DomainMart has published a monograph on
domain-name valuation. It outlines the strength and limitations of various
approaches to valuing domain names. It also describes the statistical model used
for their Appraisal Report.
DomainMart, a leading provider of domain-name secondary-market services, today
released a monograph on valuing domain names.
The aim of the monograph is to demystify domain-name valuation and demonstrate,
in non-technical terms, that DomainMart is not pulling appraisal numbers out of
a hat. It describes the strengths and limitations of various approaches to
valuing any asset and how the same techniques can be used to appraise domain
Ã¢â‚¬Å“Domain-name valuation is both an art and a science,Ã¢â‚¬Â says Alex Tajirian,
President and CEO of DomainMart. Tajirian adds that Ã¢â‚¬Å“the art comes from
knowledge and experience in understanding the factors that influence the value
of a domain name, while the science involves statistical techniques to quantify
the importance of these factors.Ã¢â‚¬Â Tajirian underscores the fact that, without
using statistical models, the reliability of appraisal values cannot be
DomainMart has developed a discriminant-regression-tree statistical model to
predict the price of a domain name. The model is based on a set of 12 predictors
of demand for domain names and historical prices of sold names. The estimated
model yields the best relationship between the specified predictors and value.
This relationship is used to predict the price of any domain name. One of the
obvious predictors is the domain extension. Another quantifiable predictor is
the number of searches in Google for the keyword/phrase embedded in a domain
The model appraises all gTLDs (com, net, org, info, biz), as well as a large
number of country-code domains (ccTLDs). However, the model is most effective in
appraising dot-com domains with no hyphens, as most of the publicly sold domain
names fall into this category. Ã¢â‚¬Å“We donÃ¢â‚¬â„¢t have enough data yet to price
hyphenated domain names with any reasonable accuracy,Ã¢â‚¬Â notes Tajirian.
DomainMart is a leader in providing domain-name secondary-market services,
including appraisal/valuation, auction, escrow and ownership transfer, leasing,
parking, management, and protection since 1996.