What is a domain name worth?
November 2nd, 2008
How do you know what a domain name is actually worth? If you want to buy it, how do you know whether you’re paying too much for it? Tonight just for grins and giggles, I decided to see who owned Aldebaran.com – it redirected to another website, which meant to me that it wasn’t being used – so I figured I’d contact the owner and see if they wanted to sell it.
You can find out who owns a domain by using a domain name lookup tool. I looked up Aldebaran.com and emailed the owner who was listed. I simply asked if he was interested in selling the domain.
To my utter astonishment, he said he’d sell it for $50,000, that’s fifty-thousand dollars! Or he’d generously lease it to me for $400/month. I don’t know what the point of leasing a domain name would be – what a search engine optimization nightmare. But let’s get back to his price tag of $50,000: How do you know what a domain name is worth?
There are many free domain name appraisal tools out there on the web. One such tool is SwiftAppraisal.com. It said Aldebaran.com was worth under $100. It’s interesting to use one of these free tools to see what questions they ask to determine the worth. Things like number of words (fewer is better), whether the domain name is associated with the business/product, whether it was easy to spell/remember. Aldebaran.com failed all of these tests. So why would this fellow ask $50,000 for a worthless domain?
What is “Aldebaran” anyway? It’s a star; the brightest star in the constellation of Taurus. It has nothing to do with web design, or any other business for that matter. You can’t sell a star. 🙂
Needless to say, I turned down this ridiculous offer.
But what if I had somehow trademarked “Aldebaran”. Then I would call a trademark attorney and see if this guy was guilty of cybersquatting. I don’t know if I trademarked “Aldebaran Web Design” if that would be good enough, but it’s something to keep in mind.
In general, to avoid all of these headaches – I advise my clients, whenever possible, to get domain names directly from registrars that are available. You can use domain name checking tools to see if a particular domain name is available. If it’s available, it’s only $10 per year. What a bargin!
Jill--------------
J. Olkoski
Aldebaran Web Design, Seattle
Jill Olkoski has a BS in Engineering, a BS in Computer Science and an MA in Clinical Psychology. She delights in using her advanced technical and psychological skills to help small business owners develop cost-effective and successful websites.
November 12th, 2008 at 10:04 pm
Apparently, Jill, although you proclaim to have spent 17 years at Motorola, you were only 12 years late at registering AldebaranWebDesign.com – the guy registered Aldebaran.com in 1995. A single worder generic .com, versus a 3-worder niche-specific. Why do you gawk at the $50k price? Go to http://dnjournal.com/domainsales.htm and educate yourself about the value and pricing of domains. E.g. Banners.com just sold for $365,000. And stop using lame tools like swiftappraisal. They are junk 🙂 PS I came here looking for the spammers behind some Dutch IP.
November 12th, 2008 at 10:08 pm
I’m not “proclaiming” anything…I started working for Motorola in 1987…what does that have to do with a domain name price? I know he registered it in 1995, but there’s no content there, it has a page rank of zero….ZERO…meaning it’s worthless as far as search engines go. Banner.com at least has a PR of 4, which isn’t super stellar, but way better than zero. I don’t think comparing something you can’t sell or spell easily (aldebaran) to something you can sell or spell (banner) isn’t quite fair. I know that one word domains are worth more than three word domains — in general – unless that one word is so odd and obtuse. And if $50K is such a deal, why has no one bought it from him yet? Has he been waiting for 13 years to sell this domain name he bought so long ago? Oh, and a suggestion: maybe you should use a real email address when you leave a comment, gives you a bit more credibility versus making up a silly one 🙂
November 12th, 2008 at 11:23 pm
Well, for starters I am glad you approved my post and responded. Anonymity is not a bad thing, as long as a conversation is fruitful, don’t you think? 🙂
I feel as if I ticked you off a bit so please let me elaborate. First off, in my example of Banners.com (not Banner.com) I indicated that a sale of $365k for a generic name represents a class of domains: those that are aged, dictionary .com’s. I have no problem spelling or pronouncing Aldebaran, even though I cannot point to it in the sky 🙂
Having worked for a great company such as Motorola, for 17 years, starting in 1987 put you at a great advantage – in my opinion – to have access to technology trends in 1995. Perhaps Aldebaran was not on your mind 12 years ago, but apparently it was on someone else’s who registered it.
Feeling shocked about his asking price shows that you maintain the mindset of an SEO/developer; if you view it from a marketing perspective perhaps you’d be a bit more lenient towards the $50,000 price tag. Many domains have sold for far more and of course others for a lot less. An asking price is justified not only by current SE placement, but by other factors, which I could analyze further if you’re interested.
On the subject of why he hasn’t sold it so far: he’s using it to display whatever oddball content; and yet he’s only 4 places below you in Google when searching for “Aldebaran” 🙂 The renewal fee of domains is so low that one can hold onto pretty much any domain indefinitely, monetizing it, developing it or waiting for the right moment in order to sell it.
November 13th, 2008 at 10:15 am
The mindset of an SEO person is much more akin to that of a marketing person….a developer, many developers, view websites as works of art – and never think about the return on investment. They don’t care about traffic, they don’t care about getting new clients for the small business owner. You seem to be arguing that I’m ignorant of marketing or being capable of assessing whether purchasing Aldebaran.com would be a good business decision. Purchasing a domain, like any other business investment, must be done with the perspective of the business owner and their business model in mind. Since I’m not selling “Aldebaran”, but rather “Web Design”, why would anyone search for “Aldebaran” to look for my business? It’s unrelated. Therefore from my business perspective, this domain name is vastly overpriced. It’s relative and subjective, not absolute. Just like the current housing crisis – what something is worth is only as much as someone’s willing to pay. Therefore, from my own business perspective, the price is ridiculous. Maybe in the future if some creatures from Aldebaran’s star system invade the Earth, they’ll want to buy the domain for $50,000, or whatever currency they’ll trade in. But for my business, it would be a poor purchase – yielding no increase in traffic for my services, which, for a small business owner is the only factor. I don’t work with folks who purchase domain names in the hopes of their going up – that’s not who I’m talking about, and who my clients are – no further analysis please.
July 16th, 2009 at 11:45 am
Hi, what happens when you do purchase a domain from the registrar on a specific date but then after that date of purchase someone decides to trademark that name you bought because they like it. Question:
1. Can they trademark this name after you just registered it?
2. If so that would mean that if someone has a great idea for a domain name and registers it, someone can then come behind them and practically steal the name because they trademarked the name. Does not sound fair or legal to me.
Your thoughts. Thanks
July 16th, 2009 at 11:49 am
Hi Sharkvador,
This is a good question, and since I’m not a trademark attorney, I don’t know the answer. The best I can do is refer you to another article I wrote that was titled “Should I trademark my domain name” and the answer was provided by one of my clients, who is a trademark attorney. It doesn’t address your specific situation, but hopefully will help.