‘Verisign’ on my mind – I agree and disagree.
Read the full article here:
Basically they are saying that people are greedy and not giving value for money.
If I were the Joe Blogs of this world and all I wanted to do is flip domains for a living and had no clue about saving a company money in paid per click advertising, pulled a figure out of the hat, I wouldn’t blame companies calling me a ‘Domain Scalper’ as that is potentially what I would be.
On the other hand if I were a business selling domains with a view of developing them for a company then I would take offense to such allegations as ‘Rick Schwartz’ so happily and rightly said in his blog most recently:
But what plays in the back of my mind is not the scalpers of this world but the money launders and tax evading companies/people that buy up domain names for illegal purposes.
Some of the highest sold domain names are questionable as how did these sellers come to the figures that have been published as sold. How did they predict future business sales in order to reach these enormous amounts of money.
I agree that some domains especially the one word dot coms are worth a lot of money but how did these people reach these figures of past history domain names? Even using my valuation techniques I question how these numbers were agreed and sold. Afterall a company works within budgets and have set amounts of money for each department including advertising and marketing.
Where has the money come from to pay for example $11 Million for a domain name? How long would it take to get the money back in revenue to pay for the asset in question?
How would a company justify paying this amount of money to the IRS or the Inland Revenue? There is more going on here that meets the eye.
Yes of course companies that have branded themselves and trademarked their names will secure everything that can be misconstrued to stop competitors and cybersquatters using their traffic as a means to help their businesses, that goes without saying and will pay enormous amounts of money for the acquistions.
Here is food for thought and this is my own personal opinion, whereby I develop websites for companies and myself. Say I wanted a domain name that was not availble but was selling on the open market by a domainer or domain broker, if both parties could not justify why the price of the doamin was worth more that £10,000.00 or dollars for arguments sake. I would not pay for instance millions of pounds or dollars for aq domain name as the tax people would have something to say.
I mention in my book about a 500ct diamond and the person who is selling it wants a domain that I happen to own, this is all hypothetical by they way, then in these circumstances I would most probably pay high figures especailly if my brand was well known. But there is a thin line between cybersquatting and legitamacy. Otherwise I would not pay the ridiculouse amounts of money people are asking for domain name sales.
I have recently published a book that goes into some detail about money laundering and valuations.
The link to the books is here: https://startbrand.co.uk/Marketplace.html#!/Domain-Sellers-Handbook-Soft-Cover/p/122824524/category=0
You can buy it directly from our store for £14.99
If people are not adding value to what they are selling and cannot give a company reasons why they think their asset is valuable then I think ‘Verisign’ has a valid point!