In an earlier post I analyzed how effectively GoDaddy automated GoValue system estimated the worth of NNNNN.com domain names. This time I looked at the same question, but for a set of CO extension domain names that sold in the summer 2018 Sedo premium CO domain auction. The Data
When the auction results were announced at the beginning of August 2018 I immediately checked the GoValue estimates for each CO domain that sold in the auction. This is important to reduce chance of GoValue estimates were adjusted in response to the sales.
What I found is in the table (click on table for a higher resolution view). For each domain name sold I give the domain name, the actual auction sales price, and the GoDaddy GoValue estimate of worth. I also compute for each the ratio of the two values – for example if the domain had a GoValue estimate of $16,000 while it sold for $8000 the ratio would be 2.
Analysis
The individual values are plotted in the graph. I did regressions comparing sales prices with automated worth estimates. I tried various functional forms (linear, polynomial, logarithmic, exponential) for the regression, with exponential providing the best fit to the data. The correlation is moderately good, with R2=0.50. An R2 value of 1.00 means perfectly correlated data, while 0.00 would mean no correlation at all.
If desired, this graph could be used to predict likely actual sales prices from automated estimates of worth. For example, if the GoValue estimate of worth of a CO domain name is $10,000, the likely sales price is approximately $4,500.
If we look at individual values, GoValue did correctly predict the lowest price domain name (formulas). On the upper end, GoValue did not do as well, predicting that the names debt, card and holiday would fetch the highest sales prices. In terms of actual sales prices Vegas, hire and weather had the highest values. In a bit less than half the cases the predicted and actual sales prices are within a factor of two of each other.
Conclusions
It might be expected that CO domain names are, after COM and NET, among the easiest to predict as there is a fair volume of sales data history. However, it could be argued that single word domain names are more challenging to predict than numbered domain names.
While the average worth estimates from GoValue are inflated when compared to actual sales prices for these CO domain names, there is moderate success in predicting which domain names are more valuable. If we compare this analysis to the earlier one on NNNNN.com domain names, that study found that average prices for the set were almost spot on, but the regression for which names are more valuable is weak. Auctions sometimes produce surprises, as two bidders can drive up the price in some cases beyond likely market levels. I suspect many domain investors would have predicted that debt and card would have sold for more than weather, in line with the GoValue prediction, even though the sales price turned out to be higher for weather in the actual auction. A geographic name like Vegas is also challenging to predict.
Overall GoValue provides order of magnitude worth estimates, and some indication of relative worth. It should not be your only source of information on a domain name worth, but is somewhat helpful as one of the measures, at least for CO extension domain names.
Users of the information in this post should keep in mind that it is for a limited dataset and for promoted auction sales at a single venue, Sedo.
Links:
- Sedo CO Auction Results (via Domain Investing)
- NameBio database
- GoValue
- Analysis of NNNNN.com domain estimates
- Our site NamesThat.win - thanks for visiting
- Permanent link to this blog post
Original post Sept 11, 2018.
Disclosure: I currently hold a number of CO domain names, but none that were in this auction. I am not associated with NameBio, but would like to acknowledge their incredible database and their generosity to make it available to the domain community. I have no association with GoDaddy or the GoValue automated estimate of worth tool, except as a user.
Fine Print
Disclosure: I currently hold a number of CO domain names, but none that were in this auction. I am not associated with NameBio, but would like to acknowledge their incredible database and their generosity to make it available to the domain community. I have no association with GoDaddy or the GoValue automated estimate of worth tool, except as a user.
Fine Print
This post is offered for informational and educational purposes only, and should not be considered domain name investment advice. While an attempt has been made to be accurate, there is no implied or explicit warranty, and you are responsible for verifying any information of importance to you. You also accept full responsibility for any domain investing decisions you may make that use data from this post.
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