Buzvia Blog

Like any other commodity, the perception of scarcity brings with it value and domains are no different.

What is a domain?

A domain is a unique address on the internet that points to your company or personal site. It comes in general designations, referred to as top level domains (TLD) such as .com, .biz, .info but can also be bought for specific countries (ccTLD – country code top level domain) such as .us, .ca, .co.uk. There are also “product” specific domain, the only one so far that I am aware of is .mobi. And believe it or not, there actually is a country whose main gross domestic product is it’s domain designation, .tv, it’s the small island nation of Tuvalu!

Why are SOME domains so valuable?

The unique aspect about domains is that there can only be one. If you own woodmarvels.com, then nobody else, short of a trademark infringement can take it away from you. If you are a huge company who relies on a domain to bring you customers, a domain that can be bought for only a few dollars can skyrocket to several thousands if not several hundreds of thousand of dollars. Some domains are actually worth millions such as sex.com and other, mostly two and three letter domains. If you happen to own hp.com and wanted to sell it to Hewet Packard, then that domain is easily worth tens of millions of dollars. This needs nicely to the next question…

What is domain speculation?

Well, like oil speculation or the futures market, it isn’t too difficult to realize that if you own a two or three (now for letter) domain that there will be some value to that as time goes by. Some people who don’t understand the market purchase thousands of domains then end up loosing a small fortune because they don’t understand that owning a domain like thisisthebestdomainintheworldbarnone.com has absolutely no value. The smart people have a portfolio of a few thousand domains using the parked paging system in which an informational page shows links that generate revenue for the domain owner. This has lead to yet another industry…

Domain Tasting or Domain Kiting

This is an ugly industry no matter how you cut it. Basically, domain kiting, which is a more apt word then domain tasting involves taking advantage of the 48 hour “refund window” in which a customer can change their mind on a domain they have just purchased. For instance, if you buy sandboxranch.com and decide a the next day that you no longer wish to have this domain, you can apply for a full refund. This normally isn’t a problem but when two thirds of ALL domains are acquired and recycled this way… you got a problem. You probably have first hand experience with this when you try to register a domain that is already taken, more often then not, the domain in question goes to a parked page that will only be there for a few days.

My domain purchasing lessons

When I registered woodmarvels.com for a site I wanted to develop of the same name, the very next day somebody purchased woodmarvel.com… I was pissed but learned a very valuable lesson, if you buy a domain, buy both singular and plurals. Luckily, just today, woodmarvel.com was again on the open market, I snapped it up ASAP! Another lesson is to purchase different spellings of a site you have, for instance, I own buzvia.com but also buzzvia.com and busvia.com along with a few other variations. This adds value both in the short term and long term. In the short term, customers may put in woodmarvel.com instead of woodmarvels.com, as such, I would have lost business while in the long term, saying you own variations on a domain increases the value of a domain property. I have heard from many that you should also purchase the country code top level domains as well and other variations, to be honest, I believe this is a complete waste of money unless you plan on entering those markets… if you own .com that is international. You can advertise a .com in China just as well as in Tuvalu better, in my opinion, a ccTLD. Right now, I own a little under 50 domains myself, each one related to a business idea I want to launch… so the final lesson is, if you think something may be of interest to you in the future, get the domain before it’s acquired by somebody else.

The Bottom Line

Domains are the poor mans stock market but if played right, can yield incredible value.

Buzvia: ZipitLive.com

There comes a time for many sites where the founder has either simply lost interest in the site they have been involved with or are looking for a quick payout to cover unforseen expenses. If you are serious about selling your site, here are some essentials you must have covered to gather interests from a buyer.

Traffic

Listen, no matter your current PR value or keyword listing in major search engines, it still comes down to traffic. How many unique visitors and page views do you have? Where is the traffic coming from and where is it going after visiting your site? How long do visitors stay ON your site and most importantly, are they repeat visitors? You should show this using a combination of Google Analytics, site meter and server logs, Alexa and Compete help as well. Nobody who knows anything about the net will touch your site with a 10 foot pole if you don’t offer this information freely.

Money

You got a great little site, you are making money but how much? Is it going up or down? What is your revenues related to number of users? Are you having to issue any refunds? Do you have revenue streams OTHER then Google Adsense or other type of online advertising aggregators? You should provide at the very least, a screen shot from paypal or bank statements backing up these numbers as well, be sure to blur out any personal or financial information.

YOU

How dependent is the site on YOU? Can the site even operate without you being involved? You will often see with forums that once the founder goes away, many of the lead moderators follow suit and in no time, you end up with a great site for spammers. If you are essential for day to day operations, selling the site just isn’t in the cards until you handle this matter. If your site was funded by Venture Capitalists, Angels, Partnerships or equity exchanges then your job can be both easier or harder depending on your approach.

COOKIE CUTTER SITES

If you purchased a cookie-cutter site, usually relating to icons, template designs or other “mass production” type thing which you “built from scratch” only a few months ago and now asking a few thousand dollars for… don’t bother. There sites are not a dime a dozen, they are beyond worthless.

Marketing Costs

You have a site pulling in a million a year, great! How much are you spending getting that million? If your answer is a million and a half a year, then you are in big trouble… you would make more money being homeless begging for change on the street… who wants that? Let’s be very frank, if you are spending more money that you are making and don’t see an end to this then you have built yourself a fantastic money burning machine and little else. Your only hope is VC, IPO or Angels who share the same vision as yourself but even they want to see the light at the end of the tunnel BEFORE they put a chunk of change down.

Price: What do you want for the site?

This is the toughest thing to come to, don’t expect a Facebook type deal where you can be worth 15 billion dollars overnight, usually, price is based on 1.5 years of gross revenue. This is highly variable as it depends on the factors listed above.

How to sell?

There are a number of sites out there dedicated towards selling other sites, I am mentioning them by name on purpose… this is a VERY shady industry, even shadier then SEM service providers. You could put up your site in a TechCrunch forum and see what kind of feedback you get, you could advertise using Google Adword but usually, the best people to sell to are your customers. Put a note out on your site saying “I want to sell, here are my reasons, anybody willing to purchase?”.

The Bottom Line

Selling a site should be equal to selling your first born, otherwise, you missed out on something.