The business of resale of previously registered domain names is known as the domain aftermarket. While prices vary widely, some domain names have sold for millions of dollars during the dot-com heydays.
There are several factors that determine what a particular domain name is worth. They include:
- The name is common enough that the web surfer would type the domain name direct into their web browser instead of going through a search engine, i.e. toner.com for someone looking for printer toner.
- The ability of a word being recognized and easily remembered as a brand of a company, i.e. oreos.com for one of the best know cookies in the world.
- The ability to spot trends and predict the value of a name based on its length (shorter the better), clarity and commercial use. For instance, the word 'loan' is far more valuable than the word 'rainbow'.
There really is no definitive way to figure out the value of a domain name. Some people will pay more for a very short name, while others will pay more for a descriptive one. The real value to the buyer is what he perceives to be the amount of traffic/sales that it will bring him.
Generic domain names are some of the most valued. One of the reasons is that even without advertising or marketing, they attract clients seeking services or products who simply type in the generic name. This is known as Direct Navigation or Type-in Traffic. Thats why movies.com was bought by Disney and books.com was purchased by Barnes & Noble.
According to Guinness World Records, the most expensive domain sales on record as of 2004 were:
- Business.com for $7.5 million in December 1999
- AsSeenOnTv.com for $5.1 million in January 2000
- AltaVista.com for $3.3 million in August 1998. (They branded the search engine before securing the rights to the domain name and had to pay for big dollars for it.)
- Wine.com for $2.9 million in September 1999
- CreditCards.com for $2.75 million in July 2004
- Autos.com for $2.2 million in December 1999
In January, 2008, CNN paid $750,000 for iReport.com. Like AltaVista, they branded their news crowdsourcing 'I Report' and had to pay the price to get the corresponding domain name.