How much would a domainer think a domain like eBuild.com is worth? $500,000? A million? As a parked domain it might be valued somewhere in those ranges. And if you owned it, as a domainer, you’d probably be pretty happy with that valuation. But what if I told you that its real value is more like $220 million?
Think I’m crazy? Well, what if I told you that, as a comprehensively developed site, it brings in $22 million in annual revenues off of 300,000 unique visitors monthly? Does 10x revenues sound unreasonable?
That revenue number and visitor count are real. The site is a comprehensive source for builders to learn about and source materials and fixtures. So, one more question: Let’s say you invest 2 million into building out a site like this. Say ten full time people working two years and a pretty good PR and PPC budget for promotion. Wouldn’t $22 million in revenues and a big valuation be worth that investment?
Or would you rather sell it for $500,000?
The future of domain valuation is not in type-in, parked, PPC sites, IMHO. It’s development because the stakes, long term, are much higher. This is where the big money is going to go.
March 3rd, 2008 at 10:18 am
This seems to be an ongoing theme over the last few weeks among domainers. I am in totally agreement about developing a domain. With a fully developed site you will attract returning visitors. The returning visitors are the one we should value the most. These are people who will pass on the site to other people who are looking for similar things. I also feel that domainers will gain more experience if they go through the steps of development, with regards to marketing and really promoting their site. I am totally agree with what you say. The future of domain investing is in development. If you build it they will come.
March 3rd, 2008 at 11:24 am
Great article you have there.
Keep up the GREAT Post and NEWS
March 3rd, 2008 at 12:23 pm
I agree with your basic premise, but it’s important to consider the risk and time-investment in approaching serious development. While most premium domains can be turned into profitable businesses, there is a steep learning curve toward achieving the type of success you see with eBuild.com It’s important to start small, experiment with different models of monetization and grow organically before investing 7-figures upfront. IMO.