Look at the maximum population, not the total population of multiple locations.
There are a number of ways to value a geographical domain name such as a city. One factor that certainly matters is the population of the city. All else being equal (and it rarely is) a city of 100,000 people is better than a city of 10,000 people.
I often see people selling geo domains and advertising that there are multiple cities of the same name. A name like Springfield.com, for example, could refer to many U.S. cities. But you should be careful about valuing a domain based on the total population of these cities.
Consider this example. There are 2 Bastrop cities in the U.S. in Wikipedia. These cities have populations of 13,000 (Louisiana) and about 10,000 (Texas). If you plan to develop Bastrop.com into a directory for either city, it would be foolish to value the domains be adding up both populations (23,000). After all, you can only address one of these cities with your web site.
Of course this assumes you plan to develop the domain. From a resale perspective, the fact that there are two cities with this name increases your odds of a sale. However, you can still expect the person buying the domain from you to look at one city or the other, limiting the total addressable population to 13,000.
Elliot says
I think population is very important, but there is much more to it than that. Here are a few things I consider when looking to acquire a city .com domain name:
– Population
– Tourist Destination
– Property Values (trends)
– Number of Hotels
– Business Center/Convention Host
– Airport
– Unemployment
– Public Transportation
– Large Newspapers
– Proximity to Me
– Interesting City History
– Alternate spellings (Ft/Fort or St/Saint)
– Difficult to get ranked (other very established websites holding top rankings)
Many things are based on gut feel and instinct. Cities names are well known by residents and travelers, and you know exactly what you would want to expect when you visit a city .com website.
Umair says
i have a city domain name and its the capital of a state.. the population is over 1 million. from tourist point of view every year 1 million plus visitors flow throug it as it is called gateway to heaven. now my question is what is its worth and what can i do with it??
Shane says
It’s worth looking at, too, what the expected population growth of the area is. In an extreme example, this Time article notes that the population of Miami-Dade County has skyrocketed 1,600% from 150,00 in the 1930s to 2,400,000 now. Obviously we don’t have that long a time horizon, but look at an area like Phoenix where population has grown 50% over the past decade.
If geo domain values are based in large part of the size of the geography they represent, fast-growing areas should have a scalar applied that makes them proportionally more valuable.
Andrew says
Absolute agreement, and thanks for sharing your metrics.
I’m developing Lakeway.com, which only has about 10k people right now. But that’s expected to double in the next 5-8 years and the typical new house in the area is $500k plus. It doesn’t have many hotels, but lots of new stores. It doesn’t hurt that it’s on the lake too.
I think one of the key things Elliot mentioned is “proximity to me”. It sure helps to know people in the community and be nearby.
Rob Sequin says
All great points but Andrew you actually can develop one domain for two or more cities. Might not make the best home page but put up a split screen, click on the right side for Bastrop LA and on the left for Bastro TX.
How about that?
Also, you are right about MAXIMUM population. Consider Provincetown MA and Key West. Both are small towns but get HUGE volumes of summer visitors and tourists.
Also, these tourists research and book their destination before they arrive so I would much rather have a KeyWest.com than a Detroit.com and I would imagine KeyWest.com would sell for multiples more than Detroit.com.
ty says
I’d take Detroit over keywest.com anytime,no comparison!!
Jamie says
I am kind of stuck with the same situations with one of my domains (Swanton.com). Both are villiages/towns, but one is in Ohio and the other is in Vermont. To top it off, Swanton is also a sur name. 95 domain, but I have been tossing around what to do with it..
David J Castello says
Excellent article, Andrew, but your methodology needs to better account for brand recognition and visitor popularity over static population.
Two of our highest grossing city sites are LagunaBeach.com (population 26,000) and PalmSprings.com (population 47,000).
I assure that both generate more revenue than Philadelphia.com (population 1,500,000) and Dallas.com (population 1,200,000).
Pete Kosednar says
Snapnames has a bunch of Arizona geo domains with no bid that you have to order by today –
pageaz.com
pinetopaz.com
showlowaz.com
shumwayaz.com
snowflakeaz.com
williamsaz.com
winslowaz.com
Robert Haastrup-Timmi says
The official figure for the total number of annual visitors to Leicester Square in london is 22 million a year. I own LeicesterSquare.com. Westminister council’s site say leicester square is probably one of the most visited geo locations in the world. A good comparison would be Times Square in New York anyone who visits london always ends up at Leicester Square and real estate prices are on average £500k upwards for a basic flat and millions for commercial property. So how does one put a value to this is domain my question?
Most people are shocked when I tell them I own this domain, but I’d like to know how you guys put a $$ value on geo domains.
Cheers!
David J Castello says
Robert:
Are you getting at least 1,000 uniques a day with at least 30% direct navigation?
If you can say Yes you have a seriously desirable and easily monetizable Geo.
David
Robert Haastrup-Timmi says
Hi David
Hope you and Michael are very well! Actually I am only now in the process od developing the site into a hybrid of directory, social network and video. I’m going to be using edirectory.com software recommended by one of Andrew’s blog. The edirectory has several cool apps and then I’m goint to use ning.com to develop the social network and video apps.
Right now, undeveloped it gets little direct navigation traffic, certainly not 1000 uniques a day, more like 50 to 100 uniques. However once developed I should easily be able to exploit over 150,000 monthly google searches with a PR of 1 to 3 hopefully.
Thanks for your heads up David…keep well!
David J Castello says
Robert:
Sounds like a great plan. Remember that direct navigation has the most influence on the potential value of a Geo because the public is “voting” that you own the brand.
David
Robert Haastrup-Timmi says
That’s an interesting perspective David! I’ll certainly bear that in mind going forward.
Cheers!
M. Menius says
@ Rob Sequin – Rob, no doubt Key West has great travel appeal, but to assume it would bring multiples of Detroit is wrong. The audience for a massive city is available and ready to be tapped & monetized … given that the site is properly developed. Detroit has varied industries, 4 professional sports teams, and draws international visitors as well. Trying to do a direct A – B comparison between Key West and Detroit is more apples and oranges than you think. However, I do get your point about the power of travel appeal. That’s a big draw positive for .com. And also for .US city domains too. And .info.
Mick McGee says
Great topic and good comments.
Basically its all about revenue. ‘If you build it they will come’ The GEODOMAIN needs a revenue model. How many commercial and retail businesses in the area? Is it a destination for tourists or to serve the local community?
Sure the geodomain may have a large residential population but what is the commercial occupancy of the area/city.
Remembering the 80/20 rule where 80 percent of business is local and the other 20 percent is external, businesses should be easily convinced to have exposure on a ‘city’ web-site. Do the 80 percent want to increase the 20% end of their business at little to no extra cost? The Internet provides perfectly for this.
As a real estate agent I have held the opinion that a city site should be worth at least the minimum real property cost of a single property the area. If that’s $300K then it should be worth at least that. Let me explain why i think this.
An investment into that $300,000 property would normally require a mortgage, have upkeep, rates, insurances, agents fees, solicitor fees etc. and in the end if you are not negative gearing then you would be earning little revenue coming through and relying on Capital Gain only.
The return on the real property would be lets say $300 per week. If purchased for cash, without a mortgage, and forgetting about the other outgoings, $300 per week would return $15,600 per year.
Not bad, but, if you consider that businesses are willing to outlay $200 to $800 to be on a ‘Local’ website. We charge $300 for the year and have hundreds of paid advertisers. So even if the website attracts just 1 business listing per day to advertise on the website, that’s $78,000 per year conservatively.
So $300,000 real property returning $15,600 per year V’s virtual property returning $78,000. So, whats a City site worth? Is it then worth the $300,000? What about Capital Gain? Of course! Rent, lease or sell the GEO domain in part or in full.
And yes i agree with Rob Sequin. I have a number of geodomains that have exact city/suburb names else where in the world. A simple front page with a choice of destination, map or whatever, would cover a lot of sin and is an avenue i will be using for some of my names. Lets hope the 2nd landing page has a good PR relevance and performs.
Finally, I will leave you with this thought. A GEO-DOMAIN without population but is a house hold name around the world, easily remembered. Considering all of this, how do you appraise TheBermudaTriangle.com. Apart from standard monetizing of the name how do you determine its value outside direct navigation.
Thanks for taking the time to read my thoughts.
Robert Haastrup-Timmi says
Mike! If you don’t mind me saying, I have to disagree with the metrics you have used to value a geo-domain or any domain for that matter. Let me explain why I think all these prior BR(Before Rick) valuation models are fundamentally flawed.
Fair enough, when after market domaining started, we naturally had to use some measure to value domains and to be fair, natural-type in traffic is what a lot of domainers seem to have been using, because in a growing industry that is still highly fragmented, people will only use what they know best.
Ok, I’m coining a new phase of domain valuation called AR(After Rick) pricing metaphorically, after Rick Schwartz’s dramatic sale of RoomDividers.com. Apart from the fact that Rick has been very vocal about how domains are mis-valued for a long time, the following proposal is a very open and transparent way of valuing any domain name: lets use Palmsprings.com for instance, a great geo domain name for example.
So what is the theoretical “Domain Book Value”? I want you to imagine google is now a formidable aftermarket domain seller and uses all its stat tools to provide domain evaluation to business end users. If that were ever to happen, no one could ever compete with it. So what would google potentially use to evaluate Palmsprings.com as an aftermarket geo domain?
Google would use it’s keyword tool which every online business universally understands, which is what makes them a $500 Billion cap company. So right now, google keywords tool, shows that palm springs as an organic keyword has 2,240,000 monthly searches or queries from real people.
The average ppc that google is showing for palm springs today is $0.38 per click! As a top SEO specialist “Mark Jackson” pointed out on Andrews blog just 2 days ago, take 10% of 2,240,000 multiplied by $0.38 to get an estimate of how much advertising expenditure would be incurred on that keyword by an advertiser. That will cost you $91,200 a month. Now multiply that by a annual multiple of 3 to 5 years = $3,283,200 to $5,472,000 . This is what I call Domain Book Value! by the way, watch out for domainbookvalue.com in the near future.
What is the point of this way of valuation?? ..anyone anywhere can extrapolate these common sense figures. Its not hideous like ambiguous appraisal services or estibot.com for instance. It makes perfect sense to any buyer, and the domainer should be laughing all the way to the bank!!
Let me give you guys a tip. Recently, Ron Jackson of DNJournal mentioned that Kevin Ham and Dr Chris Harnett were embarking on some savvy business program at Harvard re the domain industry i think. I’d like to think people like that will come up with universal metrics as proposed above, that serve this industry and everyone anywhere. We need transparency desperately to sell directly to end business users. Give them the facts and they will buy! That is why they buy keywords on Google afterall! why go against the grain?
From my Investment Banking background, we need empirical figures to justify investing in stocks, and I firmly believe google now provides everything we all need to value a domain openly and transparently. This is why Mark Johnson, the SEO specialist, published this method mentioned right here on Andrews Blog only 2 days ago, because he could easily cross sell the intrinsic benefit to his end user client.
Now Mike, as you can see, if we use any of the metrics you suggested, they are fundamentally flawed, because there simply is no transparency to scale! plus you actually grossly undervalue your very own domain assets. With what I have suggested here, the domain can now sell at a discount or premium to book value depending on several other factors!
As for PalmSprings.com, I’ll let the wonderful Castello brothers decide its ultimate value!
Robert Haastrup-Timmi says
Kindly excuse my error in this post; I meant DomainBookValues.com for future reference.
Cheers!
Mick McGee says
Thanks for your comments Robert
Obviously my comments are based upon a real estate perspective and give what I believe to be one method of appraisal.
Many businesses in Australia are still yet to have a website. My research shows about 30% are looking for exposure online without having to commit to a full blown website, happy to be found on Google via local portals and community websites. The comparison i made earlier was a minimum appraisal based on revenue and I agree that its not perfect but simply a way to justify the higher asking prices for geo-domains. Most Real Estate appraisals are based upon comparative analysis and historical data. This is where Virtual and Real differ.
I would like to absorb your appraisal strategy and apply it to some of my domains.
I must say being a domainer involved in GEODOMAINS in Australia is a bit like living in a cave since the uptake of registering domains here in Australia was years later than the rest of the world. Fortunately in 1999 i secured a number of geodomains that were available at the time, most of the quality names were grabbed by individuals from overseas years earlier. I simply mopped up. The reason I say this is i feel somewhat like Robinson Crusoe here in Australia in relation to .com geodomains and it is refreshing to be able to communicate with other Domainers like yourself through these channels.
Once again thanks for your feedback, I will now start crunching some numbers based on your theory.
J.R. Jackson says
I enjoy reading this blog and this post has been one of the best I have seen.
I have a few geo domains and was wondering if someone could give me an idea of what they are worth and where the best place to sell them would be if I decided to sell instead of developing them.
OttawaValleySingles.com
ButteClassifieds.com
SLCUtah.org
OremUtah.info
WestJordanUtah.info
WestValleyCityUtah.info
LaytonUtah.info
Thanks in advance,
J.R.
Liz says
City domains is a good strategy, at least for the future.
jai says
i think still many country domains are avilable in some TLDs
Abe says
What about .me geo domain names? Any potential there??
I also have some Chinese cities..
BTW- does one word typo errors have any value these days?
Andrew says
Abe – personally not a huge fan of .me, but some of the city.me domains are selling for reasonable prices and could be branded well.
As for one word typos, as long as it’s not of a trademark they’re OK…but keep in mind the value is only in the PPC revenue.
Mickie Kennedy says
I think there are many variables here. Population is not the only indicator for domain valuation, as I would also argue that domain traffic is not the best indicator of a great domain (all traffic and all populations are not the same). A city in Michigan where the economy is depressed isn’t worth as much as a comparably-sized city that is a travel destination. I think there are lots of geo opportunities for domainers and developers — but there is no magic valuation formula.
Tom Grisak says
All very interesting points. I own a domain name I am thinking of selling … allentexas.com This is a high profile suburb of Dallas with about 78,000 people. Also home to one of the largest high schools in the state and the 2008 state, 5A football champions. I am just starting to do some research on what city domain names are on the auction blocks for, but I cannot find any. Can anyone help me with an opinion of value? Thank you in advance.
citeevents says
i have bought hell lot of city names but in new gtlds…. i.e. washingtondc.website, brampton.website, edmonton.website, longbeach.website,mexicocity.website, panamacity.website, riodejaneiro.website, santiago.website, brussels.website, pretoria.website, christchurch.website, baku.website, kualalumpur.website, macau.country, hyderabad.website,bengaluru.website, ahmedabad.website and developed 50% of them in just 3 months… looking forward to place google ads. as this is my first time with domaining i feel little perplexed dont know how it will go.