GoValue Accuracy for CO Domain Names

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

Sedo had a summer 2018 auction for premium .CO domain names. This provided a dataset that all sold at the same  time and venue, and the auction format contributes to each domain sale being reflective of true worth.

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

At the bottom of the table are the average and standard deviation of each column. For this dataset the sales price averaged $3475 while the average of GoValue estimates of worth is $8221  Therefore, GoValue, for these domains, suggested higher valuations than the actual sales prices by about a factor of 2.4.

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

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.

I try to be fair, balanced and objective in my analysis.  If you feel this post does not meet that standard, please express your concerns to me.  

In a very few cases there may be affiliate links on this blog. This means I receive a small amount if users visit or make purchases via the link. You do not pay any additional charge due to using an affiliate link, and in some cases your cost will be below the normal price. I receive no identifying information about who clicks, or does not click, any link. I never accept compensation to provide favourable review of any particular service or product.

The text of this posting is ©R Hawkes, all rights reserved. However, you may, without permission, use reasonable length portions of the post as long as a link to this post is also provided. If you wish to use the complete contents of a post, please request permission. I am normally open to reprinting, but will consider each request individually. 

The images used are either those associated with a product or service, my own images, or Pixabay images believed to be available for use without attribution. If you see any image that you believe is problematic, please let us know and we will immediately correct the situation.

Domain Descriptions: Pro and Con

Imagine for a moment that you wander into a new car dealership.  You look around and see several cars that appeal to you.  Do you want to know more than simply the price of these cars?  For example, are specifications, fuel efficiency, resale value, warranty, etc. of any interest?  Most of the time car dealers are only too happy to place glossy brochures in your hands that will both help associate the model with positive emotional feelings and also answer questions that might arise when comparing the vehicle to those offered by competitors.  In the domain world, the majority of sellers do not do a corresponding thing, rather taking the view that good domains sell themselves.  I look at arguments on both sides of the question of whether you should include a description with your domain listing.

Pro Arguments

First, let's make an argument in favour of including descriptive information.

1. You have obviously thought and researched the domain name, and it is good to share some of this background to help inform and persuade the prospective buyer.
2. You may provide ideas regarding use of the domain name that the potential purchaser would not have considered. This may help turn those browsers into purchasers.
3. As a convenience to the potential buyer you provide key information (such as registration period and renewal cost) in one place.
4. It may be an opportunity to counter potential negatives with respect to your domain name (e.g. it is a plural, but in this case the plural is the more frequently used form).
5. An attractive presentation may engage and encourage people to spend more time browsing your domain names, and some will become purchasers.
6. It shows that you see value in the domain name, since it is worth the time to provide a detailed presentation.

Con Arguments

I believe the majority of domain investors generally are not in favour of including descriptive material.  The thinking might be summarized as follow.

1. A good domain name speaks for itself. If you explain the virtues of the name, it is saying you don't really have confidence that it is truly a great name.
2. Any serious potential buyer will do her/his own background on the domain name, so there is no need for you to provide the information.
3. If you outline how the name might be used, and that is not consistent with the ideas that the prospective buyer has, that may limit how they view the name.
4. If you include a balanced view of the domain, it might bring up negative aspects that the purchaser had not considered, and their view of the domain name will go down.
5. By including  some items (like automated appraisal values or advertiser data) it may turn off some potential purchasers that place no importance on such measures.
6. I have a huge portfolio.  I don't have the time to put into a detailed description for each domain name. 
7. I prefer the standard description provided, for example by Efty, since that has been researched and is better than anything I would write. 

One More Advantage

There is one more advantage in providing a description. I show below a screen capture (click on image to see higher resolution view) of a domain search from my Efty Marketplace.  I searched on the word CRISPR (a gene editing acronym important in health and agriculture fields).  If I did not have any descriptive content, then it would only have yielded my domains that included the acronym CRISPR.  However, with descriptions Efty the search engine includes all domains with the term in the title or the description.  Therefore domain names like editDNA.co and medit.life appear.

This is an important advantage of descriptions, and you should write them accordingly, making sure that any keywords are included somehow in your descriptions. 

What to Include

I think there are strong arguments against descriptions, as well as a convincing case for including them.  If you do decide to include descriptions, what might you include. Note that not all of these are applicable to all domain names, and depending on your potential audience some of them are perhaps unwise to include.  Nevertheless, here is a list of ideas you might consider.

• Possible uses for the domain name.
• If an acronym, some of the possible meanings.
• Advantages (e.g. short, memorable, trending term, etc.).
• Prior sales of similar words.
• Period of current registration (particularly if already registered for extended period).
• Automated estimates of worth, including commentary if necessary
• Multiple language suitability if relevant.
• Search and advertiser statistics for the domain name.
• Commentary on the TLD extension.
• Renewal cost.
• Age of domain.
• History in actual website use, if any, including backlinks information.
• Possibly other related domain names (in case the potential purchaser does not quite like this one, but would be interested in one of those).

Discussion

There is no single correct answer regarding this question.  Personally. I usually do include descriptions, but at the same time I understand why many others choose not to do so.  As with most aspects of domaining, you should decide for yourself what works for you and you feel comfortable with. However,  I would urge you to be informed on both sides of the argument, prior to making the choice.

I also would stress that this is not necessarily an all or nothing issue.  It may make sense to include descriptions with some domain names or venues, and not others, and if you do include descriptions what to include in them depends on the domain name.

If you do decide on the description route, there are some practical points to make the task easier.  The main one is to keep all of your descriptions in a text file in some organized (e.g., alphabetical) form so you can easily copy and paste when you list the name on a new marketplace.  While I see advantages to the Efty approach of using a very short description along with additional bullet points, it is certainly easier to deal with the single text field of Undeveloped  and other sites that allows a longer description.

One final point: always be honest and fair in your description.  It is probably unwise to list a single high NameBio database comparator if multiple closer comparators are much lower in value. One difficulty of including automated appraisal information from GoValue is that these may change fairly dramatically from month to month in some cases.  Therefore, you might want to include a disclaimer alerting the reader to that.  Fortunately, it is easy for them to check this information without cost to them. Most of the time we only deal with any particular client in a single sale, but treat each as though you were building a long term relationship based on openness and honesty.

Even if you do decide on a comprehensive description, also be alert to the value of concise writing.  Try to keep it informative and engaging, while also short!  I look forward to reading your domain descriptions, or not!

Original post Aug 28, 2018.


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.

I try to be fair, balanced and objective in my analysis.  If you feel this post does not meet that standard, please express your concerns to me.  

In a very few cases there may be affiliate links on my blog. This means I receive a small amount if users visit or make purchases via the link. You do not pay any additional charge due to using an affiliate link, and in some cases your cost will be below the normal price. I receive no identifying information about who clicks, or does not click, any link. I never accept compensation to provide favourable review of any particular service or product.

The text of this posting is ©R Hawkes, all rights reserved. However, you may, without permission, use reasonable length portions of the post as long as a link to this post is also provided. If you wish to use the complete contents of a post, please request permission. I am normally open to reprinting, but will consider each request individually. 

The images used are either those associated with a product or service, my own images, or Pixabay images believed to be available for use without attribution. If you see any image that you believe is problematic, please let us know and we will immediately correct the situation.

NNNNN Domain Names

While it is challenging  to estimate the worth of many domain name types, short numbered domains are somewhat easier to predict.  In the NameBio report for August 11, 2018 there were 30 sales of NNNNN (five number) domain names.  With a common day and sales venue (NameJet), this offered an opportunity to study a homogeneous dataset.  In this report I look at the sales prices, and place them within a historical context. I also see how effective  GoDaddy GoValue is in predicting sales prices for NNNNN.com domain names.

Recent Sales

With so many NNNNN sales in a single NameBio daily report, I decided to take a closer look at the prices paid.  There were 30 sales of NNNNN domain names in this daily report, ranging in price from $490 to $1500, with an average price of $654.  The majority of sales were at $500, and that was also the median price. You can see just the list of just the  5 number  domain names from that day at this link.

Several numbered domains did go for prices significantly higher than the average on this day.  The two that went for the highest price ($1500), both contain the sequence 23 and also the number 7.  Many people and cultural traditions find the number 7 to be magical or lucky, although in Chinese culture it is also treated with suspicion.  It is easy to see why the lowest priced domain went for a bit less - it starts with a 0 which is generally less desired both aesthetically and because of possible confusion with letter O.

I do not have the expertise to comment in detail on coded messages in certain numbers.  This fascinating article on Chinese messages in numbered domains will help you understand that phenomena.

Historical Valuations

We thought it would be interesting to take a  brief look at how prices for these recent sales of five number domain names compare to prices for similar digital assets in the past.  The average prices paid for NNNNN.com domain names is given below.  The information has been obtained from the NameBio database.

• 2018 YTD  $952 (range  $151 to $22,383, with 2232 sales)
• 2017 $959 (range $134 to $25,500, with 2454 sales)
• 2016 $1098 (range $100 to $34,501, with 2460 sales)
• last 5 years $1056 (range $100 to $245,000, with average 2274 sales per year)
• all time $1051 (9343 sales)

The clear picture is that several thousand NNNNN domain names sell each year (at least as listed on NameBio, there are undoubtedly many more that sell on Chinese venues not reported to NameBio) with the average price in the range from  $900 to $1100.  Within this context the recent  sales are on the low side, but the average prices in the historical data are heavily influenced by sales of highly desired sequences. There is some suggestion in the historical data that the average price of NNNNN domain  names is decreasing slightly, probably a reflection from the general  cooling in the Chinese domain name market.

All Time Top NNNNN Sales

Let's take a  look at the highest sales of all time for NameBio recorded NNNNN.com domain names.  You can find the full  list at this link. 

1. 88888  sold at Uniregistry for $245,000 in Dec 2013
2. 17176 sold at Uniregistry for $55,000 in Feb 2015
3. 10023 sold privately for $50,000 in Feb 2015
4. 83333 sold at Uniregistry for $43,000 in Aug 2015
5. 70777 sold at NameJet for $34,501 in Jan 2016
6. 88808 sold  at Uniregistry for $30,000 in Aug 2015
7. 77787 sold at SnapNames for $26,055 in Oct 2015
8. 79000 sold at GoDaddy for $25,500 in May 2017
9. 55588 sold at DropCatch for $25,050 in Mar 2016
10. 97088 sold  at NameJet for $22,500 in Feb  2016

While the largest sale was in 2013, the peak in numbers of high value NNNNN sales was in 2015. While 4 of the high sales include at least 88 (a lucky number in China), and the highest sale all 8's, various other combinations occur in the leading sales.  A number of  different venues have accounted for the sales, with Uniregistry leading, particularly in the early years.

GoValue Estimates of Worth

Since these are liquid assets, frequently traded, and  somewhat homogeneous (although with preferences for certain numbers and sequences), they should be easier to predict prices for than say multiple word (or even single word) domain names.  I had a look at GoDaddy GoValue estimates of worth for each of the domain names sold yesterday (with older sales it i difficult to be sure that the sale value did not alter the estimated worth).

What I found is in the table on the right (click on the table for a higher resolution view).  For each domain name sold (all on same day and venue) I give the name, the GoDaddy GoValue estimate of worth, and the sales price recorded.  I also compute for each the ratio of the two values – e.g. if a domain name sold  for $1400 and GoValue estimated its worth at $700 the ratio would be 2.

If you go to the bottom of the table, I compute the average and standard deviation for each column.  You can see that there is no evidence of bias, with the average prices in the GoValue estimates of worth and the sales values almost identical at $648 and $654.  This implies that the domain names recently sold did in fact trade at about the correct value.

If we look at individual values, most are at ratios of 0.50 to 1.50 indicating to me that the worths of NNNNN can  be estimated moderately precisely by automated means (although see next paragraph).  Many sales were within 20% of  their estimates of worth.  However, there are exceptions. For example GoValue predicted that 47601 was only worth $167 (it sold at the median price of $500), and the name 23757 that tied for the highest price ($1500) was only projected to have a worth of $700 by GoValue.

If I plot these data,  I obtain the result shown at the top of this blog post. There is only a weak correlation between the GoValue estimate of worth and the actual sales price.  As background an R2 value of 1.00 means perfectly correlated data, while 0.00 would mean no correlation.  This dataset with R2=0.11 is pretty weakly correlated. I actually tried a few different types of fits to the data (linear, polynomial, logarithmic, exponential) and while a couple were marginally better than the linear fit shown, not by enough that made them worth the complexity in my opinion.

For the mathematically inclined, I show at the top of the graph the equation for the best linear fit to the data, and it is repeated in words below.

Sales Price (US$) = $430 + 0.34 x GoValue Estimate

For example, if GoValue tells you that a certain NNNNN.com domain name is worth $900 the best fit regression suggests that your sales value would be about $740.  Note that at best results are only meaningful to two significant digits, so I have rounded both the parameters in the equation and the final result to this precision.  Let me stress that this is only moderately more significant than simply using the average value.  Also, this equation is derived only for NNNNN.com domain names and is not directly applicable for any other types of domain names. 

Conclusions

Christopher Beam has written a really informative article at The New Republic on why, particularly in China, numbered sequences are so popular and effective as domain names. I strongly encourage you, particularly if you invest in numeric domain names, to read the entire article which is full of  insights.

One thing  I noticed while using GoValue was that there were numerous comparator sales that came up that had not been in the NameBio database, and generally these were towards the lower end of sales prices.  This suggests that some of the venues not reporting to NameBio may well have lower prices, and that possibly the price range for the recent sales is indeed in keeping with the overall record. NameBio no longer  calculate the median, but almost certainly it is in the same range  as these sales. NamePros experienced  users have pointed out that sales to end users frequently have higher prices than  sales on venues such as GoDaddy Auctions and some of the registrar marketplaces that are dominated by sales from one domain investor to another.

Overall GoValue does a good job of estimating the value of these assets, with almost no difference between the average value predicted by GoValue for the dataset and the average sales price.  It seems only moderately effective in recognizing higher quality names however, so you should never depend exclusively on any automated estimate of domain worth.

As with conventional  real estate, prices go up and down over time.  I sense a very slight downward trend, but NNNNN domain names remain good value assets. Relatively short numbered domain names are among the most liquid part of a domain name portfolio, and therefore deserve to be part of your diversified portfolio, provided that you can acquire them at reasonable cost.

Links:

• NameBio Daily Report for August 11
• Just the NNNNN sales from Aug 11, 2018 report
• All Time NNNNN.com sales
• The Secret Messages Inside Chinese URLs 
• Chinese Numerology
• NameBio Daily Reports
• NameBio database
• GoValue
• Our site NamesThat.win - thanks for visiting
• Permanent link to this blog post

Original post Aug 12, 2018.

Disclosure:  I do not currently hold any NNNNN domain names, so have no conflicts of interest with respect to them.  I do try to use a fair and balanced approach in all of my analyses however.  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. 

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.

I try to be fair, balanced and objective in my analysis.  If you feel this post does not meet that standard, please express your concerns to me.  

In a very few cases there may be affiliate links on this blog. This means I receive a small amount if users visit or make purchases via the link. You do not pay any additional charge due to using an affiliate link, and in some cases your cost will be below the normal price. I receive no identifying information about who clicks, or does not click, any link. I never accept compensation to provide favourable review of any particular service or product.

The text of this posting is ©R Hawkes, all rights reserved. However, you may, without permission, use reasonable length portions of the post as long as a link to this post is also provided. If you wish to use the complete contents of a post, please request permission. I am normally open to reprinting, but will consider each request individually. 

The images used are either those associated with a product or service, my own images, or Pixabay images believed to be available for use without attribution. If you see any image that you believe is problematic, please let us know and we will immediately correct the situation.