What's a Domain Name Really Worth?

I'm often asked by people who own, or want to own, a domain name to give my opinion on what the "fair market value" of a particular domain name is.

I usually begin my reply by mentioning that the vast majority of domain names sold on the re-sale market go for less than $1,000. This is greeted by sighs of relief from the folks who want to buy a domain name, and gasps of incredulity from the folks who own a domain name: "Well, my domain name is worth much more than that..."

I then outline some (but not all) of the criteria that, in my opinion, make a domain name more valuable than others:

• .com extension (versus .net, .org, .ca)
• seven-letters or less
• no hyphen(s)
• easy to read in all lowercase
• easy to say and hear (passes the radio test)
• easy to type
• consists of word(s) found in the dictionary

While these criteria are helpful in order to gain a rough idea of what a domain name might be worth, I always caution people to take this with a grain of salt.

Why?

Quite frankly, there's really only one accurate way to determine the "fair market value" of a domain name: a domain name is worth whatever the buyer is willing to pay for it. Period.

I've seen "$10,000" domain names trade hands for $1,000, and I've seen "$1,000" domain names trade hands for $10,000. In my experience, when it comes to domain names, beauty (and value) really is in the eye of the beholder.

Comments

[Don Lange]

Great points Bill. One interesting sidebar - companies who have "made do" with perhaps second best domain names until their primary choice becomes available have built up search engine ranking value that they would lose if they suddenly changed URLs! Gives one pause...Another quick note, sorry I missed your speech at the CMA this week but I heard on several fronts that it was great.

[adverlicious]

As the owner/user of a quirky name, I can attest that "fun" domain names sometimes have value -- if they're memorable or somehow distinctive --

http://adverlicio.us

(Admittedly, it's unclear if the name would have value beyond my online advertising industry niche.)

Also, you'll want to consider a domain's age, Google Pagerank score, inbound links, DMOZ listing, and type-in traffic in your purchase price equation. They all have value and are worth paying for.