Valuating Domain Names

As with real estate appraisal, appraising domains is a holistic blend of art and science.

While numerous domainers do valuate their domains based on opaque intuition or pie-in-the-sky hopes, however, we determine our prices very transparently, and based largely on the following seven factors:

• Similar past domain sales: How much have domains comprised of similar words, and having similar meaning, sold for in the recent past? We draw domain name sales history from public databases NameBio, DNSalePrice, and DNJournal. We might also consider prices of simialr domains listed on major retailers such as BuyDomains.
• Keyword search volume: How many Internet users are regularly searching for the words comprising the domain? For example, we would charge significantly more for UsedTrucks.com (368,000 Google searches per month for "used trucks") than TruckingRecruiters.com (only 590 Google searches per month for "trucking recruiters"). We gather reliable search volume data from the Google AdWords Keyword Tool, as can anyone.
• Advertiser competition: How many companies are seeking to capture leads on the words comprising the domain? For example, Googling "bed curtains" in the U.S. reveals a right sidebar filled with targeted sponsored links, whereas the lion's share of sponsored links which appear on a "tv bed" search point to generic comparison shopping sites or pie-in-the-sky furniture stores. Based on this factor alone, BedCurtains.com is worth substantially more than it might appear, TVBed.com somewhat less than it might seem.
• Market capital: Even though significantly more Internet users search for "love poems" than "personal injury attorney" each month, PersonalInjuryAttorney.com's worth is manifold that of LovePoems.com because, nearly always, clients pay far more to receive legal consulting than to read love poems. We gather market capital using the Google AdWords Keyword Tool ("Estimated Avg. CPC" column).
• Memorability: Is the domain short? Does it comprise relatively few keywords? Would the name command attention if plastered to a billboard? Does it pass the radio test? "Catchiness" factors critically into a domain name's worth.
• Extension: A .com domain is worth roughly 10-20x that of it .net equivalent. A .org may be worth more or less than its .com equivalent, depending on how nonprofit or freebie-oriented the name is. While .com, .net, and .org are usually the most valuable extensions, certain name and extension combinations fit beautifully together. Who wouldn't want to own a domain like Fishing.net or YouAnd.me?
• Age: Like real estate, or fine wine, premium domains increase in value over time. We own domains dating as far back as 1995, when there were only 70,000 web names registered. Today there exist over 200,000,000 domain names (3000 times as many!).

While there may be additional factors we account for based on insider knowledge of the industry underlying each domain, the above seven factors apply universally, and are the most important considerations informing our domain appraisals.