Since the resale value of domain names has been proven, the ‘science’ of domain name valuing has become a big business. There are many such appraisal firms in existence, and more are appearing on the scene. Domain names have often been referred to as ‘virtual real estate’.
Ultimately, a domain name’s value is what a buyer is willing to pay for it. If a potential buyer is not found or does not present themselves, then the value of a domain name remains latent, no matter how attractive the name is. The fact is that some domain names are significantly more valuable than others.
A few guidelines would help understand the value of a domain name.
If unsolicited offers are received for a domain name without it being advertised anywhere, this plainly shows that someone values it. The unsolicited offer can be used to set a new price base when trying to establish a valuation.
.com is still remains the most preferred extension for a domain name. Normally, a .com domain name will worth five or ten times more than the same name with any other extension. For example, dog.com is would be sold for much more than dog.net would.
The general rule is that the shorter the name the better. However, one must not omit important words and letters or substitute numbers for letters. For example, GoForIt.com is a brief and nice domain name with some value. Go4It.com is less valuable. GoFrIt.com is pretty much worthless.
Sometimes, hyphens help to maintain clarity, but they normally compromise the value of a domain name. Sports-Men.com will most likely sell for less than SportsMen.com. Caution should be exercised with spelling as any misspellings in the domain name will significantly reduce its value.
It is important to determine if the ‘thing’ the domain name to is generally a singular or plural ‘thing’. This is one of the most difficult value factors to figure out, given its subjectivity. However, it still requires considerable effort. BuyTicket.com is probably less valuable than BuyTickets.com, but Chat.com is probably more valuable than Chats.com.
Prefixes and suffixes can seriously compromise the value of a domain name. For example, adding an ‘i’ or ‘e’ or ‘my’ in front of a domain name spoils most of its value. However, there are exceptions such as eBay.com, a branded domain name which is worth millions.
Generally, the less the words in the domain, the more it is worth. However, familiar two word expressions are more valuable than rare one-word expressions. And familiar three-word expressions can be more valuable than rare one-word expressions. When comparing domains with the same number of words, it is important to think of the target audience and commercial usefulness of the domain name. For example, Business.com is a clearly commercial domain name with an obviously defined audience and possible use.
