Last week Dictionary.com (bundled with 2 other sites) sold for $100 Million. This week Business.com sold for $380 Million. Both of these were built on “premium” domain names that helped them grow in ways they couldn’t have without all the type-in traffic. Frank Schilling and Rick Schwartz (2 superstar domainers) came out of hibernation recently. There’s no doubt about it, domaining is getting hot right now.

I’ve been trying to find a photo-related domain name all week. It seems everything halfway decent is taken. I wouldn’t even mind buying a domain name as long as the price was reasonable. Heck, I might even pay in the thousands for an old site with existing traffic and backlinks.

Over the past few months I’ve come to accept that domains are a lot like real estate and people shouldn’t get mad that “everything is already taken” – they should have invested when the prices were low. (It took me a little while to come around to that point of view). What does annoy me is that a lot of domain owners don’t understand that the difference between business.com and howtobusiness.com is a friggin ocean. I inquired about a few domain names that were “ok” and I would have paid a few hundred dollars for, but the owners wanted $50K!

I buy into the value of type-in domains. If you have insurance.com, you’re sitting on a goldmine, even if you don’t have a site developed. What I find annoying is that a lot of people don’t seem to understand the difference between a truly “premium” domain and one that just contains a few words, or even a made-up set of words that will never in its life get more than a handful type-ins or be remembered in passing UNLESS someone develops a site or creates a brand around it. But in that case, the value is not in the domain name – it’s in all the work that goes into developing a brand.

The entire domain market seems really squirrelly to me. Valuations are so all over the board and there’s little consensus over real methods for determining value. The market is so speculative it makes SEO valuation seem like it’s indexed to the Fed.

There’s this pervasive assumption that just because so many brands have been built on short, catchy, or half-pronounceable domain names – flickr.com, popsugar.com, mybloglog.com, etc. – that somehow any semi-clever domain name has some intrinsic five or six figure value.

The problem is there are millions of these domains stuck in that never never land of mediocrity, and while many of them are registered, their value is not all that high, just due to massive supply. Combine that with a poor and fragmented domain aftermarket, and the whole process of obtaining a preregistered domain becomes a royal pain in my ass.

/End of Rant