Best Approach for Appraising Domain Names

http://www.circleid.com/posts/7102311_appraising_domain_names/

Post by Alex Tajirian on Circleid.com who conducts an appraisal of domain appraisals.

I look at domain names based on a few criteria, some are technical and some relate to unspoken metrics...  the feel of the name.

Like any real world appraisal it depends on how you are using the asset.  A vacant low-lying piece of land surrounded by high ridges and lined in clay may be worthless as a residential real estate site, but priceless as a landfill. Similarly, the value of a domain name changes depending on whether you're building a media co on domain foundations, or whether you're in the business of selling the names themselves.

This topic deserves a more thorough future post.

Comments

[Alex Tajirian]

Dear Frank,

Thanks for posting my essay on your site.

It seems that you overlooked the fact that appraisals are specifically based on “Best Use Principal,” not just any use. See for example http://en.wikipedia.org/wiki/Real_estate_appraisal and http://en.wikipedia.org/wiki/Highest_and_best_use. Thus, under your example, the appraisal should reflect value under landfill.

Therefore, domain name appraisals should reflect the best use of the domain name.

Regards,
Alex