Domain Purchasing

[saad_sinpk]

Buying domains – if you should or not and how much to pay for an existing domain is a question that never goes away. This is my take on the art of buying domains ..
A few years ago, I received a phone call from a woman who was trying to sell the domain SEO.COM. The price? $500,000. Is this 1999 all over again?
First, I went to the site and ran a few checks. The site is spidered by Google, but it is completely dynamic and whoever programmed it wasnt thinking about the search engines when they coded the site, which is a little ironic. I then went to DomainTools.com to verify the site is not blacklisted, and then checked their IP as well; just to make sure things were clean. Then, things got messy.
I checked the old versions of the site through Archive.org. I quickly found that the site has never been a search engine optimization site until recently. In fact, it has changed hands many times and has been in many different industries. Basically, SEO.COM has been domain-skanked.
Update: The site went to a PPC Splash Page for a time, but is now an SEO site.
When purchasing a domain, you need to understand exactly what you are getting. For $500,000, I would expect some type of business is being generated. When I asked about the customer-base I was informed there wasnt one. Number of leads generated per day: zero. No web logs to verify traffic. Essentially, this is a half million for a domain name – nothing else. Her response? But according to the trends, SEO will be a $14 billion industry over the next four years. In my best New York accent I replied, And that means what to me?
Now, many people may approach you about purchasing their domain name and will have a figure that they want. How did they get this figure? Often, they did not have the domain appraised, and if they did, it was not by someone who is certified to do so. Remember, it isnt the domain name that makes a domain worthwhile; it is what is behind the domain that increases its value. Here is a checklist when looking to buy a domain from a company or an expired domain:

1. When was the domain first registered? – The longer the domain has been registered the better, but from an SEO perspective, it only matters how long the site has been indexed by Google, as that is only how long Google will count the domain.
2. How many owners of the domain have there been? – Just like a car, the fewer the better. With multiple owners, you run a greater risk the domain may have been compromised with Spam, Backlisted, etc.
3. Have there been multiple industries that have used the domain? - If there has, getting the domain to be branded will be difficult.
4. Has the domain ever been blacklisted? – If it has, I would walk, or make a low-ball counter-offer with the blacklisting as the reason why.
5. Has the domain been used for porn, gambling, hate, etc.? - Unless you are in these industries, if the domain has been tainted, you need to walk. Dont be cocky thinking you can save it. I have tried it on MANY domains only to fail each and every time.
6. Is the domain listed in the major search engines (Google, Yahoo! & MSN)? – Most domains that are for sale arent. Expired domains should be completely purged from the engines indexes, so this will not be an issue. However, if the site is indexed, that is a plus for you. Make sure you look at the URL structure to see if it is something that you can keep. If it is dynamic and all the URLs are a mess, the indexed pages wont help you, so you need to take that into consideration for your offer.
7. What is the Google PageRank? – If the site has a PageRank between 1-3, that could be worth $200-$400 tops. PR4=$1,000.00 and PR5=$5,000.00 and PR6+ sites go up from there. These are general estimates.
8. How much traffic does the site receive? – Generally, you can assign a value of 30 cents per visitor.
9. Can you view the weblogs for the last twelve months? – If the answer is no then you have to take any traffic estimates from them as basically being lies. Tell them that unless they can produce log files for the last 12 months, traffic will be considered zero. Why? They could have spent time falsifiying the traffic levels for the last few weeks with fake bots to increase their Alexa ranking to give the appearance of good traffic. Verify the traffic over one year – no exceptions.
10. What is the current customer base? – You can assign a figure based on the lifetime value of the customer that you are willing to pay for each – granted that they are real customers and are still current.
11. How large is the mailing list? – Dont get suckered into just taking the number they tell you. It must be verified. Find out how often it is mailed to and when the last time it was mailed. A list that is 25,000 in size that hasnt been mailed to in over a year is worthless. Also, have the undeliverables been removed? Many list managers do not remove undeliverables so their list is bigger than actually what is delivered so they can charge more. You may request to have a mailing sent out with an ad for your product and verify the open rate.
12. What is the daily sales/lead generation volume on the site? – Demand to see the data, dont just take the brokers word for it. Remember, they are trying to sell this domain and they will do whatever they can to move it – even lie. Replying with Show Me after they brag about the traffic levels will take the emotion out of it and get you back to reality. There is a reason they are selling the domain. If it was as good as they are claiming, why would they sell it?

Based on the answers to the above, you can gauge what the domain is worth to you. You might want to try DNScoop.com for an overall estimate of domain worth.

[dewancc]

Thanks for your post...

good post TS...

[smashedpumpkins]

Removed post.