Domian/website values

[paul]

Saw this article
http://www.business2.com/b2/web/articles/print/0,17925,1132510,00.html and found it interesting. Especially so where it says " Marchex paid the equivalent of 8.6 times annual earnings..."

The going rate on digitalpoint seems to be 10-12 times MONTHLY net. So if you can buy at 1 times annual earnings and sell at 8 times there should be a few $ to be made :)

Now, these were type-in domains with proven income production, but it makes me think prices in general will rise.

[Chris]

Today, Schwartz owns about 5,000 names, with less than a third falling into the “adult” category. He’s the industry’s biggest promoter, preaching the power of domains to anyone who will listen and bringing domainers together with moneymen and execs from the likes of Google (GOOG) and Yahoo (YHOO). He sports a $65,000 Rolex on his left wrist, a $32,000 diamond bracelet on his right, and is astounded that he -- a community college dropout -- is living like a king in a waterfront house in Boca Raton.



Its great that he's so rich, however, no matter how rich I become, you'll never find me wearing a diamond bracelet.

[Todd W]

Rabin teamed up a year ago with a Harvard-trained finance whiz named Bob Martin and domain speculator Marc Ostrofsky. They named their company Internet REIT and, according to Ostrofsky, are spending $250 million, probably far more, buying out domain owners as fast as they can find good names. (Ostrofsky, for the record, was the man who pulled off the much-publicized sale of Business.com for a reported $7.5 million in December 1999.)

Investing this kind of money for the long run is how to build an empire. :D

[Todd W]

But considering that Schilling’s traffic generated more than 1 percent of Yahoo’s $3.6 billion in revenues last year, you’d think one of those guys could have stood up and taken one for the team.

Now that's impressive!

[Chris]

I don't think there is THAT much value in domains. I also wonder if they aren't going to end up in legal trouble for using the term REIT. A REIT has federal guidelines it has to follow.

[paul]

"you’d think one of those guys could have stood up and taken one for the team.

Seems like a great example of the difference between an employee mindset and ownership"

[Chris]

I think betting that type in traffic is going to grow is a poor bet. It exists due to ignorance, and ignorance doesn't last forever.

[Cutter]

Most domain speculators aren't buying domains to develop them, they buy them to resell them to developers. (But that is changing) The type-in value revenue is just a base value. Its like owning prime real estate and throwing up a couple of vending machines vs building a shopping mall.

I should add, the value of a domain only exists because of what the owner does to it. Successful development means you have to understand the key factors to running an e-commerce site, SEO, building a community, etc. If you combine these factors with a prime domain name you are pretty much guaranteed to be able to sell the site for millions (but thats rapidly changing as the domain prices rise.)

[Chris]

Well that article seemed fixated mostly on type-in value.

[paul]

I thought the main point was that we are in the early stages of long term growth of internet related property. Type-in traffic seems like low hanging fruit that has mostly been picked. Since the game is young no one really knows what will work best in the long run. In the meantime we all try out things that work or don't work for each of us individually.

What continues to surprise me is the lack of appreciation for the website publishing model. People seem determined to get customers, get staff, and grow a business when there is no necessity for all that complexity. One person, admitedly a talented one, can write good content and learn to present it effectively on the web. Keep your visitors happy and coming back for more, use their feedback to broaden your niche, keep up with changes in marketing and promoting your site(s) and long term success should follow.

Certainly we will all need to be prepared to modify what we do. However, the domain, the content, the history, the traffic should all increase in value over time.

[Cutter]

I'm glad there is little appreciation for website publishing -- it means big oppurtunities for little guys like me. When I'm ready to sell, then I'll start evangelizing to the masses ;)

[Cutter]

Wow, I missed this one, fish.com sold for $1,020,000 last week.

[Todd W]

1. If you have the money to invest go for it.

2. If you have the money from loans to invest and the monthly income from your invesments pays for your loans go for it.

I think a lot of people rely on #2 partialy as they earn some $ monthly but they take a loss for a while until they can resell the domain for more.

I`ve looked into getting $100-$1000 priced type-in traffic domains that earn decent money daily/monthly to start building up my domain portfolio but talk about hard work! You have to spend time finding these domains, and then do extensive research on the domains. The more the domain cost the more "type-in" friendly it is, and the less research it takes to realize it's a good domain. (Televisions.com vs. buytvs.com). I`d rather spend my time publishing content ormaking a new program because I can control the outcome of that.