In August of 1998, the domain AltaVista.com was sold to Compaq for a cool $3.5 million dollars. Other domain names have sold for millions as well: Business.com ($7.5M), Autos.com ($2.2M), AsSeenOnTV.com ($5M). Maybe you have registered some domain names in the past and wonder if you're sitting on a goldmine? Keep dreaming! During the dot-com craze, domain names were a hot commodity. Although a strong market exists for purchasing and selling domain names, the days of the multi-million dollar transactions are over. Hundreds of sites offer appraisal services for domain names. If you are interested in either investing in a domain name with the hopes of turning a profit or if you are considering selling a domain name that you own, take the time to determine the value of your domain and whether an appraisal makes sense.

Second Opinions

The appraisal process for domain names is very subjective and is different depending on who conducts the appraisal. As an experiment, a writer once submitted a domain name for an appraisal to over five appraisal services and received values ranging from $200 to $160,000. If you are interested in paying someone to determine the value of your domain, you may want to consider getting a second opinion. Because there are no standards for valuating domain names, anyone can offer to valuate your domain name using whatever methods they choose. And because there are no types of domain name valuation certifications, you can never be sure whether the person you choose to valuate your domain name has any experience.

Market Rules

One of the reasons people paid huge sums of money to purchase domain names like "drugs.com" (which eventually went under along with many other internet businesses) was because the market was completely immature. People assumed that if they owned a memorable address, they would automatically be inundated with visitors and retain a majority of the online marketplace. Their assumptions were wrong, and as a result, paid a premium for their domain names. Ultimately, it is the marketability of the domain determines its value, not whether the name is simply catchy (although being catchy does help). So the real question to ask is: what can be done commercially with the domain? You may have your hands on "eggs.com" with aspirations to sell eggs and egg-related products over the internet. However, there may not be any market for purchasing eggs over the internet (i.e. buyers and sellers who could benefit from exchanging goods electronically). "eggs.com" may be extremely simple and catchy, but if there is no market, it really has little value.

Although it may be difficult to assess, calculating the actual estimated revenues that could be generated by a site can help assess the value of the site. This could require some complex research of the market (competitors, buyers, trends, etc.) but could yield the best determinants of the domain's value.

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