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How to improve GoDaddy appraisals

by — Domain Registrars 4 Comments

Picture of a GoDaddy appraisal for the domain Improve.com showing a valuation of greater than 25,000

There was some debate on twitter this weekend about GoDaddy domain appraisals. This debate will never end but I have some suggestions for GoDaddy to improve its tool.

1. Change the language for domains greater than $25,000

Automated appraisals break down when domains are very valuable. GoDaddy displays the message “more than $25,000” for domains that are worth more than $25,000. People seem to focus on the $25,000 number anyway and complain about the value being “only $25,000”.

GoDaddy should consider changing this language to say something like “HIGH Value: this domain is a high value domain, and our systems aren’t currently able to appraise…” or something like that.

2. Change the threshold for high value domains

Based on what I’ve seen, domains that value for more than $10k might well fall into the $25k plus category. So it probably makes sense to apply this HIGH label to domains valued at over $10k or so.

3. Remove new TLD valuations

GoDaddy seems to have improved valuations of new TLDs but there’s still not enough data to back up the values. I’d remove any TLD for which there aren’t enough comps. Valuations shouldn’t be based on a percentage of value of another TLD.

4. Add a time-factor

A legitimate criticism is that you can plug valuable keywords into the appraisal system and get valuations over $1,000 even if the domain isn’t registered. I just entered MortgageCorn.com and the valuation tool says it’s worth $1,377. MortgageSeltzer.com appraises for slightly less.

One way to prevent this from happening is by adding a time factor into valuations of domains registered for less than one year. So domains registered less than one month appraise at registration fee, and then values slowly creep up over time.

I know it’s just a hack, but it will solve the problem.

GoDaddy makes bulk domain appraisal tool available to NamesCon attendees

by — Domain Registrars 8 Comments

Conference attendees can get unique token to unlock bulk appraisal tool.

GoDaddy’s bulk appraisal tool summarizes the domain names that were appraised.

GoDaddy is opening up its domain name appraisal tool–both in volume and level of detail–to NamesCon attendees.

A token is necessary to access the tool that can be used to appraise up to 100,000 domain names. Tokens will be in NamesCon attendee swag bags as well as at the GoDaddy booth.

In addition to getting access to bulk functionality, the tools provides more data than GoDaddy’s standard online appraisal tool:

  • GoValue – This is the value that you currently get from the online tool. It’s the estimated sales value.
  • Wholesale value – What Godaddy estimates the domain would sell for in an expired domain auction.
  • List price – This is how much domain investors would typically list the domain for. This will be higher than the GoValue.
  • Sales probability $500 – The likelihood that the domain will sell within a year if priced at $500. This is expressed as a percentage.
  • Sales probability at GoValue – The likelihood that the domain will sell within a year if priced at the GoValue. With typically portfolio turnover in the 1%-2% range, you can expect most domains to have low values.
  • Sales probability at wholesale – The likelihood that the domain will sell within a year if priced at the wholesale value

This data can be extremely valuable. Many people haven’t agreed with GoDaddy’s GoValues. Adding the additional valuation metrics helps make sense of the data.

In particular, seeing the sales probability gives a level of confidence about demand for the domain name.

I tested the tool out today and got some good insight from it. There are some limitations, however.

Some of the values are capped. This was an issue mostly for the wholesale value, which frequently showed $1,000 because that’s the limit it will show (meaning the domain is worth $1,000 or more at wholesale). At the same time, I found many of the wholesale values to be much lower than what the domains sold for just recently on GoDaddy Auctions.

Also, GoDaddy’s appraisals for new top level domain names seem to be very high. There’s not much data to go off of, which makes it more difficult to create an automated valuation for them.

Still, nitpicking individual values misses the point of how you should use automated appraisals.

The system also generates a portfolio summary graphic, which you can see above.

The tool will only be available until February 27.

How to use automated domain appraisals

by — Services 22 Comments

Automated domain appraisals aren’t perfect but smart domainers can use them to their advantage.

I wouldn’t sell SoftwareCareers.com for this price but the appraisal is still helpful.

GoDaddy released its automated domain name appraisal system to the public last week, and quite a few domainers disagreed with the values it provides.

Valuing domain names is very difficult, especially with automated tools. Domain names are unique assets. The sales price of a domain name has a lot to do with how much money the buyer has and how much the seller is willing to hold out for.

[clickToTweet tweet=”Automated domain appraisals provide immense value to domain investors…you just need to know how to use them.” quote=”Automated domain appraisals provide immense value to domain investors…you just need to know how to use them.”]

Still, automated appraisals provide immense value to domain name investors. You just need to know how to use them properly. If you dismiss tools like GoDaddy’s and Estibot’s out-of-hand, I think you’re leaving some great data (as well as profits) on the table. Here’s how I recommend using automated appraisals: Click to continue reading..

GoDaddy will display new valuations on GoDaddy Auctions

by — Expired Domains 9 Comments

What’s that expired domain name worth? GoDaddy has a good idea…and is about to let domain name investors know.

GoDaddy (NASDAQ: GDDY) is rolling out its new valuation system to a much wider audience: bidders on expired domain auctions at GoDaddy Auctions.

The company started using the valuation tool internally and in auction highlight emails to customers late last year. Starting within the next day, the valuations will be displayed next to all expiring domains. This is the first “public” use of the new system.

GoDaddy already shows valuations next to some of the expired domain inventory, but this is based on an outdated and poor valuation methodology.

GoDaddy’s new valuation system creates a wholesale valuation, predicted sales price and predicted list price. The auction data will include sales price valuation, which is essentially GoDaddy’s prediction of how much the domain name will sell for to an end user.

Domain names with valuations under $1,000 will be denoted as merely < $1,000. Valuations over $25,000 will be denoted as > $25,000.

The valuations are based on reams of actual sales data and machine learning. Bidders should keep in mind that these are anticipated end user sales prices, so they need to leave some margin for reselling the domain.

It will be interesting to see how the domain community responds to the added data. While it can be helpful, some people who use algorithmic methods to identify domain names might be frustrated when others identify hidden gems with the new GoDaddy data.

GoDaddy gets two patents for domain appraisal

by — Domain Registrars 21 Comments

Paul Nicks’ inventions related to name spinning and appraisals get patent protection.

The United States Patent and Trademark Office today issued two patents to GoDaddy related to name spinning and appraisal.

U.S. Patent number 8,447,701 is titled “Appraising domain names using comparative data” and 8,447,702 (pdf) is “Domain appraisal algorithm”.

The patents have lots of overlapping material. They cover name spinning to create permutations of domain names as well as multiple aspects of automatically generating a domain name appraisal.

Here’s a summary of some of the aspects of domain valuation that the patent describes:

The appraisal may be accomplished by breaking the valuation of the domain into five logical groupings, possibly including evaluation of “5 P’s” related to the domain name. Evaluation of “precision” may include the number of distinct keywords found, the length of the name and the number of keywords found in the dictionary. Evaluation of “popularity” may include various search engine search result metrics and tracking of words searched per month. Evaluation of “presence” may include the age of the domain, and the rank of the web site according to web ranking services or software. Evaluation of “pattern” may include the number of premium characters, the part of speech (such as noun, plural noun, verb, adjective, etc., possibly considering if the domain is a one word domain), the relationship of vowels and consonants etc. (possibly considering if the domain is a 4-5 character word). Evaluation of Pay-Per-Click, or PPC, may include the maximum number of pay-per-click bids from various advertising tracking services or software, and the number of ads returned within search engine searches. A dynamic multiplier based on registration statistics for each of several top level domains (TLDs) may then be applied to the domain evaluation. This multiplier may be used to give a very accurate measure of domain scarcity to let a user or evaluator know how rare a domain name is.

Paul Nicks, Director of Product Development GoDaddy.com’s Aftermarket, is listed as inventor on both patents.