RE: [DNS] Valuation of Generic Domain Names

RE: [DNS] Valuation of Generic Domain Names

From: Mark Hughes <effectivebusiness§pplications.com.au>
Date: Thu, 16 May 2002 23:44:17 +1000
> Check these prices
> childcare.com.au 20,000
> children.com.au 0.00
> flowers.com.au 153,500
> date.com.au 100.00
> beer.com.au 25,000
> and my favourite
> concrete 50,000


My guess is that the above are either the actual prices the domain names
went for at auction, or close to.

From memory (not a reliable guide at my age, I must say) I think there were
3,006 domain names on the generic names list.

Approximately 1,000 of these had no-one register an interest in by the 31
Jan 02 deadline - they will be released and available to anyone to register
when the new system goes live.

A further number (I have no idea how many) went to auction, but had no
actual bids.  They will also be released and available to anyone to register
when the new system goes live.

I believe - I have no hard info on this, but based on some sketchy anecdotal
evidence - that of the ones that actually sold on auction:

* most of them sold in the $100 - $200 range
* a number sold in the $1,000 - $2,000 range
* a very few have sold in the over $10,000 range - even up to the $150,000
amount that someone quoted above.


This range makes it almost impossible to objectively 'value' a generic name.
Based on the evidence so far - and the auction is only about a third of the
way thru the alphabet, at names starting with F or G - a generic .com.au
name is 'worth' something between zero and $150,000, and there is absolutely
NO objective way to determine in what category any given generic name would
fall into.


High prices paid for 'generic' names are usually by buyers in one of two
categories:

1. The name matches their business, and they have wanted the name for yonks,
but haven't been able to get it as it was on the generic list.  For example,
'Orange' is the name of sizable telco, and therefore the generic name
orange.com.au may be quite valuable for them, and worth paying serious money
for.

2. The name is one that someone has hopes to use as the basis for a
'directory' or other 'build it and they will come' field of dreams type
site.  The fact that there is absolutely zero objective evidence for this
type of use being successful (i.e. no one goes to computers.com or
searchengine.com, they go to dell.com or google.com) won't stop some people
paying large sums for some generic names with this vain hope in mind.
Australia is a rich country, there are plenty of wealthy people / companies
around with money to spend, and they are free to waste it on this purpose.
"A fool and his money are soon parted"


Personally, I hope auDA raises a squillion from the auction.  That money
helps cover their operating expenses, and the more money they make from the
auction the lower their per domain name fee becomes for all the other
domains.  So having a bunch of wealthy people waste money on generic domain
names to reduce the fees to everyone else is a perfect win-win result for
all the other .au domain name holders.

If you want to know how much auDA makes total on the auction, become a
member (if you're interested in .au domain names you should be one anyway -
it only costs $100) and read their annual report at the end of the year.  It
should show up as a line item in the income section.




Regards, Mark

Mark Hughes
Effective Business Applications Pty Ltd
effectivebusiness&#167;pplications.com.au
www.pplications.com.au
+61 4 1374 3959
Received on Fri Oct 03 2003 - 00:00:00 UTC

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