Some thoughts on traffic sales

[acronym007]

Listen all you sellers. Do what you will, it's your domain but take heed. Those offering you 18 months - 24 months or whatever are short changing you. Your domains are most likely worth more. A domain name has value outside of the income it produces in traffic. A name can produce 1 unique hit daily and be worth more than 960 months. Don't sell yourself short because someone tells you your domain is only worth 24 months traffic....I say NO, NO, NO, my domains are worth more than that. If you need to sell, sell, but just be aware that buyers are taking profit day one if they buy your name for any amount of months without taking the name itself into consideration. So, the formula should look like this, not exclusive of one another.

Correct formula
Domain value = domain name (inherent name value) +/- traffic value

Below is how allot of buyers want you to think and IT'S DEAD WRONG! There is nothing wrong with a buyer offering it, it's the formula itself that is dead wrong.

Incorrect formula
Domain value = ONLY TRAFFIC

With the above method aren't you leaving some profit on the table? Go to Sedo/Afternic and watch the daily sales, I would guess 7-9 out of 10 sales daily are name sale only, sales based only on the names' values with very little or no traffic. So, maybe the opposite is true? I watched mydogspace.com for $28k. Do you think that is 24 months traffic? How about today's sale of missrussia.com for $50k, think that's 24 months with no ovt? What's the point of this post? It's a seller beware post, a hopefully potentially profit saving post, an informational post.

Buyers, buy for whatever price you can get and I congratulate you if you can get a name for traffic only.

Sellers, unless you have to sell for financial reasons consider the whole value of your name not just the traffic alone regardless of how many months are offered.

No, this is not all just my opinion but many facts based on industry history. I am not in favor in one party over the other as I am both a buyer and a seller. There are many facts that overweight the traffic alone purchase formula. That's why IREIT and MARCHEX and others will gladly pay for traffic alone. Some of what express in this thread is opinion but it's worth noting sellers should do their homework before a sale and be wise not to leave profit on the table.

Now, off you go, have an awesome Saturday with your families and get off the computer.... LOL. Cheers

Acro

 

[Keynes]

Domain value = domain name (inherent name value) +/- traffic value

a more precise formula would be:
EV(Domains) = [P(sale|year)*E(sale price) + E(PPC earnings)] * Yearly multiple

 

[DNjet]

I would venture to say the 18-24 month offers are on names with possible typo/tm issues.

 

[Provider]

Guys, I agree with both of you. I think there is a difference to buy a business that leases the location and to buy a business with location.

I can go right now and buy a store that generates 5000$ a month for the owner after taxes. That will cost me 36 months x 5000$.

If this store owns the location I will have to pay 36 months x 5000$ +
property price. I live in Vancouver and the prices here for any small size store
can be around half a million dollars. I would like to purchase this store for less, but nobody will sell it to me. I would be seen by others like stupid person if I won't consider the price of the property during the transaction.

So, if somebody ignores your domain name value, we all know btw that domains are in fact online properties, you should not deal with them.
There are many stupid people like that on site point dot com forum btw.

Also guys we have to take into consideration that companies like IRET and Marchex are the biggest companies in our industry. That means they are the ones who is creating a rules of engagement. This myth that domain name value depends a lot on traffic purposly created by them to lower the price of your domain name. Why? Well, they own thousands of names and you don;t have to be a scientist to understand that when you own that many names you can't develop all of them. So, what they can do with them? They are creating these nets to lure the visitor on their sites to make them think that info in there is useful. The smart word for this is "domain name monetazation throught parking". Most of us park our undeveloped names somewhere, but reality is that all this traffic considered to be a junk of the Internet, because
it doesn't contain any useful content for the user. And if you don't agree with me ask few Internet surefers you know and they will tell you much they hate all these parked pages and landing pages. My point is that for these companies our names are just traffic, they don't place a lot of value on the value of the domain name itself. Even if you send them your list for sale the only thing they are interested in are the traffic and revenue stats .

 

[Provider]

Also guys we have to take into consideration that companies like IRET and Marchex are the biggest companies in our industry. That means they are the ones who is creating the rules of engagement. This myth that domain name value depends in some great part on traffic purposely created by them to lower the price of your domain name. Why? Well, they own thousands of names and you don’t have to be a scientist to understand that when you own that many names you can't develop all of them. So, what they can do with them? They are creating these nets to lure the visitor on their sites to make them think that info in there is useful. The smart word for this is "domain name monetization through parking". Most of us park our undeveloped names somewhere, but reality is that all this traffic considered to be a junk of the Internet, because
it doesn't contain any useful content for the user. And if you don't agree with me ask few Internet surfers you know and they will tell you much they hate all these parked pages and landing pages. My point is that for these companies our names are just traffic, they don't place a lot of value on the value of the domain name itself. Even if you send them your list for sale the only thing they are interested in are the traffic and revenue stats .

 

[hugegrowth]

I agree with much of what you say. When you look at the weekly sales you can see tons of domains selling for 2-10k that wouldn't sell here for $25 - so they are most likely selling for the perceived value of the name itself, or branding value, and not the traffic it generates. I am more hesitant now to sell my traffic names, because there are so many people looking for traffic names you have to wonder WHY? I think it's because they will only increase in traffic and value over time. Even if traffic stays the same, click rates will probably increase over time anyway, making the traffic more valuable. A lot of consolidation is happening right now, and there ain't many cheap traffic names out there anymore - and the chances of regging a traffic name these days is very low, though not impossible.

 

[Digital Address]

When you look at the weekly sales you can see tons of domains selling for 2-10k that wouldn't sell here for $25 - so they are most likely selling for the perceived value of the name itself, or branding value, and not the traffic it generates.

Absolutely correct.

I am more hesitant now to sell my traffic names, because there are so many people looking for traffic names you have to wonder WHY? I think it's because they will only increase in traffic and value over time. Even if traffic stays the same, click rates will probably increase over time anyway, making the traffic more valuable.

Maybe. In fact, it may turn out to be that the more sites that are out there, the less "siteseers" per site there will be.

 

[Devil Dog]

I agree 100% with op.

As someone else eloquently put it a few months back, those type of folks are called "Revenue Clowns".

 

[DomainFatigue]

Sometimes the traffic comes after the brand.

My [removed] for example had virtually no traffic when I sold it for nice bucks back in '03 or '04 for its brand value. The small cosmetic company that bought it marketed a product about the same time and it now gets pretty good traffic last time I looked... And I sold it for almost 20X what it was once listed for on eBay.

I for one still believe in the potental of a brand domain although the market has been tougher as of late...

 

[Duckinla]

Sometimes the traffic comes after the brand.

lol. I would think so.

 

[DomainFatigue]

lol. I would think so.

I should have been more specific for the common folks :lol:

Lots of domains are sold for their brand value, developed, and still don't get decent traffic.

 

[Focus]

I am paying 18 months rev for traffic if anyone is selling, it's called "A Good Deal" for the buyer...sometimes people just want to cash out and take the one lump sum, kind of like lottery winnings...take more over a long period of time or more cash RIGHT NOW. There's nothing wrong with this approach if you can re-invest that "right now" money into even bigger profits.

 

[Duckinla]

I'll take a different point of view for discussion sake:

I doubt many people are selling the rare "brandable Generic traffic" domain for 18 months revenue. Most traffic domains are either mispellings, typos or TM's and therefor have no domain value.

Point #2: In a transaction the seller is left with cash and no risk. The buyer takes all the risk of the traffic going away for one reason or another, or of the opportunity not working out.

Point #3: Never confuse what someone else can do with an opportunity with what you can do with it. If California were still a part of Mexico people would be trying to imigrate from it rather than to it. There should be a middle ground somewhere above your value and below theirs. That's where you should find your selling price. If you push to far they may just look for another opportunity.