Domain appraisal

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A Domain name appraisal is an estimate about the potential sales price of a particular Internet domain name. Domain names appraisal is highly speculative. It is an estimate and an opinion, and can considerably vary depending upon the considered elements of the name and its extension. Traffic to and revenue from a web is not relevant to a domain, but to the web content. It is a common mistake to take web traffic and revenue into calculation of a domain.

[edit] Considerations

It may be more conducive to treat an estimate as a price range where there is the best chances of a sale taking place at the maximum value for the seller. Valuation of domain names is done using several methods. Buyers and sellers often weigh the following considerations when evaluating a domain name:

  • The top-level domain extension — .com, .net,.org, .info, .asia, .mobi and so on. ".com" domains are usually the highest valued domain names.
  • The meaning of the domain name.
  • Suitability for commercialization.
  • Memorability.
  • How many words it is made up off. Anything above three words may be difficult to sell.
  • Number of searches performed for that word in the last month. Overture.com is often cited.
  • Length of the domain name may be taken into consideration. Especially long domain names may be tough to sell.
  • Brandability.
  • Whether it is pronounceable or not — the "phone test" .
  • The current position of the market related to that name.
  • Numbers in the name usually lower estimation (e.g., Loans24.com will not sell as much as Loans.com).
  • Hyphens do much to damage the value.
  • Typographical errors or misspellings greatly reduce the value, although typographical errors of very popular websites can still valued for mis-typed in traffic. For example Digg.com was less valuable than the dictionary word Dig.com, but now typos such as Diggg.com have value for the mistyped traffic.
  • The age of domain name — how long it has been registered is sometimes considered as an indicator of long or early demand for the name, but not for age itself.
  • Singular and plural domains may differ in their pricing (e.g.Loan.com or Loans.com)

[edit] Valuation

A domain (name, address) must be valued separately from the web (content, revenue) for which it is used. The highest prices have usually been paid for the revenue that was generated from the web at the domain's address (URL). The intrinsic value of a domain is the registration fee. There is no such a thing as a current market value for a domain; it just depends on what somebody is willing to pay.

The fair market value of a domain can be anything, beginning with the registration fee: The lowest known past selling price, the highest known past selling, price, the most recent selling price, or just any past selling price and any of these (or any sum resp. division etc.) is usually added to the current or expected revenue from the web content (advertising, sales, etc.). Domain (name + ext.) should not be mixed with Web (content + revenue).

Domain value estimation by appraisers are always the addition of what they would like that a domain is worth together with the effective/expected/desired revenue from the web content. Some people put value on the length of the SLD (name) and other people prefer description capability, but the shorter an SLD is, the less descriptive it can be. For example ComissionJunction.com is descriptive, but they use CJ.com for shortness. Also, if short is crucial, then the TLD (extension) should be short too. For example, a domain like LL.travel or LL.mobi might not be as good as travel.LL or mobi.LL.

This illustrates the relativity of domain value estimation. While the revenue af a web (content) can be easily counted and stated, the intrinsic value of a domain name such as unseemly.com or the shorter seemly.com is a matter of opinions and preferences. In the end, however, any sale depends of the estimates by the domain seller and the domain buyer. What other people think about the price does not affect the sales price.