What is the Value of a Domain Name?

So, what is a domain name worth? The answer that I have to this question, largely goes against the mainstream conversation of valuating a domain. In fact, I don’t even think that the answer needs to be long and drawn out. It’s simple. Call it a cop out response, but the answer is simply: a domain name is worth any amount that a person is willing to pay for it.

Boring answer, but I feel it’s true. Sure, you can valuate an entire web site that the domain is attached to, and determine it’s approximate worth based on a number of parameters. For example, when determining the value of a web site, you can ask questions such as: what is it’s monthly ROI? How much time and energy needs to be expended to maintain that ROI? Is it trending in any specific direction? Is the content unique, allowing it a fair chance in Google organic search results? And so on…

And of course, many people ask questions about the domain name as well, which does strangely affect the value of the web site, or perhaps more accurately, the perceived value.

Factors That Can Potentially Hinder The Value Of A Domain Name

There are factors that can hinder the value of a domain name to be sure. If a domain name was ever used for pr0n, or caught up in any legal issues, most people don’t want any part of it. Thanks to the Wayback Machine (Internet Archive) we can see snapshots of the history of many web sites, to see if it was used in any way that may decrease it’s value.

Another factor that can make a domain less worthy is if there have been any manual spam assessments made towards it by Google, and perhaps other search engines.

A Lot Of Times, Value Is Really Just “Perceived” Anyway Isn’t It?

A common practice on web site selling sites like Flippa, is to buy a decent web site, attach what is referred to as a “premium” domain to it, and resell it, landing the clever seller who knows a little about DNS a cool profit. And if he’s a nice guy, he will also do the change of address in Google and Bing.

To me, for the most part, value is just “perceived” when it comes to domains. I know by default people value .tv domains higher than they do a .com, but that’s only because the powers-that-be made the default initial price for .tv domains much higher.

And there is still the lingering suggestion that the keywords in the domain name are important for SEO. Are they? Maybe see Google’s reaction to that to see for sure. Sure, we know the words in a URL can make a difference for SEO, but will the homepage rank higher because of the words in the domain name? It seems not so much these days, if at all.

Yes, a site about the raw food diet could probably do wonders for human’s benefit if that phrase were in the domain, because it will be semi-clear what the site is about by looking at the domain name. But, there has been a lot of spam sites created with high focus on keywords in the domain name, with other sites without such domains having more value in terms of content. Plus, what about clever branding, like a site about raw foods might be called: RawkItOut for a play on words. Should it not be given the same chance for homepage ranking?

I believe Google also values transparency, so there has been some suggestion that WhoIs protection on a domain can negatively impact SEO. I can’t say for sure the impact, but I will tell you that spam increases greatly by email and snail mail when you leave that protection off. So, what to do?

Does Domain Age Matter?

Also, people talk a lot about “age” for domain names. Why on Earth would that matter when it’s being sold in the marketplace? In fact, I feel that you have more work to do when buying an aged domain, because you have a history of possible mistakes that were made with it.

The only thing that I have heard of that makes any sort of sense when it comes to the age of a domain having value, is that when a web site owner pre-registers her domain for several years, it shows that she is serious about her site.

Sure, if she has run the site for several years prior, the content attached to the site may have higher value, but I don’t see older domains being of great value just because they are old. Age doesn’t make them wiser.

Aged sites… that makes sense to me. Aged domains, not so much.

Personal Beliefs Might Fluctuate (And Randomize) The “Value” Of A Domain Name

I think it boils down to what someone might think of your web site when hearing the domain name, whether it has value. And this is really based on personal beliefs. Let me list a few examples.

1) I hear a lot that a .net domain might be looked at as less than valuable, because it’s a cheap knock off to a .com.

2) When I told a friend my web site address, which has the TLD .xyz he thought that I was kidding and that can’t possibly be real. My girlfriend (future wife, woot!) refuses to register a .xyz because she doesn’t lend it any credibility. Tell that to Google, who registered abc.xyz. Good buy I say!

3) A .com does always seems cooler than any other TLD doesn’t it? I know several Canadian business owners who would prefer not to purchase the .ca and opt for the .com instead, because it is “more valuable”. Is it? I don’t know.

4) Plenty of people, primarily those that still want to see their keywords in the domain name, like the idea of hyphens in a domain, for when they can’t get the “right” one because someone else squatted on the version without the hyphens. So, do hyphen domains have value? Depends who you ask. Me, in the past would say no. It felt like a spammy choice. In fact, when I was looking for screencast software that was both cloud based, and that I could use offline, I tried several for more than a year without feeling happy about the choices. And, I always skipped past screencast-o-matic.com in the search results because I didn’t like the two hyphens. I was a hyphen snob. Well, let me tell you, for whatever reason, I decided to try their software, and I have been using it for 3 years, and I don’t want to shop around anymore. Perceived value of a domain made me overlook a great site/tool for so long.

5) Remember that social site profilactic.com? It’s a one word, real word, domain name and a .com to boot, 3 plusses for domain name value wouldn’t you say? Well, some people would be embarrassed to have a site with that name in their browser history. Kind of decreases the value a little, when used as a social site, I feel.

I know that I thought of more “perceived value” ideas when I was chilling in the bath tub, but now I forget, so I will move on.

Is There Any “Real” Value In A Domain Name Choice?

I guess my point of all of this is, if you believe for example, that a domain has more value because it is a golden oldie, and you pay more for it (or convince someone to buy yours), then it is more valuable. However, you won’t be able to sell me a .com for more than $12 just because it’s aged, unless it’s attached to a web site. Because I don’t feel that age has value in this case. It’s a matter of a opinion, one that premium domain sellers would love for you to buy into.

And, if you are holding on to the idea that using your target keyword in the domain name will bring you higher in search results, and you pay more for it, then it is more valuable (to you at least), but it’d be tough to measure your ROI.

To me, I think the value of a domain lies in what it is being used for, and if the intended audience will see it appropriate for the intended purpose.

There are areas that are pretty much undeniable true though. Things like:

• A domain that is short and/or easy to remember probably has more value than the default price you could have bought it for from NameCheap or Godaddy, etc.
• A domain name that matches, precisely, the intended purpose of the site it is attached to has more value.

Another good read on this topic is our domain name picking tips article.