Comments on: Why You Shouldn’t Use Revenue Multiples

By: Michael Gilmour

Michael Gilmour — Sun, 02 Dec 2007 23:18:13 +0000

Elliot,
First of all let me thank you for your kind words in your article.

I agree with your summation that purchases for many categories of domains can not be based only on revenue. The problem that is then faced is what should the price be based on? This is the challenge that I see that needs to be overcome in order for domainers to get the true value of their generic domains.

For all of the rest of their domains (typos etc) then I don’t see any other method of valuing the domain at present. Love your input on this though.

By: Dan

Dan — Thu, 29 Nov 2007 17:42:02 +0000

I agree 100% with your skeptical view on the utility of revenue multiples. Whatever makes sense for the *buyer*, the tiny multiples I see being thrown around don’t make any sense for *sellers*. Maybe being focused in the adult industry has skewed my perception, but my traffic domains are money spinners, and there’s no way I’d sell them off for just a few months (or even a few years’) revenue. Why sell the cow for bottom dollar when milk is expensive?

The only domain sales that make sense to me are the low-traffic undeveloped domains with development potential. And there, the value is mostly in keywords, eye appeal, and brandability — all very subjective when it comes to pricing time.

By: Ms Domainer

Ms Domainer — Thu, 29 Nov 2007 07:23:07 +0000

I like your six-point plan for buying a domain; #4 seems very important. In my searches, I now pay close attention to the list on the right.

Ms Domainer