Myths about sales prices grow like weeds.
With Sex.com hitting the auction block next week, mainstream media are in a tizzy writing about the auction of the “world’s most valuable domain name”. As usual, they’re comparing it to other big ticket domain sales. The only problem is that many of the sales they refer to have misleading sales figures.
Consider The Huffington Post’s “The 11 Most Expensive Domain Names Ever“.
Casino.com is on HuffPos’ list at $5.5 million, but the caption notes that it was the web site and domain. So that wasn’t a domain sale.
You’ll also see Business.com, which was widely reported as sold for $7.5 million. But that was in illiquid equity. According to the buyer, the equity ended up being redeemed for only $2.0 million. (The seller claims it ended up being more than $7.5 million.)
Then there’s the granddaddy of them all, Insure.com. Look, Quinstreet did not buy the domain name Insure.com for $16 million. It bought an active web site, and it generates substantial leads. The domain itself wasn’t worth that much.
Buyers and sellers often times have an incentive to pump up the sales price for domains. The buyer gets lots of publicity, and the seller gets an ego boost. Yet it’s painful to see this sort of misinformation continue to spread.
Jamie says
I wrote about that the other day as well Andrew after I read the CNN article. First he called it a domain name, then a web site and even stuck in Pizza.com to give an idea of price.. but they used the pizza sale that has a “reported price”. Why not use one of the many that are confirmed prices if you are going to use it to compare something.
Andrew Allemann says
@ Jamie – I’ve seen the pizza.com one many times, too. The original price didn’t stick, and it sold for a lot less. Still a lot, but less than what’s reported.
Jamie says
It would be nice if people used the Toys.com sale at $5.1M or the Candy.com at $3M as those are officially reported Domain sales if they wish to compare something.
Ken Hansen says
Great article Andrew. I agree. This kind of media distortion is not a good thing for our industry. As you point out, the story is good enough, compelling to readers and more credible without the kind of media hype we are seeing. I am thankful for the kind of truth-telling you do on a regular basis. Thank you.