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

WJEO.COM - 4 Letter Domain Name LLLL.com LLLL 1, 2,3,4 US $41.00 (9 Bids) End Date: Thursday Aug-28-2008 4:02:55 PDT Bid now | Add to watch list

SiteWii .com Rare Letter Dot Domain Name 2,3,4,5 NR US $4.35 (10 Bids) End Date: Thursday Aug-28-2008 8:00:00 PDT Bid now | Add to watch list

Nimoz .Com Rare Letter Domain Name 2-3-4-5 NR US $15.50 (6 Bids) End Date: Thursday Aug-28-2008 8:04:00 PDT Bid now | Add to watch list

FindHandbag .com Rare Letter Dot Domain Name 2,3,4,5 NR US $35.00 (20 Bids) End Date: Thursday Aug-28-2008 8:30:00 PDT Bid now | Add to watch list

MrsErotica.com Rare Nifty Letter Domain Name 2,3,4,5 NR US $13.50 (8 Bids) End Date: Thursday Aug-28-2008 8:34:00 PDT Bid now | Add to watch list

NeedingCash .com Rare Letter Dot Domain Name 2,3,4,5 NR US $14.65 (9 Bids) End Date: Thursday Aug-28-2008 9:30:00 PDT Bid now | Add to watch list

DetectivesForum.com Rare Letter Domain Name 2,3,4,5 NR US $9.95 (2 Bids) End Date: Thursday Aug-28-2008 9:34:00 PDT Bid now | Add to watch list

HelpfulAdvise .com Rare Letter Domain Name 2,3,4,5 NR US $41.00 (8 Bids) End Date: Thursday Aug-28-2008 10:00:00 PDT Bid now | Add to watch list

Novod .com Rare Letter Dot Domain Name 2,3,4,5 NR US $14.50 (9 Bids) End Date: Thursday Aug-28-2008 10:30:00 PDT Bid now | Add to watch list

LOT of 20 Domain Names .com Worth HUNDREDS ***RESELL*** US $20.50 (3 Bids) End Date: Thursday Aug-28-2008 12:06:57 PDT Bid now | Add to watch list

PdaCommunity.com Rare Letter Dot Domain Name 2,3,4,5 NR US $8.60 (6 Bids) End Date: Thursday Aug-28-2008 12:30:00 PDT Bid now | Add to watch list

.MOBI Domain Name Portfolio US $21.50 (5 Bids) End Date: Thursday Aug-28-2008 13:29:03 PDT Bid now | Add to watch list

Fawee.com - Rare Bargain Letter Domain Name 2-3-4-5 NR US $12.51 (7 Bids) End Date: Thursday Aug-28-2008 14:45:00 PDT Bid now | Add to watch list

LaptopM .com Rare Letter Dot Domain Name 2,3,4,5 NR US $11.65 (6 Bids) End Date: Thursday Aug-28-2008 15:30:00 PDT Bid now | Add to watch list

iCalifornian.com Bargain Letter Domain Name 2-3-4-5 NR US $6.27 (2 Bids) End Date: Thursday Aug-28-2008 15:45:00 PDT Bid now | Add to watch list

Laggu .com Rare Letter Dot Domain Name 2,3,4,5 NR US $5.24 (2 Bids) End Date: Thursday Aug-28-2008 16:38:30 PDT Bid now | Add to watch list

LaptopPage .com Rare Letter Dot Domain Name 2,3,4,5 NR US $3.54 (10 Bids) End Date: Thursday Aug-28-2008 17:00:00 PDT Bid now | Add to watch list

MHZh.com 4-Letter TripPrem LLLL 4L Domain Name LLLL.com US $23.50 (3 Bids) End Date: Thursday Aug-28-2008 17:43:03 PDT Bid now | Add to watch list

Lezzu.com - Rare Bargain Letter Domain Name 2-3-4-5 NR US $3.74 (4 Bids) End Date: Thursday Aug-28-2008 17:45:00 PDT Bid now | Add to watch list

InternetCashCreator.com Website Domain Name + BONUS US $46.00 (8 Bids) End Date: Thursday Aug-28-2008 18:02:28 PDT Bid now | Add to watch list

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