Dotkeeper’s Tips #4: How to value a domain. Part 1.

Part 1. What are the important things to consider when you assess the value of a domain, and how can you get an idea of what sort of price is reasonable? How will the value of domains be affected by the introduction of the many new alternatives to .se and .com? That’s the topic of Dotkeeper’s Tips this week. Domains are, as we emphasised last week, hard-to-value assets. In summary, a domain is worth what a person or company at a specific time is prepared to pay for it. Of course, there are still many basic guidelines to keep in mind, and we’ll present them in this blog post. Do not, however, expect to find a simple formula. We’ll be presenting advice here from both a buyer and a seller’s perspective.

Because there is a lot to think about, here we’ve decided to divide these tips up into two parts. The next part will come next week. Enjoy!

Search volume of keywords on Google

Much of a domain’s value is tied to its popularity on search engines such as Google. Therefore, you should investigate how many searches are made for the keywords included in your domain. If you are interested in the domain name Dotkeeper.com, google the entire term ‘dotkeeper’ and see how many results come back. Usually the more results that appear, the more popular a search term is, and so the more interest there will be in building a domain around that keyword.

Earlier domain sales

There are websites that collect and present data relating to historic domain sales. Our favorite is www.dnprice.se. Here you can find out if a specific domain has been previously sold on the second-hand market.

Keep in mind, though, that only public sales of domains are listed here. Many sales are done anonymously between two parties, even if a broker is involved, so won’t appear on these kind of websites.

Similar trades

Are there other domains, similar to the one you’re interested in, that have recently changed ownership? It’s worth finding out the price at which they’ve been traded, so that you can understand the market a bit better. Again we recommend www.dnpric.es as well as www.domaintools.com.

Through Domaintools, you can also find out how many domains a specific person or company owns and – if you pay a subscription – you can also obtain a list of all the domains that they manage. In this way you can do a little deeper research on the party you may be about to open negotiations with. It can be useful to know if you’re dealing with a company or individual who buys and sells domains as a business. Visit the other sites the person owns to build up a idea.

With the website www.archive.org you can map out the front pages of different domains, to find out how they’ve been used. The homepage has snapshots from different time periods from a huge selection of different websites.

Are there similar domains for sale in the second-hand market?

The world’s biggest marketplace for already registered domains is www.sedo.com. There you can find a large number of domains advertised for sale. These can help you with your valuation. Other examples include www.flippa.com and www.afternic.com.

By surfing around these websites you can get a good picture of how others value domains. You can search for specific keywords to help you with this.

How much can the buyer pay?

If you are the owner of a domain that has attracted interest, you should try to find out the would-be buyer’s identity and plans for the domain. Surprisingly, many buyers are open about both aspects, which mostly benefits the selling party.

For example, icloud.com was understood to have been bought by Apple for US$4.5 million in 2011, from the Linköping based company Xcerion. Looking at the actions of both actors can shed a little light on what might have transpired here. In March of 2011, Xcerion registered the domain cloudme.com and began using it as their primary domain – up to this time they had been using icloud.com.  Just over a month later, icloud.com  became part of Apple’s portfolio.

NB: No figures have been confirmed by either party and it has been speculated that the sum was anywhere between US$4.5 and US$6 million. In any case, it’s notable that the Xcerion’s revenue shot up dramatically in 2011.

Traffic volume

Alexa.com. Analyse traffic!

Through Amazon’s Alexa.com service, you can quickly analyse the traffic on the domain you wish to value. If you don’t find any data for a domain on Alexa, this suggests that there is very little web traffic (less than 5 unique visitors per day). If you’re interested in buying a domain that’s part of a larger website, you should also access the data available from Google Analytics.

 Is this really a website…?

A developing trend among fleet-footed internet experts has been to search out good available domains that contain useful search words. Websites are then cobbled together and vaguely relevant content related to the domain name is posted. This is a method of driving up the SEO value for a domain (SEO value can be described simply as a domain’s popularity among search engines.)

We wrote more about this in last weeks blogpost, which you can find here (link in Swedish). If you want to measure the SEO value of a website, then we recommend that you take a look at an SEO tool that our friends at TopVisible provide: www.topvisible.se/seo-test (link in Swedish)

There you can quickly and without charge get a rating of different websites’ value according to Google’s algorithm.

The domain’s age

Just like wine, so it is with domains – they both improve with age. You can easily check a domain’s age through a search on whois. Look for the registration date. This is worthwhile because Google’s algorithm takes the age of a website into account when presenting search results.

Another reason for looking at a domain’s age is that if a domain is newly registered, then it implies that it is has been previously available without attracting any buyers. This is a very important factor to consider. If no-one has ever considered a particular domain worth registering, you might want to ask yourself why.

When Dotkeeper started up, dotkeeper.com was vacant and available for registration, although we could see on the www.domaintools.com website that it had been registered three times previously.

Fourth time lucky? Absolutely!

Hopefully this has made you a little wiser!

As we mentioned earlier we will continue with these tips next week.

Do you have questions about specific domains or do you want to have a personal consultation? Contact me directly at marcus@dotkeeper.com or call me at 0709- 708776.

Update:

Part 2 can be found here!