I could use a little help here. I'd like to invest in .coms with some traffic. I'd like to know if there's a "standard" multiple (X times current monthly or yearly parking revenue) that buyers use? Also, what are some of the variables to consider?
http://chrischena.blogspot.com/2005/12/por-qu-pagar-tanto-por-ese-puntocom.html
I'll summarize a few of his main points:
-The traffic which a generic domain receives can be worth a lot more than the PPC income provided by a parking company. SEDO may pay pennies per click for a real estate domain but if a real estate broker purchases the domain each sale resulting from that traffic could be worth thousands of dollars. The potential profit value of what can be sold using a domain's natural traffic influences the value of the domain?
-Type-in traffic also reduces a cost which many ecommerce companies face online advertising via a program such as Google adwords where each click results in an ongoing cost which may not necessarily generate a sale. The one-time acquisition of a domain's natural type-in traffic becomes free advertising going forward.
-Conversion rates for type-in traffic may be better for a generic domain than traffic acquired via a PPC campaign. Ancillary services can be offered to the site visitor which augment the value of this natural traffic.
-Ranking algorithms favor sites which include the keyword.
-An easily remembered domain with appropriate content can generate word-of-mouth advertising (viral marketing).
