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What value a domain name?

August 27, 2013 by Guest Blogger

What value a domain name?/web browser{{}}The domain name business can be extremely lucrative, with people willing to part with considerable amounts of cash to secure the perfect name for their hot new start-up or innovative product.

Although there are still a plethora of dot-com addresses available, most word-related domains were snatched up a long time ago, most likely they are being sat on by the owner until someone shows signs of interest.

If you are lucky enough to own a catchy or highly desirable domain, it can be difficult to reach an accurate and fair valuation. Likewise, if you are looking to purchase one, you must understand what you are paying for.

Although there are plenty of ‘estimation’ tools available online, their accuracy is often highly questionable and ultimately it comes down to one thing – how much the end user is willing to pay for it.

Brandability

Due to the ever-decreasing effectiveness of exact match domains (eg mobilephones.com, mountainbikes.com, etc) in the search engines, branding is the way forward. If a domain name is catchy and memorable, you can easily build up a strong brand around it. Better yet, a name that is pronounceable, while not necessarily forming a real word, is also a great alternative. For example, Waze.com or Twilio.com or Zynga.com.

If a domain name meets the above criteria, it’s almost certainly going to increase its overall value. Although they are hard to come by these days, a domain that is short in length, regardless of how pronounceable it is, will also hold a higher value.

When it comes to extensions .com remains king, with .net and .org generally being worth less. More and more obscure domain extensions are becoming available, making it easier to construct a word that incorporates the extension (eg www.Mirro.rs). In some circumstances, these can fetch high prices in auction. Although .coms are generally more valuable, it all comes down to what domain is right for your business.

Authority

The overall authority of a site is often the main factor taken into account where established domains are concerned. The rapid advancement of the World Wide Web coupled with the sheer amount of potential customers that regularly surf it, means people are happy to pay for a domain name that has value from a search engine optimisation perspective.

Important factors include:

  • Domain age.
  • Amount and quality of external links pointing to it.
  • Its historical ranking history.

A large number of low quality and ‘spammy’ external links pointing to a domain can have severely detrimental effects on its ability to perform in the search engines. This in turn can greatly reduce its value, due to the amount of work required to ‘clean up’ the link profile.

Always be sure to thoroughly explore a domain’s link data and consider using the Wayback Machine to view historical snapshots of what site used to reside on it.

End user

Taking the above factors into account may help you arrive at a rough valuation of a domain, but if you can’t find an end user (ie someone who might be interested in the domain), it is essentially worthless. An end user is usually someone looking to launch a new business or complement an existing one, who can greatly benefit from owning the domain.

Consider exploring the potential value of a domain name by simply searching on Google for any keywords it contains, and seeing who is currently advertising for these terms. If people are paying to advertise within the search engines for a term, the will most likely be interested in a matching domain name.

Post supplied by Mark Potter of ICANN accredited domain registrar and web host www.namecheap.com

Visit the IT Donut for a host of other blogs about domain names and other business IT related topics.

Has your business got the X Factor?

June 07, 2010 by Chris Barling

In business, as in the popular TV show X Factor, more people fail than succeed. If this can be attributed to luck, some people seem to have more luck than others. So it’s reasonable to ask if there is such a thing as the ‘business X Factor’ or is it all about being in the right place at the right time?

Make your own luck

I guess I should know all about luck. I co-founded ecommerce supplier SellerDeck and we managed to float our company on the London Stock Exchange during the dot com boom, raising £25m and valuing the company at £100m, despite at that point having never made a profit.

Looking back, it is all rather ludicrous, so we were definitively in the right place at the right time. Having said that, we didn’t get there by accident. I had carefully looked at technology trends for several years before starting the company, concluding that the internet in general – and ecommerce in particular – offered a tremendous opportunity. At the time, even Bill Gates wasn’t a believer.

Know where you are going

Simon and Amanda Walker sell specialist pens online. Their original target was people who are interested in unusual pens, so they knew that to interest these people, they would have to provide a massive range. That’s why their website states that they offer the “widest choice of pens on the planet” – more than 6,000 at www.cultpens.co.uk. They understood the customer requirement; they created a plan that would satisfy it; and now they have a highly successful business. Textbook stuff.

Be profitable to survive

There are a variety of reasons for starting a business. Some start because they want to get rich, others want to change the world, but no one wants to fail. Avoiding failure means making a profit. Profit is the oxygen of business. Even if the principle objective isn’t about money, you still must make a profit. There’s no need to worry about the X Factor if you don’t make a profit – you won’t be around long enough to find out whether you’ve got it or not.

Focus on customers

One of my company’s customer’s grew his business from a front room start up to a business with £23m sales. Chatting to founder Steve Hanbury recently, I was reminded of how important his total commitment to customer service and value was to his success. Customers pay the wages; if we forget this we’re in trouble. All successful businesses need to focus on their customers.

Avoid rigidity

The press delight in stories of hapless travellers whose satnavs took them up a track or to an impassable river. The drivers thought that they knew where they were going, but more attention was required. It’s no different in business; when disaster is imminent it’s critical to be flexible and not insist on sticking to the business plan.

The true X Factor

It’s worth asking yourself whether practising the business virtues mentioned above comes naturally. Focusing on customers, setting a plan yet remaining flexible to change and also enjoying yourself while doing it seems a big ask. Are these the key to success?

It’s unfashionable to admit to watching X Factor, but I hold my hand up and say that it’s interesting to note that many of the talented contestants are sometimes hesitant about their capabilities, while those with least talent are often convinced they have great ability. The best are generally humble and are looking to improve. The true X Factor might be a willingness to receive input, take it on board and strive to get better.

Chris Barling is Chairman of ecommerce software supplier SellerDeck

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Ten sites for selling your wares

April 28, 2010 by Emma Jones

Whether you’re selling your knowledge or products crafted by your own hands, there are online platforms to help you reach an audience of customers and make sales. Here is my top ten:

Business services  If you’re an IT contractor, graphic designer, business coach or expert translator, these sites might help you:

  • Peopleperhour.com – more than 45,000 freelancers use this site to source work and new clients. As the freelance, you respond to job opportunities, pitch for work and receive payment, all via www.peopleperhour.com
  • Business Smiths – companies needing anything from business plans to web design head to www.businesssmiths.co.uk to find experts who can help.
  • Wooshii – a new kid on the block, this site has been created for creatives who produce video and rich media. Companies upload their projects to www.wooshii.com and Wooshii-registered creatives respond with their best offer.
  • Lingo24.com – for linguists, Lingo24.com can become your business development tool as work is sourced on your behalf. Clients include multinational companies and government bodies and Lingo24.com services these clients with a workforce of thousands of freelance translators spread across the globe.

Personal services If health, beauty and wellbeing is more your thing, here’s where to head:

  • Return to Glory – London’s largest home massage and mobile beauty company, the site is a displaying ground for beauticians and health experts who deliver treatments in the client’s own home. Visit www.returntoglory.co.uk
  • Wahanda – welcome to the world of therapists, stylists, practitioners and trainers. They gather at wahanda.com as customers come looking, ready to order their services.

Handmade crafts There is a growing number of sites for the artisan and handmade community. Here are just three of them:

  • Etsy – the mother of all craft sites. Since the company launched in June 2005, more than 250,000 sellers from around the world have opened up Etsy shops.
  • Notonthehighstreet.com - this site offers personalised gifts and other delights you won’t find on the high street. At the end of 2009, the company reported 1,500 craft designers using the site with sales of £6.4m. Visit www.notonthehighstreet.com

Manufacturing

  • Alibaba.com – through this site you can make your niche manufacturing dreams come true by sourcing production in China and then selling the finished item. Visit www.alibaba.com 

Emma Jones is Founder of Enterprise Nation, the home business website, and author of ‘Spare Room Start Up – how to start a business from home’. Her next book, ‘Working 5 to 9 – how to start a business in your spare time’, will be published in May 2010.

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