Domain Valuation

Some domain names are valued in the thousands or millions of dollars by virtue of their uniqueness and rarity. However, the valuation of non-premium domain names should be approached with the same rigor as the valuation of a traditional business.

The valuation of a business in any industry starts with CURRENT earnings. Various risk factors and other intangibles may also be considered, and the final valuation will usually be some multiple of current earnings (EBITDA).

The multiple often varies from 1x - 10x earnings, depending on the industry. Of course there are rare exceptions where particular companies have created a dominant market position that cannot be easily challenged (e.g. Microsoft in the 90’s, Google in 2000’s).

Remember, in most cases an experienced buyer will only value actual results to-date. Granted, in many cases they're interested in the company (or domain) because they believe there is future potential to grow or improve the business, but they will NOT assign much value to “future potential” when negotiating.

I understand the potential of the domain business (which is why I’m in it), but it’s unreasonable to expect to be paid on speculation.

In fact, I argue that buying a domain or website based on even a 1x multiple of annual earnings is risky, because the traffic and monetization strategies are volatile and can change much faster than in the brick and mortar world.

Now you might say that using this type of valuation for an undeveloped domain name is like saying a piece of vacant land on the strip in Las Vegas is worth nothing simply because it is generating no income.

Well the problem is that we need to consider time.

I’ll bet that in 1930 there was vacant land on the strip in Las Vegas that they couldn’t give away. Only a few visionary “speculators” saw the value in this land in 1930. The average business person interested in hard numbers just laughed. Seventy (70) some years later and everyone can appreciate the value of property on the Las Vegas strip.

In 2008 we’re the speculators for domain real estate. If we’re inclined to sell today we need to understand the perspective and mindset of the typical buyers at this point in time. We can’t expect the vast majority of people to see the true value of domains for another 5 or 10 years. At that time the “real values” will be obvious and may far surpass traditional business valuation methods.

Unless of course substantial advances in search technology and structure of the internet render “domains” redundant.

Keyword Tool for Registering Great Domain Names

So far we've shown you some of the basics of domain investing at Domain Treasure Map. But, you also need some tools to help you succeed and make money in the domain name game.

Keyword tools help us select the right domain names by finding high traffic, high value keywords. This in turn leads us to the high income domain names that can generate great PPC revenue.

Before you register any domain name you should always perform a thorough keyword analysis. There are some free tools available, but in many cases the results are out of date, and you do not gain the in-depth information that's required to really excel in this business.

That's why we need a tool like WordZe. You can use WordZe to help you find profitable new domain names, as well as determine which expired domain names are worth registering. At one time or another I've used all of the free keyword tools, and I've also had accounts with the other paid keyword tools. But, honestly none of them can hold a candle to WordZe!

It costs a few dollars every month, but you'll make that money and more every time you register a high traffic domain name. Check out these short videos (Keyword Research Video, Dig Tool Video) made by WordZe staff to see how this tool can jumpstart your domain investing business.

Type-In Traffic According to Google

Have you noticed that the latest version of Google's Toolbar does not always take you to the address that you typed into the toolbar.

Under certain conditions the "Address Browse Bar by Name" feature in the Google Toolbar automatically takes you to a random, pre-determined site when you type in a specific url. It does not take you to the address you typed in.

For example, if you type "hockey.com" into the address bar, it takes you to www.nhl.com. You DON"T go to www.hockey.com! The problem is the average person at home won't even know what's happening and they may never get to your www.hockey.com site.

This happens under certain conditions when the user does not type in the preceding "www" AND either:

1.) Your title tag does not match your url

2.) Your site is not indexed (most parked pages)

This can present a problem for domain investors that rely on type-in traffic on parked pages.

Let's hear your opinions.

Coupons for GoDaddy Domain Renewals

Like everyone, I know costs can really add up when renewing domain names.

Well, I was just about to renew a few domain names the other day when I remembered that GoDaddy has some great coupons running for domain renewals. I thought I'd pass these coupon codes on to everyone at Domain Treasure Map.

Here are some of the best coupon deals right now:

BTPS4 - 10% off anything
OYH3 - $3 off or $6.95 .COM domain name
OYH2 - $5 off a $30 purchase
BTPS7 - 20% off any order of $50 or more

If you're going to buy or renew 4 or 5 domains, you could easily save $10. That's lunch for you or your partner! Just enter the coupon codes when you checkout.

GoDaddy coupons can also be used for their hosting and cash parking services. Then you'll really boost your savings, besides getting some of the best customer service in the business.

The coupon codes may not last for long, so if you have some domain renewals coming up you may as well take advantage of these FREE coupons now.

Domain SALE at Dotster - $0.99 .info

I was just informed that all ".info" domains are on SALE for only $0.99 until the end of January at Dotster. Make sure you use the coupon code "99infodot".

This is a great way for new domainers to register domain names for virtually nothing!

Also, when you have a great idea but the .com is already taken, registering the .info domain is a great way to protect your idea and secure your online identity.

FeedJit is Back!

FeedJit is back!

Still a bit of a mystery, but what great customer service from Mark Maunder - FeedJit's founder and CEO. Mark noticed my post (without any contact from me), and responded very quickly and professionally.

It's great when companies really care about their products, and are so responsive to their customers.

Thanks from all FeedJit fans Mark!

Where Has FeedJit Gone?

Where has FeedJit gone?

I use this widget to display a summary of the latest visitors to the Domain Treasure Map. You'll notice that the "Recent Visitors" feed on the left side of the blog isn't working today, and the FeedJit website also seems to be down.

Hopefully this is something temporary. FeedJit is a great widget that shows how global the world's communication has become.

Where to Register Your Domains

There are hundreds of domain registrars where you can register your domains on the internet. Most of them require you to sign up for a free account, and all accept payment by credit card, and in many cases PayPal.

Obviously pricing is an important component of selecting your preferred registrar. You may not think that $2 or $3 per domain name matters, but if you start registering tens or hundreds of domains it starts to add up, especially when you have to renew them every year.

Remember, good service and comprehensive website features are equally as important as the registration prices - assuming the prices are relatively competitive. And don't assume that the more expensive registrars provide the best service. My experience is that some of the registrars providing the most aggressive pricing for domains provide the best service - especially for people who focus on the non-premium domain names.

Some of the more popular registrars include GoDaddy, Moniker, 1 & 1, Network Solutions, NameCheap, Enom, Dotster. I've summarized the prices to register a domain for 1 year at each of these popular registrars. I don't know if it's just me, but most of them make it very difficult to determine their pricing and what is included in the base prices. I've also included my opinions regarding the advantages and disadvantages of each, which are based on my own biased experiences.

GoDaddy - $9.99 .com, $9.99 .net, $2.99 .info, $7.99 .us, and privacy $6.99/year. Advantages of GoDaddy include outstanding customer support, very strong management console, and inclusion of all necessary features (e.g. parking, forwarding, etc.) included for free with your domain registration. Also, if you "join" their discount club you can get .com domains for less than $7, and you can get FREE privacy for the first year when registering 5 or more domains. Go Daddy Bulk Domain Registration.

Moniker - $10.49 .com, $6.04 .net, $4.94 .info, $9.95 .us, and privacy $4.00/year. Advantages of Moniker include a stellar reputation for security from domain theft, and they allow the small domain buyer to participate in "domain tasting" which we will discuss in a later post. Disadvantages are the high prices, especially when everything is extra - like $6.00 for forwarding. They also tend to cater to the top end of the industry, including many of the "domain kings".

1 & 1 - $6.12 .com, $6.12 .net, $6.12 .info, $6.12 .us, and free privacy. This registrar is currently doing a lot of aggressive advertising for the cheapest registration fees. My conclusions are based on limited experience with this registrar, but their domain management panel is much weaker than some of the others.

Network Solutions - $9.00 .com, $9.00 .net, $9.00 .info, $9.00 .us, and privacy $9.00/year. Generally seem to cater to the high end of the market.

NameCheap - $9.29 .com, $9.29 .net, $5.88 .info, $8.88 .us, and privacy $2.88/year. Not much experience with this registrar.

Enom - $10.45 .com, $10.45 .net, $10.45 .info, $10.45 .us, and privacy $6.00/year. Again, they seem to cater to the high end of the market.

Dotster - $15.25 .com, $15.25 .net, $15.25 .info, $14.95 .us, and privacy $4.99/year. Expensive prices.

Personally, for the average person looking to register non-premium domain names I think GoDaddy is by far the best. Moniker may have some advantages if you ever get to play in the "big leagues", but GoDaddy definitely caters to everyone else. Their customer service is outstanding (trust me I used it a lot at the start), prices are the best when you consider all of the features that are included for FREE with every domain, their domain management panel is very powerful, and they are one of the biggest (if not the biggest) domain registrars in the world.




Note that the prices change quite often as this is a very competitive business. At the time of writing this article these prices are accurate for each of the recommended registrars, excluding special sales or volume discounts. Remember that these prices are just to register your domain. It will cost you approximately this much every year to renew the ownership of the domain (often there are discounts for multi-year registrations).

Some of the registrars let you park your website for free, forward the domain to another server, and even build a very basic 1 or 2 page website for free. But, if you want to build any kind of substantial website you will have to either purchase (rent) a hosting account, or set up your own web server.

Most of the bigger registrars that are mentioned also sell hosting services, and many of them also own and operate aftermarket domain auctions and marketplaces for reselling your domains.

Domain Treasure Map - HeadQuarters

Today I've done a fun post to give you a brief video tour of my home office - headquarters for the Domain Treasure Map blog.

This is in response to a blog post at Darren Rowse's ProBlogger where he posted a video of his new blogging office, and invited comments from his readers to show their offices as well.

This is my first public appearance and not the greatest video quality, but we all have to start somewhere - just like domaining! This shows what you can do with the tools available today - even if it's your first time making a video for the web.


Press > to play.

"Junk" Domains

I just want to remind everyone that at Domain Treasure Map our focus is NOT premium domains like those reviewed in a recent article at the Domain Tools blog. Although this is an informative and well written article, it really applies to the ultra premium domains that you and I will never own in the near future.

Sometimes I think that domainers are doing a disservice to the entire domain industry when they write only about the premium market. I think the way the domain industry will get more respect and ensure maximum value will be to get more and more average people involved - not just multi-millionaires and billion dollar investment companies.

So that is why we are focusing on non-premium domain names at the Domain Treasure Map. As you read other articles on the web, many "gurus" will say that it's better to buy a few great domains instead of hundreds of lousy names. I disagree. Their point is that a few great domains can make more money with simple PPC monetizing strategies than hundreds or thousands of lousy names that get very little traffic. This is true, although I haven't yet had the pleasure of owning one of these premium PPC domains (sigh). BUT, it is not logical to conclude from this thought that non-premium domains are worthless. In fact, with the right strategy non-premium names can be "built out" and become extremely profitable. This generally takes more work, but as the internet continues to become more competitive this is inevitable.

A good analogy is the person that snapped up the best property in a new town years ago usually got the most valuable property for the cheapest price. However, later investors who purchasd lower quality land and paid more money, made far more profit than the original land speculators - especially when they used smart strategies and built the most appropriate developments on each parcel of land.

My main point is that there is money to be made with each strategy. We are still in the infancy of the internet and domain real estate, but you have to step back and take a bigger look at the landscape. Even the extremely successful early "domain kings" (Rick Schwartz, Frank Schilling) are immersed in strategies appropriate for the premium domains they own. They probably do not care (or are not interested in the increased amount of work) to pay attention to the new layer of "junk" domain opportunity that is upon us all.

Cost to Register Domains

In this short post we'll review the costs to register a new domain name, as opposed to purchasing one from the resale market.

The only real cost is the registration fee, which will vary depending on which registrar (reseller) you choose to use, and the type of tld that you want to register. Currently, the cost is anywhere from $6 to $12 for most of the top level tld's (.com, .net, etc.), and some of the more common country code tld's.

The cost can increase significantly for some country code tld's, depending on the cost that has been set by the organization assigned to oversee that country's domain registration process. For example, to register European Union, China, German, New Zealand domain names can cost anywhere from $12 - $60. You need to look around a lot more carefully when choosing your registrar for foreign country code domains, because of the larger variation in cost and service.

Remember, many country code tld's have restrictions as to who can own them. For example, Canadian domains (.ca) can only be owned by Canadian individuals and corporations. Of course, depending on the requirements to create a Canadian "entity" or choose a delegate to represent you, there are usually ways around these restrictions.

Domains for the Rest of Us

Here are some domains that are currently for sale in the lower price ranges. These are the asking prices at an auction.

• miniauction.com $180
• everard.com $500
• dnxo.com $100
• the-casinos.com $450
• ekym.com $70
• hostingpoint.net $80
• jobpark.net $610
• golfforum.info $110
• scrapcar.info $300
• mylocal.us $70

Sometimes there seems to be no rhyme or reason to the pricing. In fact, there may be very little value to some of the lower priced domains for anyone other than the seller who is simply speculating and wants to get rid of a domain that produces little or no income.

Recent Domain Sales

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Domains 101

Alright, let's get to work.

A domain is a collection of english letters that describes a specific address on the internet. The average person tends to think of these letters or words as websites, but technically speaking, a domain name like "domaintreasuremap.com" represents the english version of a specific address on the internet - much like your street address describes the location of your property. There may or may not be an active website at this address - just like you may have bought vacant property before you built a house on the property.

A domain name includes two parts; the unique letters before the period, and the "tld" (top level domain) letters after the period. There are hundreds of tld's, the most common one being ".com". Tld's that are a distant second in popularity include ".net", ".org", ".info", ".biz", and ".name". In addition, there are all of the country code tld's (commonly referred to as "cctld"), one for each country in the world. For example, ".ca" is the cctld for Canada, ".in" for India, ".eu" for Europe, etc..

There is only 1 unique domain name for every piece of property on the internet. Additional domain names may be "forwarded" to the same piece of property if the owner desires, but we'll get to this topic later.

Due to the existence of so many different tld's, there can be a large number of unique domain names using the very same words before the period. In other words, "domaintreasuremap.com" is a different domain than "domaintreasuremap.info". Each one is registered separately, and can be owned by different people. This can present obvious problems, especially if this group of letters or words represents an existing business with a recognized brand.

As a domain investor you will need to consider which tld's you value higher when looking for specific domain names. In many cases, domain names with the most common tld's will be valued higher. In other cases, a particular domain name will be registered with a specific country code tld for example, but some of the more common tld's for that name may still be available.

The domain landscape is continually evolving, and there is considerable discussion about the value of the various tld's. In general terms, .com domains are currently valued at approximately 10x the value of .net and .org, and all other tld's are valued significantly lower still. However, there are exceptions, especially when dealing with cctld's.

The Fundamentals

We're going to start by reviewing some of the fundamentals that you need to understand if you're going to invest in domains.

There are far too many people on the internet preaching that you need to make some cash as fast as you can so that you gain a sense of success and don't quit. I disagree. Like anything worth doing, it's worth doing well. Learning to play a musical instrument, learning to play a new sport, whatever it is, you are going to be much further ahead if you master the fundamentals first.

Of course, this is usually more difficult than jumping straight to "the fun stuff" and never really understanding the reasoning behind your decisions. If you think back to some of your teachers the ones that you respect the most in hindsight probably were real task masters at the time. You know the ones that you would curse under your breath every time they made you run the same drill over and over. But voila, years later you can still play the game better than many of your buds because you mastered the fundamentals.

Don't worry, we're not going to make you run drills over and over. That's up to you how much you practice and put the knowledge we're going to teach you into action. But, we are going to take some time up front and lay out the fundamentals properly. So, if you start to wonder "where's the beef", hang in there and follow along with the knowledge that when we're done you're going to be way ahead of 95% of the so-called domainers in the game today.

Domain Treasure Map

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