Valuing a .com.au domain name is not always easy.
The common dialogue between buyer and seller goes something like this:
I would like to buy your domain. How much?~ Buyer
I bought it for a project of my own. What are you offering?~ Seller
The buyer then trawls the internet for advice on valuing a .com.au domain name, reported sales and even turns to quantitative sources like Estibot.com. They ask the IT guy. Then they ask the SEO guy. Finally, the buyer comes back to the seller with an offer, but that offer is so far away from fair value that it sets negotiations off on the wrong foot and usually results in a big fat ‘no deal’ from the seller.
Where did the buyer go wrong?
The buyer searched the internet for advice, instead of applying basic commercial acumen and common sense:
- A domain name is an asset that has appreciated in value and is likely to continue appreciating in value.
- It is an asset that will have a future residual value that is likely to be higher than the acquisition price.
- It is an asset that can be written down for tax in some circumstances, providing a tax benefit, or otherwise remains capitalized on the balance sheet –adding to the enterprise value.
- It is a unique asset, one that has often been ‘taken’ for some 10-20 years, for which there is no substitute, and is a market unto itself –similar to fine art or heritage number plates.
- The costs of holding the domain are negligible ($9-10 per year), and even if it does not appear to be used all that much, there is no real need for the seller to part with it.
- The asset has great potential to transform the business and deliver unforeseen and often unquantifiable benefits, ie. a ‘multiplier effect’.
- The opportunity cost of not acquiring the asset now or sooner is cumulative, resulting in greater detriment to the business year after year.
- The risk of someone else acquiring the asset is very high, which could leave the opportunity cost uncapped if this occurs.
- It may be anticipated that the asset will greatly improve stakeholder engagement, credibility, brand position and/or conversions or sales. This value-add is certainly worth more than what one might pay a second receptionist or payroll assistant each year.
- It may be that marketing is important to the business. Whereas AdWords or a magazine advertising, outdoor media or radio campaign may offer limited residual value (once over), a domain name is a piece of internet real estate that will continue to deliver year after year.
- It may be that the business is more ‘b2b’, or does not rely much on marketing. When perceptions and position are important, the right domain name conveys clarity, excellence and trust, leading to better performance.
- It may be that security and confidentiality are important. Failing to hold the most intuitive domain name means missed emails, which can result in lost sales, damaged supplier relationships and compromised stakeholders.
Quality is remembered long after price is forgotten~ Aldo Gucci
The focus should be not on price, but on what is being acquired and what it will deliver.
Don’t put off until tomorrow what you can do today~ Benjamin Franklin
No man ever steps in the same river twice, for it’s not the same river and he’s not the same man~ Heraclitus
Blink, haggle or play chicken with the opportunity and it will be lost and never present itself again.
The buyer secondly went wrong by turning to online sources and quantitative valuation tools like Estibot.com.
- In Australia, .au has a history of strong policy regulation, and before 2008 it was not permitted to sell a .com.au or .net.au domain on its own. This created a culture of reticence when it came to publishing domain sales. This culture still endures today, despite registrants being able to freely sell names as they please.
- Bigger sales usually have NDAs (Non-Disclosure Agreements) attached to them, but even smaller sales are often subject to formal or informal NDA for a wide variety of reasons.
- Online sources and Estibot.com present only published sales, and the data is skewed heavily by results from the expired domain auctions.
- For more than a decade, privately run ‘drop-catchers’ (eg. Drop.com.au & Netfleet) have used proprietary systems to snap up expiring .com.au and .net.au domain names the second they become available. However, bidders generally have only 24 hours’ notice that a name has expired and is being auctioned. As most end user and corporate buyers cannot make decisions within 24 hours or are not even apprised of such auctions, most names end up going to investors or speculators, at just a fraction of intrinsic value (ie. ‘wholesale’).
The buyer thirdly went wrong by asking the IT guy and/or SEO guy for advice on what is essentially a strategic commercial decision. These people are no better equipped for making such a decision than is a secretary for negotiating a commercial lease.
- The IT guy can advise on implementation, but not on what is best for the business.
- The SEO guy can advise on PageRank and the health of the domain, but not on overall strategic direction for the business.
The person best-equipped to make a decision on a domain name purchase is the person in charge of overall business strategy. This is usually the Managing Director or CEO, Board or CFO.
.com.au sales that have been made public
Many of these sales are in fact wholesale prices, as discussed above.
This is a starting point that may assist when it comes to .com.au domain name valuation. Another important dimension is the value in use to your business over 5, 7 or 10 years, and there are other factors also, discussed above.
|Property.com.au||$3,000,000||2001||Internal Liquidation||Market Analysis, AFR|
|Cars.com.au||$1,600,000||2010||Private||CarSales Annual Report 2011, p 44, GoDaddy|
|CarLoans.com.au||$703,000||2014||Private||Eclipx Group Interim Report 2015, p 27|
|Travel.com.au||$306,000||2008||Private||Wotif Annual Report 2008, p 58|
|Jobs.com.au||$300,000||2007||External Administration||Netfleet, The Age|
|Health.com.au||$271,000||2015||Private||GMHBA Annual Report 2016, p 27, DomainMarketplace.com.au|
|CreditCard.com.au||$160,000||2009||Private||Domain Name Wire|
|Flowers.com.au||$153,000||2003||auDA Generic Auction||The Age|
|Cars.com.au||$141,000||2003||auDA Generic Auction||Netfleet|
|InvestmentProperty.com.au||$137,501||2011||Expired Auction – Netfleet||MyBusiness|
|Cruises.com.au||$110,000||2013||Private||GoDaddy, Press Release|
|Broker.com.au||$100,000||2018||Expired Auction – Drop||DomainInvesting.com|
|Deals.com.au||$100,000||2011||Private||Daily Telegraph, SMH|
|Land.com.au||$100,000||2019||Expired Auction – Drop||Domainer, Archive.org|
|LifeInsurance.com.au||$100,000||2020||Expired Auction – Drop||Domainer, Archive.org|
|Poker.com.au||$100,000||2010||Private||Poker News Daily, SMH|
|Sleep.com.au||$100,000||2020||Expired Auction – Drop||DomainInvesting.com|
|Toys.com.au||$90,585||2015||Expired Auction – Netfleet||MyBusiness|
|BoatSales.com.au||$70,000||2005||Private||Startup Grind, video at 41 mins|
|Synergy.com.au||$65,070||2013||Private||WA Parliament Hansard, 8 Aug 2017, p 4, Domainer|
|CPA.com.au||$50,000||2018||Expired Auction – Drop||DNJ|
|Land.com.au||$50,000||2019||Expired Auction – Drop||DNTrade, Domainer, Archive.org|
|Law.com.au||$50,000||2019||Expired Auction – Drop||Drop|
|Florists.com.au||$45,000||2003||auDA Generic Auction||The Age|
|Bitcoin.com.au||$39,930||2014||Expired Auction – Netfleet||MyBusiness, Qntra.net|
|HomeLoanCalculator.com.au||$36,301||2012||Expired Auction – Netfleet||MyBusiness, Netfleet|
|CareChoice.com.au||$36,300||2020||Private||Domainer, Archive.org, eBranding|
|Electricity.com.au||$34,026||2011||Expired Auction – Netfleet||Netfleet|
|Hardware.com.au||$33,333||2010||Expired Auction – Drop||Dynamic Business, Drop|
|Training.com.au||$33,121||2014||Expired Auction – Netfleet||Netfleet|
|Tennis.com.au||$32,500||2007||Private||Tennis Australia Annual Report 2014, p 70|
|MySuper.com.au||$30,851||2013||Expired Auction – Netfleet||DNJournal|
|CurrencyConverter.com.au||$30,250||2010||Netfleet Aftermarket||Netfleet, DNTrade|
|Advice.com.au||$28,710||2018||Expired Auction – Netfleet||eBranding, DNTrade|
|Cloud.com.au||$27,500||2014||Netfleet Aftermarket||TLD Investors, Netfleet|
|SexToys.com.au||$25,500||2009||Expired Auction – Netfleet||DNTrade|
|Gas.com.au||$25,000||2020||Expired Auction – Drop||Domainer, Archive.org|
|CentralCoast.com.au||$24,200||2012||Expired Auction – Netfleet||DNJournal|
|LifeBlood.com.au||$24,200||2018||Private||DNJournal, Domainer, Archive.org|
|Rugs.com.au||$22,110||2014||Expired Auction – Drop||DNTrade|
|Appliances.com.au||$20,888||2014||Expired Auction – Drop||Drop, DNJournal|
|Credit.com.au||$20,009||2012||Expired Auction – Netfleet||Netfleet|
|WeddingInvitations.com.au||$19,501||2012||Netfleet Aftermarket||DNJournal, eBranding|
|Wines.com.au||$19,000||2010||Expired Auction – Drop||Drop, SMH|
|PetInsurance.com.au||$18,888||2011||Expired Auction – Netfleet||The Australian|
|CarParts.com.au||$18,011||2011||Expired Auction – Drop||Drop, SMH|
|Software.com.au||$18,000||2003||auDA Generic Auction||The Age|
|BusinessFinance.com.au||$17,869||2014||Expired Auction – Netfleet||DNJournal|
|CompareLoans.com.au||$17,869||2016||Expired Auction – Netfleet||Netfleet|
|Stocks.com.au||$17,160||2015||Expired Auction – Netfleet||DNJournal|
|RFM.com.au||$17,050||2019||Netfleet Aftermarket||Domainer, Archive.org|
|Sold.com.au||$16,903||2013||Sedo||Domain Name Wire, DomainNames.com.au|
|FirstChoice.com.au||$16,500||2015||Expired Auction – Netfleet||Netfleet, ExpiredDomains.com.au|
|Backpackers.com.au||$16,000||2009||Expired Auction – DomainWatch||namePros|
|CarAuctions.com.au||$15,451||2012||Expired Auction – Netfleet||DNJournal|
|TradingRoom.com.au||$15,000||2021||Expired Auction – Drop||Domainer|
|Jeweller.com.au||$14,767||2008||TRAFFIC Down Under Auction||auDA|
|FreeBets.com.au||$14,729||2012||Expired Auction – Netfleet||DNJournal|
|RPL.com.au||$14,474||2015||Expired Auction – Netfleet||Domainer, Archive.org|
|StampDutyCalculator.com.au||$14,000||2010||Netfleet Aftermarket||DNJournal, Netfleet|
|Townsville.com.au||$14,000||2009||Expired Auction – Netfleet||namePros, DNTrade|
|Stockbroker.com.au||$13,860||2015||Expired Auction – Netfleet||DNJournal|
|Christmas.com.au||$13,811||2017||Expired Auction – Netfleet||Netfleet, DNTrade|
|History.com.au||$13,644||2008||TRAFFIC Down Under Auction||auDA|
|LifeInsuranceComparison.com.au||$13,201||2011||Expired Auction – Netfleet||Netfleet, DNTrade|
|Marketing.com.au||$13,112||2011||Expired Auction – Drop||DNTrade|
|TaxReturn.com.au||$12,222||2015||Expired Auction – Netfleet||Netfleet, DNTrade|
|StockExchange.com.au||$12,039||2008||TRAFFIC Down Under Auction||Netfleet|
|Surfing.com.au||$11,746||2018||Expired Auction – Netfleet||Netfleet, DNTrade|
|ShippingContainers.com.au||$11,670||2011||Expired Auction – Drop||DNTrade, namePros|
|XX.com.au||$11,633||2014||Expired Auction – Netfleet||DNJournal|
|OH.com.au||$11,562||2017||Expired Auction – Netfleet||Netfleet, DNTrade|
|IV.com.au||$11,550||2017||Expired Auction – Netfleet||Netfleet, DNTrade|
|Maternity.com.au||$11,111||2010||Expired Auction – Drop||DNTrade, DNJournal|
|BudgetInsurance.com.au||$11,062||2016||Expired Auction – Netfleet||Netfleet|
|Cleaning-Services.com.au||$11,049||2017||Expired Auction – Netfleet||Netfleet|
|OnlineTaxReturn.com.au||$11,049||2017||Expired Auction – Netfleet||Netfleet|
|SouthernCross.com.au||$11,049||2014||Expired Auction – Netfleet||DNJournal|
|TafeOnlineCourses.com.au||$11,049||2016||Expired Auction – Netfleet||DNJournal|
|Used.com.au||$10,651||2013||Expired Auction – Netfleet||DNTrade|
|BlueMountains.com.au||$10,555||2011||Expired Auction – Drop||DNTrade|
|CaravanParks.com.au||$10,100||2010||Expired Auction – Drop||DNTrade|
|13Work.com.au||$10,070||2012||Expired Auction – Netfleet||DNTrade|
|Appraisal.com.au||$10,000||2019||Expired Auction – Drop||DNTrade|
|Asset.com.au||$10,000||2021||Expired Auction – Drop||Domainer|
|Brokers.com.au||$10,000||2018||Expired Auction – Drop||DNJournal|
|DL.com.au||$10,000||2019||Expired Auction – Drop||DNTrade|
|Finances.com.au||$10,000||2019||Expired Auction – Drop||DNTrade|
|Gday.com.au||$10,000||2021||Expired Auction – Drop||Domainer|
|IC.com.au||$10,000||2021||Expired Auction – Drop||Domainer, Archive.org|
|University.com.au||$10,000||2019||Expired Auction – Drop||DNTrade|
|WeddingPhotographers.com.au||$10,000||2012||Netfleet Aftermarket||Netfleet, DNTrade|
Notes on Property.com.au
Property.com.au has widely been reported at $9 million, but there is also another $3 million sale that has gone under-reported.
Competing with RealEstate.com.au and others, the original owner PMP Limited lost $2.8 million on the site in the 6 months to December 2000. This was probably due to the offer of “free computers, scanners and tuition to new real estate clients” from September 1999. In 2001, ACNeilsen analyst Ian Webster described the portal as “at a standstill… It is not getting the resources… It needs a complete revamp and cannot go forward without alliance partners”.
Property.com.au was sold for scrap to RPData, and the sale price for this shell was $3 million, as reported in company reports and elsewhere. An additional $500,000 for content over 2 years was structured into the deal to assist PMP with its liquidity issues, but of course virtually nothing was done with the site as can be seen from these archived pages in 2001 and 2004. The thing being bought here was the domain name, and RPData was not even a direct competitor.
At the time the CEO Simon Baker reportedly stated that they were interested first and foremost in tying up the only possible competitor to their generic industry domain name rather than acquiring agents or listings (which would for the large part be duplicated anyway). The website at property.com.au since then appears to have been left in a perpetual state of ‘beta’ suggesting again that it was the domain that was the target rather than the business behind it at the time of purchase.
And of course, the domain name has barely been used since, except for a basic widget and redirection.
Thus these two entries for Property.com.au, at $3 million (2001) and $9 million (2004), have been included in the table above.
Updates on other known .com.au sales and notes
- At some time between the auDA Generic Auction 2002 and the June 2008 scrapping of the prohibition on resale, ING Bank (Australia) Ltd reportedly bought Mortgage.com.au for $235,000 and Fuji Xerox Australia Pty Ltd Photocopier.com.au for $137,000. auDA understood these figures to be credible enough for publication here. However as there was a prohibition on resale enshrined in policy, finding further substantiation of these two sales is difficult. The prohibition was enforced with an iron fist, such that the owner of Sport.com.au was stripped of its domain name. To maintain the integrity of the data in the table above, these two sales have not been included.
- PBL’s 2004 sale of Cricket.com.au to Cricket Australia is rumoured to have been for $110,000, however this, as with the two names above, needs more research and so has not been included.
- In 2010, CarSales acquired UsedCars.com.au for a six figure sum, rumoured to be well over $200,000. On page 61 of its Annual Report 2011, CarSales disclosed it spent $365,000 excluding GST on domain names for the year. The precise amount for UsedCars.com.au is difficult to establish and so this has not been included.
- In 2007, Tennis Australia disclosed that it had paid a “hefty fee” albeit less than six figures for Tennis.com.au. To date, this fee was widely understood to be $60,000 to $80,000, however pages 78 and 91 of its Annual Report 2009 show this figure was $32,500 and this is confirmed as being the “domain name” on page 70 of its Annual Report 2013.
- In 2007, Wotif bought Travel.com.au for $57 million. This included LastMinute.com.au and other sites. Domain names on the books of Travel.com.au were carried at $306,000 at cost (see page 58 of the Annual Report 2008). This would’ve included LastMinute.com.au and a few lesser names, but it is fair to say the overall asset here was Travel.com.au, as the market value of names like LastMinute.com.au in 2008 and prior was negligible.
- In 2015, Eclipx Group bought CarLoans.com.au for $29.7 million. This included McGowan’s other brands Fleet Choice and CarLoans.co.nz, and so ‘Brand Names’ capitalized on page 23 of the Interim Report 2015 is essentially the CarLoans.com.au brand name. This appears to be borne out on page 27 where it is described as “Intangible asset brand” (singular). Thus the figure presented in the table above is $703,000, per page 27.
- In 2012, Aura Capital bought HomeLoan.com.au for “over $100,000”, however the exact price was not disclosed. $100,000 has been entered in the table above to enable sorting by price.
- In 2013, James Wester announced he had brokered CarLoan.com.au for “200k+ in a deal of mid xxx,xxx”, however the exact price was not disclosed. $200,000 has been entered in the table above to enable sorting by price.
- In February 2019, the expired domain name Land.com.au was auctioned for $100,000. However, possibly due to a complaint from an aggrieved losing bidder, auDA investigated the circumstances surrounding re-registration and decided to purge the name once more based on a technicality. Consequently, the name went to auction a second time in June 2019 and the successful bid was $50,000. Both sales have been reported in the above table. Cancellation of the license by auDA following the first sale does not mean it did not happen. The domain has since been sold privately for an undisclosed amount.
- In the table above, a number of brokered sales are described as ‘Private’. This is to show the difference between a marketplace listing (where a name is being offered for sale) or expired auction result (usually a 24-hour ‘fire-sale’) and a private sale. Note that ‘Expired Auction – Drop’ also refers to Domain8, its predecessor.
- To bid on names in the expired auctions on an impulse, the only ‘drop-catching’ platform operating at present is Drop.com.au, which has ceased publishing auction results for the time being. Owner Trellian says it has done this to address the issue that “the “wholesale” prices paid at Drop are setting the wrong expectations for end user domain values” (source). There is talk of another ‘drop-catcher’ coming.
- Finally, when it comes to the data in the table above, where GST is known to have applied to the sale and/or the associated registration fee that applied to the sale was disclosed as included, this has been included in the selling price. Note too that some errors in reporting by various online sources have also occurred due to foreign exchange discrepancies (USD/AUD). The table seeks to reconcile these also.
- Every effort has been made to ensure the accuracy of the data in the table. Note that for some of the sales listed here, the year of the sale has been inferred from Archive.org records where no other records could be found.
What is a .net.au domain name worth?
Although .com.au is preferred, it may be out of reach for some. The .net.au extension has very wide adoption among SMEs as it is trusted and well-recognized.
While there are some outliers (for example, at least one .net.au domain within the finance vertical has sold for more than $60,000 and the owner of another domain, RealEstate.net.au, is rumored to have declined $100,000), most generic .net.au names are worth between $2,000 (the price of a laptop) and $20,000, with $10,000 being a common price level for good names.
.net.au is the only viable alternative to .com.au in Australia, and is more credible than .com (the US extension) with Australian internet users. This makes it excellent value-for-money.
Some public .net.au sales:
|CarInsurance.net.au||$33,001||Expired Auction – Netfleet|
|CreditCards.net.au||$24,202||Expired Auction – Netfleet|
|Lotto.net.au||$12,000||Expired Auction – Netfleet|
|HomeInsurance.net.au||$10,502||Expired Auction – Netfleet|
|WebDesign.net.au||$10,000||Expired Auction – Netfleet|
The right domain name makes all the difference
- From Beep to CarLoans: How a domain name change resulted in a $40 million turnover boost
- CarLoans.com.au $29.7 million See page 28 of Eclipx Group Interim Report 2015
- CarAdvice.com.au $35 million Car Advice website started by a 21-year-old in his parents’ spare bedroom has sold for $35 million
- FindABabysitter.com.au $3 million It’s her online baby & one source (other sources removed)
- Flatmates.com.au $25 million REA pays $25m for Flatmates.com.au
- Health.com.au $46 million GMHBA acquires Health.com.au in deal likely to deliver Geelong jobs
- Photographers.com.au $2.5 million+ Snappr to take over Photographers.com.au
- RSVP.com.au $38.9 million Fairfax buys online dating service (some sources removed)
- Travel.com.au $57 million Wotif beats Webjet for Travel.com.au
- Robert McIntosh – Q&A
- Fred Schebesta and Finder.com.au – Interview (note, this will be republished on DomainerShow.com.au soon)
- Gabby Leibovich and Catch.com.au – Interview (note, this will be republished on DomainerShow.com.au soon)