Rising domain valuations

[DomainEngineer]

Quote from DNJournal.com's this week's sales report:
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In an interesting illustration of how domain valuation has been rising, Dotcom Agency owner Ian Andrew told us that the domains they've sold over the past three months totaled 134 times the annual revenue those domains had been producing! Everyone thought Marchex set the benchmark when they paid about 8.5 times annual earnings for the Ultimate Search portfolio last year, but I'm sure domain owners would rather use Andrew's yardstick!
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Interesting !!!

 

[Theo]

Indeed - shows that the valuation model that is based on traffic revenue alone is inherently flawed. Keyword domains that can be developed can now sell for xxx times their monthly earnings.

 

[DomainEngineer]

Indeed - shows that the valuation model that is based on traffic revenue alone is inherently flawed. Keyword domains that can be developed can now sell for xxx times their monthly earnings.

I agree with you 100%. I have never sold a domain based on ppc earnings so far.

Thanks.

 

[stevo]

Today was a good day. I received two enquiries on two different names today and neither one has any substantial traffic. One has a decent offer awaiting my approval. Traffic is but one factor to determine value. Sometimes we can only guess at a potential buyer's motivation.

 

[gdurni]

the domain valuation model is quite similar to real estate

income properties sell for a capitalization rate, this is relative to the net income of the property and the multiple you are paying. Between the income and the speculation comes a price.

domains seem to have many of the same properties.
real estate has taxes, domains have yearly registration fees.
Many plays are purely speculative.

 

[gmac17]

these prices are getting crazier and crazier - telescopereviews.com - $4,000!!!???

 

[StockDoctor]

Quote from DNJournal.com's this week's sales report:
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In an interesting illustration of how domain valuation has been rising, Dotcom Agency owner Ian Andrew told us that the domains they've sold over the past three months totaled 134 times the annual revenue those domains had been producing! Everyone thought Marchex set the benchmark when they paid about 8.5 times annual earnings for the Ultimate Search portfolio last year, but I'm sure domain owners would rather use Andrew's yardstick!
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Interesting !!!

Heck, I've been getting over 134 times annual revenue on a bunch of my names earning around 5 cents. Wish it covered renewal costs.

I'm a buyer too. I'll buy any of your names for $1mill each if you let me set the terms.

 

[Edwin]

Agreed 100%. I've just sold a generic .co.uk keyphrase for approx. 300 times annual revenue in a high 4-figure deal, and as far as I am able to tell, the buyer seems very satisfied with their purchase because they have plans to benefit from the niche-defining genericness of that keyphrase.

 

[StockDoctor]

Agreed 100%. I've just sold a generic .co.uk keyphrase for approx. 300 times annual revenue in a high 4-figure deal, and as far as I am able to tell, the buyer seems very satisfied with their purchase because they have plans to benefit from the niche-defining genericness of that keyphrase.

Hey Edwin Where do you find these niche-defining genericness keyphrase domain buyers anyway? :clown:

 

[Edwin]

They come to me.

Incidentally, I left this out of the earlier post "In fact, current revenue wasn't even a factor in the negotiations."

 

[financialtraffic]

Indeed - shows that the valuation model that is based on traffic revenue alone is inherently flawed. Keyword domains that can be developed can now sell for xxx times their monthly earnings.

Right... Tell that to members here who often bid at 5-10 times the monthly revenue on some of the keyword domians I've offered.

I have had great luck selling to commercial domain buyers outside of this forum. I can't name them here, but they are some of the larger companies and they've paid up to 36 months revenue.

It strictly depends on whom you're selling to and why they are buying. You get lucky when a big company wants your domain for development purpose. But if they want it just for parking, you're still looking at low-ball bids, most of the time.

Everyone wants to buy for nothing and sell for everything. But sooner or later you'll run out of buyers if you charge those rates.