Understanding Market Value For Premium Domain Names

Understanding Market Value For Premium Domain Names

When considering domain name values there are many factors to consider.  Domain names that are short, category defining, and meaningful are rare.  They are highly memorable in advertising and easier to brand.  They are in high demand.  These types of domains are called premium domain names.  

One factor to consider are the keywords that make up the domain name.  Are these keywords that a consumer would enter into a search engine? How many searches use those keywords each month? How many advertisers are bidding on those keywords on Google?  

You can also get a sense of market value by looking at comparable sales.  Comparable sales do not need to be in the same category, but they should have comparable weights in other aspects such as popular keywords and search volume.  As one example to illustrate ‘similar weights’, consider the comparisons of comparing NYC to Los Angeles and NYC to Lilleville.  The NYC/LA comparison would have similar weights whereas the NYC/Lilleville comparison would not. 

Sometimes domain names sell on the secondary market. For example, in 2008 invest.com sold for 1 million USD.  In 2014 it sold to another buyer for 5 million USD.* Premium domains are rare and usually increase in value over time. Secondary market sales are another important factor in determining the value of a domain name.

Domain name valuation is both a science and an art. It is primarily data driven with some digital advertising sensibilities mixed in. If you are serious about making a premium domain name purchase, click here to learn more.