How Much Is A Domain Name Worth? Part 2

There are many elements that have contributed to the value of a domain, and they are changing all the time. For the forseeable future, it appears that domain names will continue to rise in value overall and could be a great investment. In the past 11 years, I have owned and/or managed over 500 domains. By comparison, I am not a big player in the domain name game, but in my expenditures of both time and money, I will share with you what I have learned in my experience.

This article does not address websites, only and exclusively domains. This is important to note as many domains for sale come with a website and it is important to differentiate between the two, they are two seperate, independent things. It is also important to note that a domain names value can be strongly effected by it’s association with a website or not. Let’s say you see a domain name for sale, and it is only the domain name that is for sale, not the website, and a measureable amount of traffic is attributed to that domain. There may be a good number of incoming links to the domain as well, contributing positively to it’s value also. If you pull the site away you pull away the content, if you lose the content, you lose the links, you lose the traffic, you lose the value. Be very careful in purchasing a premium domain.

Some domain names may have had a website attached to it previously, but are independent now. You can see if a domain ever had a website by visiting “wayback machine”. If you purchase a domain that used to have a website you have to be careful of what kind of site it was. It may have been a complete disconnect from your business or vision of what the domain means. This disconnect could cost you thousands and take a lot of time to “undo”. Check the history of a domain name.

Here are some of the major contributing factors in domain name value. In informal order of importance and relevance to value.

Length. This is an old one and has not changed. The shorter a domain the better, generally speaking.
.com still rules. When you can’t find the domain you are looking for with a .com ending you may be tempted to go to a .net or .org, or God forbid a .biz, .us or worse. It’s not fair to say that you can’t have a great website with an extension other than .com, but I recommend going with a .com as SEO best practices. Sometimes you can buy your .com version as a premium domain, and it may be worth the extra money.
Existing traffic. This is a sticky one. This is what I addressed above. A domain name will only have traffic under 4 conditions:
Existing or previous content that attracted traffic
Incoming links that drive traffic and ranking due to “a.”
Fake or PPC traffic. Details of this is for another article.
Type-in traffic. Very hard to measure.

Brand-Match. This is one of the smartest ways to establish a good domain at a cheap price. You are able to choose any brand name you want for your product and many times able to find the .com version of it for less than $10.00 per yr. It is important to mention that when using this strategy you should support the domain with very a strong multi-media marketing campaign, the two work well together and increases your chances for success with both the brand and the domain.

Existing traffic to a domain is probably the biggest element of value. It can also be the most complex. Buying a domain that someone else owns is like buying a used car, but worse. There is no singular source for finding out the history of a domain like there is on a car, a VIN number. The only historical data you can find on a domain is very limited. There is no way to know what the previous owner did to drive traffic to that domain. It could all be legitimate but there are unlimited ways to drive fake traffic to a website. Fake traffic is invisible to a domain buyer and can also inflate the value.

Buying and transferring ownership of a domain is another thing and best fit for another article. This can be tricky and you can get ripped off easily if you are not careful.

Be very careful when spending money on a premium domain, I recommend using a professional domain name broker and dig up as much info as you can on the domain yourself.

Martin Walker has been in the advertising, marketing and public relations industry for over 20 years. His first ad agency was formed in 1984 as Walker Advertising and served the greater Riverside, Inland Empire market. After spending time and training in direct sales Martin began MK Walker, LLC based in Redlands, Ca.

MK Walker began as a traditional ad agency but began morphing into a web-based Internet publicity firm. In 1999 MK Walker, LLC was dissolved and Walker SEO was born. Walker SEO is a hybrid company that integrates online public relations distribution techniques, White Hat search engine optimization and SEO friendly website designed to serve one purpose for it’s clients: Internet Publicity. Martin currently manages over 100 Web properties and is a featured speaker on SEO, SEM and Internet publicity.

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