domain names NR US $10.12 (7 Bids) End Date: Saturday Sep-04-2010 10:08:15 PDT Add to watch list

UQQL.com RARE 4 LETTER DOMAIN NAME WEBSITE LLLL 5 3 2 ! US $7.10 (4 Bids) End Date: Saturday Sep-04-2010 10:43:43 PDT Add to watch list

eMicrowaves.com DOMAIN NAME For Sale Store Web Aged NR US $10.50 (4 Bids) End Date: Saturday Sep-04-2010 11:05:03 PDT Add to watch list

DELL CARTRIDGE.COM PREMIUM DOMAIN NAME FOR SALE! US $11.49 (2 Bids) End Date: Saturday Sep-04-2010 11:13:03 PDT Add to watch list

FEEDBACKED.com premium one word domain name real estate US $5.50 (11 Bids) End Date: Saturday Sep-04-2010 12:01:46 PDT Add to watch list

Jeege.com DOMAIN NAME For Sale Short 4 5 Letter Web NR US $5.50 (3 Bids) End Date: Saturday Sep-04-2010 12:02:16 PDT Add to watch list

SXUJ.com Premium 4 Letter LLLL.com Domain Name llll US $3.75 (6 Bids) End Date: Saturday Sep-04-2010 13:10:16 PDT Add to watch list

MICHAEL JACKSON - 23 RARE DOMAIN NAMES- downloadmj.com US $9.00 (3 Bids) End Date: Saturday Sep-04-2010 13:24:40 PDT Add to watch list

DATING TIPS & TRICKS WEBSITE FOR SALE INCl. DOMAIN NAME US $12.99 (2 Bids) End Date: Saturday Sep-04-2010 16:31:22 PDT Add to watch list

LXVR.com - LLLL 4 Letter .com Domain Name, NR! US $6.50 (3 Bids) End Date: Saturday Sep-04-2010 17:07:43 PDT Add to watch list

REAL WEB HOSTING WEBSITE & .COM DOMAIN NAME FOR SALE !! US $17.50 (9 Bids) End Date: Saturday Sep-04-2010 17:26:42 PDT Add to watch list

The Pet Dog.com Premium Website DOMAIN NAME For Sale! US $20.00 (4 Bids) End Date: Saturday Sep-04-2010 19:51:25 PDT Add to watch list

RUMM.COM Domain Name for sale! 4 letter, LLLL!!!! US $54.25 (14 Bids) End Date: Sunday Sep-05-2010 5:52:23 PDT Add to watch list

UCQG.com - LLLL 4 Letter .com Domain Name, NR! US $3.30 (4 Bids) End Date: Sunday Sep-05-2010 8:32:03 PDT Add to watch list

27 Domain Name For Sale High Value Keyword Rich 0.99 NR US $5.50 (5 Bids) End Date: Sunday Sep-05-2010 11:25:18 PDT Add to watch list

NKUS.com 4-Letter LLLL com US Domain Name LLLL.com U.S. US $21.73 (12 Bids) End Date: Sunday Sep-05-2010 13:22:57 PDT Add to watch list

TOKP.com 4-Letter LLLL Toke Domain Name Tokyo LLLL.com US $7.63 (7 Bids) End Date: Sunday Sep-05-2010 13:24:51 PDT Add to watch list

SLGB.com 4-Letter LGB LLLL Domain Name LLLL.com QUAD US $8.50 (5 Bids) End Date: Sunday Sep-05-2010 13:26:56 PDT Add to watch list

Established 'MMA & UFC' Website & Domain Name For Sale US $5.00 (3 Bids) End Date: Sunday Sep-05-2010 19:15:09 PDT Add to watch list

Tokku.com RARE SHORT 5 LETTER CATCHY BRAND DOMAIN NAME US $16.71 (2 Bids) End Date: Sunday Sep-05-2010 19:30:16 PDT Add to watch list