Sedo revenues

[ivdnet]

If you have a domain that earns 1 dollar per day or 100 dollar per day, does not matter, at what price this should be sold? (i.e. 100, 10, 5 times yearly revenue or else...)

What is a fair price, regardless of the domain name and if this has high PR and many links...

Thanks!

 

[DNjet]

Depends on a lot of factors , is the domain is a pure generic type-in domain , what extension it has , is it a drop with links in which case the traffic will slow at some point , is it a typo , what category does the domain fall into , what the current PPC bids are on those category keywords , does it have overture with extension , does it have overture without extension , if its a drop what was the site formerly doing , how long was it online , alexa rank , where are the links located , are the links on good PR pages , are they on the front page or buried ,

uhmm...1 year revenue on average.

 

[Theo]

For some names (dictionary, keyword, generic, 2/3 letter etc) revenue is irrelevant. Unless the domain is some oddball that simply generates traffic.

 

[ivdnet]

Thanks guys, really appreciated!

 

[dotNetKing]

Just to share one type of value I try giving to names that regularly earn a good amount, and which seem to be type-ins rather than links from other pages:

If you had $1000 invested in a high interest paying bank account, how much would you expect to get in interest a year? 10% would probably be very good for a fairly well guaranteed return, ie $100 a year.

Now if you have a domain that is earning $100 year, year in year out, or possibly even increasing with increasing PPC rates, that is like quite a good return from a $1000 investment, and on this basis, $1000 would seem to be quite a good amount to aim for (assuming it isn't a valuable generic or brandable name).

This might be a rather naive way of looking at it, but I have found it quite useful.

On the other hand, as long as I have the time and effort to continue reinvesting in profitable domains, I could probably earn 30% to 100% a year by reinvesting in the right domains, and it might be better to sell at a lower figure than the hypothetical $1000 to reinvest the money and make a better profit.

The nearer I get to retiring, the more attractive the 10% return value be.

 

[Edwin]

I like the savings account comparison, though nowadays most accounts seem to pay 5% or less (in the US or many countries in Europe) rather than 10%, which would double the figures.

But the basic principle remains valid - if you had a domain earning $10,000 a year then you'd need $200,000 in cash to earn that same amount from interest alone (assuming 5% interest).

 

[aldwin]

I think that it really depends on the domain quality.

If you sell a generic domain (Guitars.com) you can get up to 15 years revenue (I saw this), but if you are selling a domain with tm issues (Vissa.com?) then you'll be lucky if you get 1-2 years revenue.
If the domain is a drop of an old site you won't usually get more than 12 months revenue

 

[korzon]

Here are my two cents,

If the domain has no value other than it's traffic (For example, CheapFlights.com has a lot of value other than it's traffic. It's a lot more brandable than any available domain names), then it comes down to risk VS reward.

A US government bond for 10 years all but gurantees you 5% interest per year. The risk is none-existent, and if the US government falls I'm guessing so will domain name value. It will pay you no less and no more than 5% every year for 10 years.

Now let's take a domain name which made $50 in the past year. If you buy it for $1,000 and the revenue remains the same for the next ten years, you will make the same amount of money as you would with the US goverment bond.

However, the revenue from the domain is not a sure thing. It can go up, and it can go down. PPC prices do indeed go up, more people connect to the Internet and it stands to reason that if nothing unexpected happens the domain will make more money every year.

However, "if nothing unexpected happens" is the key factor here. Ten years is a long time, perhaps some new .com regulation will exist in five years that will alter the the value of domains. Perhaps someone will hack into your godaddy account and steal all your domains (It is more likely to happen then someone stealing a US government bond from your bank, which is ofcourse government insured).

Now it comes down to how you asses the risks that revenue drop and the chances that it will rise. If everyone had a degree in economics, it's likely that this alone will determine the value of domains and assets in general. But people usually don't think this way, they go with intuition and sometime actually have personal feelings for a domain. (I registered MyBobo.com because I like to say "Bobo" at random occasions).

Personally, I noramally wouldn't pay more than two years revenue for a Sedo parked domain unless it had value other than it's current traffic. The main reason is that it's very dificult to get data about the traffic sources a sedo domain is receiving. HitBot abusing aside, if traffic is coming from expired links for example it is likely to fade off. If it's coming from bookmarks it is also likely to fade off. Only if it's coming from just random type-in then it's likely to stick and even rise.

Because it's very dificult to get this information, and the resources one needs to spend in researching it may themselves make the purchase not economic (You'd spend so much time researching domains that when you do find one that is worth purchasing it wasn't worth the total amount of time you spend finding it).

These were some long cents, hope someone reads this through... :cheeky:

 

[britishbulldog]

Here are my two cents,

If the domain has no value other than it's traffic (For example, CheapFlights.com has a lot of value other than it's traffic. It's a lot more brandable than any available domain names), then it comes down to risk VS reward.

A US government bond for 10 years all but gurantees you 5% interest per year. The risk is none-existent, and if the US government falls I'm guessing so will domain name value. It will pay you no less and no more than 5% every year for 10 years.

Now let's take a domain name which made $50 in the past year. If you buy it for $1,000 and the revenue remains the same for the next ten years, you will make the same amount of money as you would with the US goverment bond.

However, the revenue from the domain is not a sure thing. It can go up, and it can go down. PPC prices do indeed go up, more people connect to the Internet and it stands to reason that if nothing unexpected happens the domain will make more money every year.

However, "if nothing unexpected happens" is the key factor here. Ten years is a long time, perhaps some new .com regulation will exist in five years that will alter the the value of domains. Perhaps someone will hack into your godaddy account and steal all your domains (It is more likely to happen then someone stealing a US government bond from your bank, which is ofcourse government insured).

Now it comes down to how you asses the risks that revenue drop and the chances that it will rise. If everyone had a degree in economics, it's likely that this alone will determine the value of domains and assets in general. But people usually don't think this way, they go with intuition and sometime actually have personal feelings for a domain. (I registered MyBobo.com because I like to say "Bobo" at random occasions).

Personally, I noramally wouldn't pay more than two years revenue for a Sedo parked domain unless it had value other than it's current traffic. The main reason is that it's very dificult to get data about the traffic sources a sedo domain is receiving. HitBot abusing aside, if traffic is coming from expired links for example it is likely to fade off. If it's coming from bookmarks it is also likely to fade off. Only if it's coming from just random type-in then it's likely to stick and even rise.

Because it's very dificult to get this information, and the resources one needs to spend in researching it may themselves make the purchase not economic (You'd spend so much time researching domains that when you do find one that is worth purchasing it wasn't worth the total amount of time you spend finding it).

These were some long cents, hope someone reads this through... :cheeky:

Thats why i own cheaphotel.net one of the best keywords in the lucrative hotel market !

 

[dotNetKing]

These were some long cents, hope someone reads this through... :cheeky:

Yes, sure did. Thanks for your angle on this.

One point worth mentioning in relation to your post is that you are looking at this from the point of view of purchaser of a domain for which you have no guarantee of the traffic.

The original poster seems to be thinking about domains he already owns and that are making this sort of income. ie he would have fairly good knowledge of whether the traffic is expired domain traffic or type ins.

I'm also thinking in terms of domains that I know about, having had them for a few months or maybe years.

I have a slight dilema with one domain that was making just a few cents a month with around one visitor a day, and then suddenly started making between US$1 and US$2 a day.

I got an offer of US$500 for it, which I would have jumped at a week ago, but now that it could potentially make between $365 and $730 a year from type-ins, I'm having second thoughts.

The fact that I only have this level of income for six days doesn't give much/any guarantee on whether this level of income will be sustained in the long term.