Ok, so maybe your dictionary dot com domain doesn’t suck, but let’s be honest here. There’s a REALLY good chance it does.
One of the things I find frustrating with the domain industry is the false notion that almost any short dictionary word is a premium or semi-premium domain name. The reason I find it frustrating is because if you are interested in picking up a REAL premium name, you have to wade through all the crap that people mistakenly believe is amazing.
Take for example the following auctions I was recently in at NameJet and Snapnames. Note that I did not win either of these names.
Passive.com – sold at NameJet on 10/22/2009
NJWebDesign.com – sold at Snapnames on 06/04/2009
To me, of these two names, I’d much rather own NJWebDesign.com — although at the right price, I’d be happy to own passive.com also. To the domain community, passive.com, however, is the clear winner based on purchase price.
Passive.com sold for over $6,000. NJWebDesign.com sold for a little over $600.
What makes a domain valuable?
NJWebDesign’s average potential customer is worth somewhere between $800 and $80,000 — depending on the level of web design service provided. Web design companies pay over $10 per click to advertise for related terms. This name could be used instantly to build a web design company from the ground up, extend the reach of an existing company, or create a directory that would charge web developers handsomely for a listing. NJWebDesign — with business model included.
How about our dictionary domain? What’s passive.com’s average customer worth? Who knows? Quite frankly, who knows why anyone types passive.com into their browser. What on earth do they expect when they arrive at this domain? Complete and total mystery.
And so it is with thousands of other domains with high valuations — they’re names that at first glance look brilliant, but upon further inspection, offer limited potential for development… and at some point in time there HAS to be a development payoff. If there’s not, someone gets stuck holding a name that can’t justify its purchase price.