Type-In Traffic vs. $xxx,xxx sales

[CLB]

Quick question about a common scenario:

*dictionarykeyword*.com sells for six or even seven figures

But Overture (R.I.P.) confirms that type-in for the domain is in the hundreds per month.

How could such a domain (parked without development) be monetized so successfully as to pay for itself if the sales price is so high? :?:

Thanks.

 

[Devil Dog]

There's more to it than just 'parking revenue'.

Say for instance, you owned blue.com which on a good day, rcvd, 5 hits making a whopping $1.00 per day avg.

Would you sell based on revenue factors alone? I think not.

My opinions.

Oh yeah, you say Overture(RIP)?

 

[Bill Roy]

CLB, this is a quandry that puzzles many, and it extends far further than this into other gTLD's and ccTLD's.

 

[hugegrowth]

How could such a domain (parked without development) be monetized so successfully as to pay for itself if the sales price is so high?

In the example you gave it can't, if it's just parked.

It would usually just be parked while plans are made to develop it, or until it is resold.

Or, the buyer is very rich and just wants to own that name.

I just used Overture this morning to check some terms, the Feb results are out now.

 

[CLB]

So a person or company will spend nearly a million dollars to either just own it or HOPEFULLY sell it for more.

If so, then that seems like pure gambling.

I'm sure there is more to it.

I can see if it's a major corporation that will develop it but its the "Domain King" and his ilk that would buy a .mobi for well over six figures I'm trying to figure out.

I assume the mega-domainers just know things little people like me just don't.

 

[Devil Dog]

I can see if it's a major corporation that will develop it but its the "Domain King" and his ilk that would buy a .mobi for well over six figures I'm trying to figure out.

It wouldn't surprise me one bit if that was nothing but a 'hype' builder for the extension.

 

[Beachie]

You can't base the value of a strong generic domain purely on PPC income. Firstly, PPC is only a percentage of what advertisers actually pay for the traffic we send once Google/YPN and the parking companies take their slice. You can't really say a domain sold for X times revenue, when revenue is a slice of a slice of what it's really worth. If you own a good generic domain that's just parked, it's like owning an acre of land in central Manhattan and growing potatoes on it. That's not to say you can't make money (it works for me), but you'll make a lot more money if you ultimately develop the land. Type in traffic will give you a good foundation to build a site, and building a good site will bring yet more traffic.

Secondly, some of the big players, especially the ones who got in early, are now sitting on five and six-figure incomes per day. Now it's just a game of Monopoly to see who can own all the hotels. For some of them it's no big deal to lay down six-figures for a .mobi, just because it's worth diversifying their portfolio a little. It's not like they're mortgaging their homes to do it.

People like to think there's some incredible conspiracy going on - it's the same with snap and pool auctions - but they just can't accept that there are people out there with serious cash.

I remember threads saying there was some conspiracy when BuyDomains were winning Snap auctions with high bids. Do a quick sum on DNJournal and you'll see that BD sold almost $800,000 worth of domains last week. That doesn't include the PPC they earn on their 400,000+ domain portfolio. Suddenly it doesn't seem incredible that they can spend $100,000 per day at SnapNames...

 

[hugegrowth]

People like to think there's some incredible conspiracy going on - it's the same with snap and pool auctions - but they just can't accept that there are people out there with serious cash.

If you keep track of the business new, you'll see private equity firms buying out public companies almost on a weekly basis now, and these are multi-billion dollar deals. Cash is cheap these days in the business world (profits are high and interest rates are low) and lots of consolidation is going on. Same with the domain industry, and I think your comment sums it up well. There are entities out there with very deep pockets looking to acquire quality assets in all industries.

 

[CLB]

Secondly, some of the big players, especially the ones who got in early, are now sitting on five and six-figure incomes per day.

From developed, indexed domains or from PPC?

That was sort of my original question, in so many words.

 

[Beachie]

From developed, indexed domains or from PPC?

That was sort of my original question, in so many words.

Yes, PPC only.

 

[CLB]

O.K. Thanks.

Just trying to learn here but regarding my original question:

*dictionarykeyword*.com sells for six or even seven figures

But Overture (R.I.P.) confirms that type-in for the domain is in the hundreds per month.

How could such a domain (parked without development) be monetized so successfully as to pay for itself if the sales price is so high?

I guess I just don't understand how hundreds of type-ins per month to PPC translates into, say, $800,000 in a year or two.

I can see maybe if the domain is turned into an affiliate landing page with a PPA of $15 or something along those lines.

 

[Beachie]

I guess I just don't understand how hundreds of type-ins per month to PPC translates into, say, $800,000 in a year or two.

It doesn't necessarily. Because there's a shortage of good generic domains these days, prices are high, so return on investment might be 8, 10 or more years. I guess the point of my previous post is that some big buyers are no longer interested in a direct return on their investment. They're just buying because a) they have lots of cash. b) they figure that premium domains are only going to become scarcer, and thus more valuable, so get them while you can at 'any' price.

Think of it this way; the average English-speaking person's vocabulary is between 10,000 and 20,000 words. In reality, we only use around 2,000 to 3,000 of those words in common speech, but let's say there are 10,000 words commonly in use. That would include good business keywords like "computer", "forum", "games" and "sales", but it also includes less desirable words like "feces", "lightly" and "saddening". There are appproximately 1 billion Internet users, so when you look at it that way, only one in 100,000 users can own a one-word .com, and considering that a large number of those domains are already held by companies like Anything.com, IREIT etc, it's extremely difficult to acquire them.

 

[GAMEFINEST]

It doesn't necessarily. Because there's a shortage of good generic domains these days, prices are high, so return on investment might be 8, 10 or more years. I guess the point of my previous post is that some big buyers are no longer interested in a direct return on their investment. They're just buying because a) they have lots of cash. b) they figure that premium domains are only going to become scarcer, and thus more valuable, so get them while you can at 'any' price.

Think of it this way; the average English-speaking person's vocabulary is between 10,000 and 20,000 words. In reality, we only use around 2,000 to 3,000 of those words in common speech, but let's say there are 10,000 words commonly in use. That would include good business keywords like "computer", "forum", "games" and "sales", but it also includes less desirable words like "feces", "lightly" and "saddening". There are appproximately 1 billion Internet users, so when you look at it that way, only one in 100,000 users can own a one-word .com, and considering that a large number of those domains are already held by companies like Anything.com, IREIT etc, it's extremely difficult to acquire them.

very nice info

 

[CLB]

Beachie - Thanks for your patience and clear information. k:

I think I'm starting to get it!! :yes:

 

[SeanIM]

Naturally spoken phrases that are 2-3 words long are gold imo, regardless of OVT currently or any other measuring stick.