Valuing Domain Names: A Monograph By DomainMart

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.

Berkeley, CA (PRWEB) April 28, 2004 -– 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 names.

Domain-name valuation is both an art and a science," says Alex Tajirian, President and CEO of DomainMart. Tajirian adds that 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." Tajirian underscores the fact that, without using statistical models, the reliability of appraisal values cannot be ascertained.

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 name.

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. We dont have enough data yet to price hyphenated domain names with any reasonable accuracy," 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.

For more information, please visit http://www.domainmart.com/DomainNames/agent/appraisal/methodology.htm or contact:
Tom Saito, Marketing Specialist
DomainMart Inc.
TomSaito@DomainMart.com
Tel: +1 (415) 905-4234