By Michael Collins, VP Marketing Afternic
Domain parking revenue is an important measure of a generic domain name’s worth, but why? When faced with other attributes of subjective value that are difficult to measure, it is natural to give considerable weight to revenue. Revenue can be measured and comparisons can be made for revenue to sale price of other domains. Appraisers love to have comparables. There are problems with a valuation model that does not also consider other more difficult to measure attributes.
Many domains with little or no parking revenue have terrific branding potential. I love Clear.com. The positive and clear meaning of clear.com (pun intended) makes this name one that is desirable for many products or services. It has great potential for branding use. Expecting to arrive at a value for this name primarily based upon parking revenue would be a mistake. The trouble with brand potential is that domain owners often over estimate the value. They see brands become popular even though they do not have the natural potential of a name like Clear.com.
In spite of starting with names like youtube.com, facebook.com and even ebay.com, the websites have become very popular. These brands are huge, but what were the domains worth before the brands were developed? Not as much as Clear.com, I am sure. These names had no intrinsic value before the brands were developed. They were not worth much more than the cost of registration. This is where some domainers are misled to believe that names of little value will sell for tens or hundreds of thousands of dollars. They think that their name could become the next facebook. Sure, it could but how much does someone who is trying to build the next new thing need your name? There are millions of other word combinations that one might use, many can still be registered.
Afternic.com was another name that had only a little intrinsic value before it was developed. At one time Internic was the place to register domain names. You could register domains at Internic and Afternic became the aftermarket place to exchange registered domains. The play on the Internic and Afternic names gave Afternic a little value before development, but not much. When the previous business using Afternic.com closed and we had a chance to buy Afternic.com (with service mark), we were getting an established brand. We had to consider that developed value when making our buying decision. Again, don’t confuse brand value with brand potential.
When trying to determine brand potential value for your own domains, consult with someone who will give you an honest opinion. Sometimes your friends are not your best consultants. Pretend that you are the buyer and look for alternatives. If you can find suitable alternatives that are much cheaper or still available to register, maybe you are over valuing the potential of your own name. On the other hand maybe you own a name like Clear.com.
In summary, be sure to consider brand value or brand potential when valuing names you own or desire to purchase, but owners be careful to not over value potential. In my next article, I will talk about using domain sales as a factor in valuing a domain portfolio. Many portfolio buyers today want to only consider parking revenue multiples.
Themed Promotions
This month we have featured names from many members. I hope that even more members will participate next month. Submit your name(s) for next month’s holiday promotion now. Remember December’s promotion will focus on winter sports and recreation.
November – Holiday
December – Winter Sports/Recreation
Personal Finance
These names are discounted 15% until the end of the month. The full price is shown, but purchases completed before October 31, will be at the discounted price. Some of the names are listed below. The complete list is available here:
http://www.afternic.com/promo.php
Featured Domains
RetirementFunds.net $8,160
Finance-Personal.com $6,120
ManagePersonalFinances.com $3,814.80
SellInvestments.com $3,315
PersonalFinancialStrategies.com $3,304.80
Personal-Budgets.com $3,145
PersonalBudget.org $3,060
Consumer-Banking.com $2,975
FinanceAutomobiles.com $2,964.80
GetFinancingNow.com $2,964.80
FlexibleFinance.net $2,879.80
HighYieldInvestments.net $2,879.80
InvestmentTools.net $2,879.80
LongtermFinancing.net $2,879.80
Chances to meet us:
October 24-28
TRAFFIC East
Hollywood, Florida
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