Who hasn’t daydreamed about sitting on a goldmine or striking it rich? Techies are no different in this regard, and many people have made a very deliberate attempt to strike it big in the wacky world of domain names – investing thousands of dollars building massive portfolios of domains, hoping that one day, someone will be willing to pay a colossal sum of money in order to own one of them.
So when I came across this article, detailing how the Canadian band The Tea Party could potentially reap a million dollars for their domain name, I had to chuckle to myself a bit. After all, these guys registered the name to actually use it, not turn it over for profit. It’s sheer dumb luck that their band’s name is the same as a very popular (and controversial) US political movement. Oh the irony. And isn’t that almost always how it goes? The person who buys loads and loads of lotto tickets wins nothing and the person who buys one just for fun wins the big one without even trying. The other amusing thing is that the band is also apparently not in favor of the Tea Party Movement’s ideologies, making it a bit of a moral decision as well for them as well.
Speculating on domain valuation isn’t an exact science. Go to a number of sites like www.urlappraisal.net, www.valuate.com, and www.estibot.com and you’ll get valuations for “teaparty.com” in the range of $43,000 to $137,000. And like Mark Jeftovic says in the article quoted above, domains are only worth what people are willing to pay for them. So in that sense, domain names are a lot like antiques, and domain valuation sites are like a self-serve “Antiques Roadshow”. Sure, they can give you an estimate based on what similar domains have previously sold for, but it doesn’t necessarily mean that someone will pay that amount now, nor does it mean that there’s anyone who would even be willing to pay for that domain at all. It could effectively be worth $0 if no one wants to pay for it.
Don’t believe me? Go to www.ipad.com. Bet you saw something you didn’t expect to see. That’s right, even Apple Inc. – currently the world’s most valuable company with a net worth of $382 billion – hasn’t bought ipad.com from whatever company has owned it since 1997 (before the advent of ipods, iphones, ipads, etc.). And good for them. Obviously their sales are doing well enough without it. Maybe RIM should have considered buying www.playbook.com …
It just goes to show that if someday you get an offer on your domain, and you decide to refuse it, it doesn’t mean there’s something better on its way if you wait it out. You might walk out of the domain casino with just the domain you walked in with.
And conversely, a domain – like teaparty.com – could sell for many times more what “similar” domains have previously sold for. After all, the domain social.com recently sold for 2.6 million. Who says millionaires can’t be made in this business? So domain valuation sites are merely giving guesstimates, which in my opinion, should be taken with a grain of salt. And maybe a little lime and Tequila if you’re disappointed with what they tell you your domain is worth.
Anyone looking to strike it rich using domains should be forewarned that it isn’t as easy as it looks – there are a LOT of people playing this lottery. Just Google “domain auction” and sift through the results. There are lots of sites available for people to hock their wares. However, if you’re looking to play the domain lottery, a good place to start is the CIRA TBR list, where you can pick up some potentially valuable domains at a more attractive price than those seen at domain auctions.