domainplays.com

Or what is anything worth for that matter.  I always believed that anything is worth what someone is willing to pay for it.  It all boils down to demand really, is there demand for that good?  Demand is what drives the price up on any commodity, be it a pair of shoes, a domain or a piece of real estate.

I often read about how domains are equated to real estate.  Sitting on a prime piece of real estate that’s located in an excellent location is like having a domain that has potential undeveloped value.  I don’t agree 100% with this analogy.  For starters, real estate requires that the neighboring area is also well developed and has traffic.  This does’nt apply to domains, at least not in the same way.  Domains don’t necessarily depend on neighboring domains to have traffic.   Also, the domain doesn’t necessarily have to have any traffic yet to be of value.   So how does it equate to real estate and how can we value a domain’s worth?

Well, first let’s divide domains into two categories, developed and undeveloped.

Undeveloped can be parked or unpublished.  They are generally just sitting there with no or little substantial content.  They rely solely on their domain name, and the demand on this name,  for worth.  We need to find out if there is demand.  We can do a google search for the exact word or phrase and see the number of hits we get to see how popular the word or phrasing is.  We can also use online services to see how many times a month that word/phrase is searched for.   Estibot.com’s online appraisal site gives us this data.   Once we find it’s demand, we then need to determine if this is a niche term or a general term.   In looking for a domain’s value, we’d like to determine who the end user is.  Having a domain appeal to a niche market may limit it’s value because some market’s may not be interested in paying top dollar for a domain.

Having a general term will have higher potential for getting top dollar.  Looking at the search results, you can determine who will be the end user and possibly what they may be willing to pay.

Another factor we would like to consider is the competition for that particular word or phrase.   We can overlook this when doing our keyword selection to our  search engine optimization but looking at it now will give us an idea if what we have is already heavily populated.   A high keyword competition means that lots of other domains are competing to get traffic from those keywords.  Having lots of demand for a set of word or phrase with little competition is best.

Besides having demand for the word or phrase, and low competition we need to see if the word or phrase is marketable in a money making way.   Let’s take one of my domains as an example, Peraturan.com.  It has 1.9 million hits on google with 2200 searches a month.   The keyword competition rating on it is 5/10, not too bad.   The word means regulation in Indonesia.  I have yet to find a market for it.  I cannot get affiliate ads for it since there aren’t many affiliate ads related to it.  Estibot values it 2200 dollars, it’s algorithm takes into account it’s traffic, google searches and competition rating (among other factors) but, as far as I can tell, doesn’t have a way of judging it’s marketability.  So we need to take into account how marketable the word or phrase is to determine it’s value.

To summarize the worth of a undeveloped domain, a generic term is more valuable than a niche term.    Better to have high google searches a month for the term and high google frequency (demand) and low keyword competition.  You should also be able to find a way to market the word/phrase.

Let’s look at developed domains.  A developed domain has a website.  Either it’s a mini-site, blog or full fledged ecommerce site.   I have found that the one determing value to a developed site is  it’s traffic.  If the site has traffic, the site has been well developed and has developed a market.  The bigger the market, the higher the traffic and the more valuable to the domain is.   When determining a value for selling a business, the general rule of thumb is to get your puchase price back in 3 to 5 years.  I don’t think this translates directly to purchasing developed domains but it could serve as a general guideline.  Consider how old the domain is and how long it’s been developed.  The younger the domain and how long it’s been developed will reflect on it’s price as well.  If the site is relatively new and hasn’t built a market then it’s harder to determine it’s potential value.  One will have to do market research to determine the potential for growth for the site.    Also, take into consideration the untapped potential hidden behind a poorly developed site.   Here we can apply the real estate analogy, a developed site is like a developed piece of real estate.  The existing building being the existing website, how well has it done and is there potential to a remodel to better serve the customer.  I believe the analogy works well with developed domains.

To summarize, when considering the value of a developed domain, look at existing traffic and how well implemented the site has served it’s customers.  Demand for your domain will be higher if you have more traffic.  Is there a need to better the site to better serve the customer.   Improving a sites appearance and functionality to increase traffic will increase it’s value.    Remember, a bad site will drive away traffic and diminish a domains value.

Don’t be intimidated with the idea of building a professional looking website.  You should seriously consider doing at least a mini-site.  A mini-site is a website that has just a few pages with some well placed ads  and filled with keyword related content.   The site should have usefull and content that is closely related to the domain name itself.  get your hosting account set-up through one of the many hosting services.  I use godaddy.com and have one of my hosting accounts set up using their wordpress hosting service to facilitate doing wordpress based website.

You should already be familar with Wordpress, and if you think you aren’t familiar with wordpress little do you know that you’ve come across many websites using wordpress. This site is a good example of what a wordpress site looks like.  Not happy with what I found through searching through the templates available at wordpress’s themes page, I finally found what I was looking for at dailyblogtips.com.  I joined the mailing list and got their wordpress themes package for free.  You get about 12 great themes for joining and they are perfect for mini-site development if you plan on incorporating affiliate ads into your wordpress site.  You also get some great plug-ins along with the download.  Plug-ins are “features” you can add to your site to give that extra cache that really takes it to that next level.

This site is using Studiopress  Red which has some integrated spaces for adding your ads directly into the page marked “adsense_sidebar160.php.”  Log into your wp-admin page to access the settings pages.    Get your code from your affiliate program, making sure it’s 160×600 pixels, and copy and paste it into the space provided.  Nothing could be easier.

Adding other ads

You can also add a few other ads into your sidebar such as the 125×125 buttons I’ve added here on the side.   From your wp-admin page, go to the “Appearance” option on the left, click on editor and find your sidebar.php file.  Once in, look at the information that is there and look for what you see on the sidebar from the website and look for the php code that relates to that information.  For example, on the side of the webpage you’ll find a heading of “Archives” and in the code you see the following that relates to it:

<li>
<h2>Archives</h2>
<ul>
<?php wp_get_archives(’type=monthly’); ?>
</ul>
</li>

The heading is the <h2>Archives</h2> part and you can create a new heading by doing the following, just be sure to place this after where you want it located:

<li>
<h2>New Heading Goes Here</h2>
</li>

Find where you want the new ad button to go, after what heading, and paste your ad code in this location.  Refresh your website page to confirm it’s been posted in the correct location.

Changing Image Files on Your Site

I’ve customized this site a bit by adding a few of my own image files.  For example, the small “dp” up above in the welcome area on top on the right was originally another image.  The original image was welcome.gif.  To change this, I uploaded the new image file that I wanted to the wp-content/themes/studiopressred/images/  folder and found where the welcome.gif is referenced in the php file using the editor option again and changed welcome.gif to myfilename.gif to get it to appear there.  You can also do this with any other images that appear on the site, including the images used in the background.  Just find out what that file name is, find where it’s referenced in the corresponding php file, upload it your images folder, and change the reference to the new file name.

Get Some Site Related Content That Updates Automatically

Find a site that offers linked news that is updated automatically.  This gives your site some usefull information for the reader.  For example, Domaining.com offers a domain news html code that they update daily with the daily news.  Just copy their code, find a place where it’ll fit on your site, and paste it in that location.  Update the changes, and refresh your site page to see if you did it correctly.

Create a Mini-Site that Looks More like a Store Than a Blog

You can also create a site that looks more like a store than just a blog.  Sign up to become either a Ebay affiliate or an Amazon Affiliate and display their items for auction/sale on your site with site related items.  You can do this by purchasing a ebay/amazon plugin for wordpress.  The one I’m looking at is phpbay.   They offer both versions, Ebay and Amazon and both function as a plug in that you install into your wordpress site.  Once installed, you can customize it to display site related items that’ll make your site look like you’ve got site related items to sell.

So, seriously consider building a mini-site.  All the tools are out there to build a professional looking website and most of them are free.

Ever wonder how all the experienced domainers get all the good domain names?  I sure did.  The best way to get a good name is to find one that is about to get dropped and buy it before anyone else does.  You can subscribe to a dropped list provider like the one offered by justdropped.com or you can look at the list provided by godaddy.com.   The point being, don’t limit your name search to what you type into a domain availability screen.  Expand your search to include soon to be dropped names as this is the best way to find a good name.

Ok, so you’ve found a name that looks good but don’t buy it just yet.  How do you know it’s good?   You’ll want to do a few “test” on the name to see if it is worth anything already.  You can use a free online valuation service like the one at websiteoutlook.com or estibot.com to get an idea of what these site’s automatic appraisals think.  Use the figures provided as an interesting indication of what the domain is worth, but I wouldn’t expect the figure to have any real weight.   From my experience, that number means nothing but is pretty cool to know.  You can even quote it to someone interested in buying it but don’t expect it be what it sells for.  I say this because that site is using a predetermined setting giving differing weight to the domain keyword stats.  The site may value some criteria more than others.  Or, it may not even be reading the keywords right.  What I do think is beneficial from these sites is the information they provide to value your domain.

Estibot.com, for example, tells you some very important information for your domain name.  The first thing you should look at is if there is an Alexa rank.  Alexa.com is good site to know when researching domains.  Alexa keeps track of all domain traffic.  You can go to Alexa and find out what are the top domains based on traffic.  It will also tell you if that domain you are interested in buying already has some traffic and give it a rank.  The more traffic the better. Another thing estibot tells you is what the Pay Per Click (PPC) is for the keywords it detects in your domain name.  This is important because affiliate sites will use these keywords in determining what ads to place on your site.  Because some advertisers pay more than others, you’ll make more money with a domain higher paying keywords.  Estibot will also tell you the monthly google searches done on those keywords.  This is also very valuable because it will tell how popular those keywords are.  Another important bit of information here is the competition there is for those keywords.  Less competition the better because you don’t want to get lost in a sea of similar domains.

So, to sum up.  You want:

1.  A good name, as generic and short as possible, hopefully one that was recently dropped and has some traffic.

2. High paying keywords in the domain name.

3. Low competition keywords that are very popular in the domain name.