Are domain names still undervalued?

[Juicy D. Links]

Undervalued... if you compare it with real estate and other offline assets?

This dude argues that domains are undervalued generally:

I believe domain names are undervalued for a few reasons:

Many business owners still don?t understand how the Internet works. You could give many business owners the best category defining domain name, but they would have no idea what to do with it or how to build a website. There is also still a tremendous amount of disparity in web development. I could put out a bid on a fully interactive website and you can bet I would get bids ranging from a few hundred dollars to tens of thousands of dollars for the exact same quote. If a business owner doesn?t know how to approach this, it?s easier to focus on what is tried and true.

What do you think?

[cherrylula]

interesting

[jmcb420]

A domain can only be appraised by two factors, imo

1. The person who owns it and what they are making from it.
2. What someone else will pay to own it.

I'm not so sure that the guy is wrong, but I'm not so sure he is right either.

[woj]

Most are overpriced, how could they not be?? The domain market is basically:
1. buy a domain for $x
2. try to find a sucker to pay $10x for it

[ThumbLord]

interesting read

[slapass]

Originally Posted by woj

Most are overpriced, how could they not be?? The domain market is basically:
1. buy a domain for $x
2. try to find a sucker to pay $10x for it

Yep pretty much. Look at sex.com, men.com and tons of other ones from this board.

[kenny]

Domains are tulipomania reincarnated

[Pipecrew]

spend 100k on a few domains and maybe you only make 30-40 a day, but what other investments are yielding 12-15% ROI. That amount in the bank is making you what, half a percent?

I don't think the internet is getting smaller anytime soon.

[onwebcam]

Extremely undervalued. Most have this idea "They only pay $x amount a year to register or renew so it can't be worth that much." Not taking into consideration that the owner might have paid hundreds if not thousands for it themselves and/or have had it for a long period of time and/or it has some sentimental value. I get the "You're asking price is too high" all the time and mostly from webmasters. Generally when I get such a response I don't even bother with communicating that person any longer on that particular transaction. Primarily because they couldn't possibly know how much I have into a name to tell me if my asking price is too high or not.

Enough of my rant I guess. Like a previous poster stated. The value of a domain comes down to one thing and one thing only. The happy medium between buyer and seller at that moment and time.

[Max Potential]

Personally I think that particular paragraph is spot on. I think In time the value overall of domain names, especially .com, will probably rise in the aftermarket for really straightforward names, even long ones. As the younger generation of entrepreneurs and business people come into the online business marketplace I think it will be inevitable and there is still lots of room for growth and expansion.

The guy that runs that blog is a highly respected 'domainer' and his views and thoughts are shared by many. In the past year I have been able to sell 2 domains well in the 6 figures, for the names only, no web sites. I have also been able to flip quite a few domains with relatively little effort for considerable profit. Also I currently own about 250 domains from a honed portfolio of over 2500 which are humming along the development chain very nicely for returns. (my only ones that struggle are the adult ones, for which I have very little background still as of yet nor have I figured out completely my own niche per se)

For a large portion of businesses out there, there is no greater way to reach such a mass audience. I've been involved with domains since 1992 and I think it has been a little bit of a roller coaster ride, but overall the ride just keeps going higher and higher when compared to any other investment tool I have. There are certainly strategies as with any other investment, but with some diligent attention I think there is a tremendous amount of money still to come.
Anyway, that's my

[wizzart]

I think they are overvalued generally. domain name is only 1% fo brend. Did I have youtube.com or facebook.com 7-8 years ago I couldn't sell it for 100$ both.

[kenny]

The guy who wrote the blog is a "domainer".

That sums it up right there.

There is a never ending supply of TLDs that can be created out of thin air.

I understand dot com is and has been the one that people recognize the one that gets type ins and the one that is desired.

I also see more and more businesses who aren't afraid to use a dot net or dot biz for branding and the more businesses who go this route the more surfers will begin to recognize the other TLDs.

The value of a dot com as with anything can be priced out of range where a substitute is the better chose.

Its all based upon the greater fool theory - the value is there as long as someone is willing to pay that amount. When the value exceeds this point the greatest fool is stuck with the object

domainers can continue to sit on domains and trade them amongst each other and this practice has worked and will continue to work for the foreseeable future.

This practice will not last forever though because you'll eventually price the domain to the point where nobody is willing to pay what you have paid.

This is how it works with all things.

This is how bubbles are formed.

[HighEnergy]

It depends on your POV, whether you are a speculator or a developer. I read JDL's question as presented as an investment. I think domain names by-and-large are undervalued, I'm not talking about the obvious junk names.

Adult domains, other than dictionary and certain longtails, are generally extremely poor long term investments. Seems like Adult WMs would rather spend countless man hours and countless dollars funneling, blind linking, trading, CJing and buying traffic than spend $xxxx/$xxxxx on a domain with natural traffic.

[Joe King]

I hate the pricks who offer me $60 for domains on Sedo

[Max Potential]

Originally Posted by Joe King

I hate the pricks who offer me $60 for domains on Sedo

Be careful with those...I completed a deal that started out that way and finished at $26k

[Juicy D. Links]

Originally Posted by Joe King

I hate the pricks who offer me $60 for domains on Sedo

People will always lowball remember everything is a negotiation

[Manowar]

Originally Posted by Pipecrew

spend 100k on a few domains and maybe you only make 30-40 a day, but what other investments are yielding 12-15% ROI. That amount in the bank is making you what, half a percent?

I don't think the internet is getting smaller anytime soon.

very good point

[wargames]

Originally Posted by Pipecrew

spend 100k on a few domains and maybe you only make 30-40 a day, but what other investments are yielding 12-15% ROI. That amount in the bank is making you what, half a percent?

I don't think the internet is getting smaller anytime soon.

Great point

[Juicy D. Links]

Originally Posted by HighEnergy

It depends on your POV, whether you are a speculator or a developer. I read JDL's question as presented as an investment. I think domain names by-and-large are undervalued, I'm not talking about the obvious junk names.

You have a good point. Generic names with traffic are investments that yield results for the long haul.

[d-null]

many are way overvalued, and you see alot of them and the people that are buying tend to be clueless, and then there are a whole bunch that are way undervalued and the people that are buying don't even look at those

cue any lame domain like "mobileporntubedufus.com" that was registered the day before yesterday and some moron thinks is suddenly worth $$$$

[Juicy D. Links]

Originally Posted by d-null

cue any lame domain like "mobileporntubedufus.com" that was registered the day before yesterday and some moron thinks is suddenly worth $$$$

Those dudes got anally ruptured

[XPays]

some names are undervalued and some are overvalued. for example a "quad premium" 4-Letter domain may have a standard value that is way above logic, whereas a generic keyword like "chickenpatties.com" may still have a tremendous road of growth ahead of it as companies get hip to how having the perfect keyword for their space benefits them.

[CYF]

I'm not really a domainer but I'm on a couple domaining boards. I see a lot of people buying .info domains and having garbage .coms thinking they're worth a lot.

I also see a lot of domains that are nice names that people undervalue as well.

It really cuts both ways.

[candyflip]

Who's posting from Juicy's nick these days?