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Ask HN: Valuation of domain for sale to large corporation?

12 points by wehriam ↗ HN
A friend was recently sued, unsuccessfully, for possession of a domain name he has owned for several years by a company that makes cereal and rhymes with Bellog.

The company is now trying to purchase the domain from him. How should he go about finding an appropriate value for this domain? Are there specialists he can consult?

16 comments

[ 4.2 ms ] story [ 74.2 ms ] thread
noodle
depends. if he's willing to pay, i'm sure he could find someone to appropriately value it.

i also would say that we could probably help valuate it here.

would need info like, how much he paid, how much he's making with it now, traffic it gets, etc..

anand
There is a official procedure that companies can use to dispute the domain name if you're trying to hustle them that costs them about $1000-2500. I forget what its called but if you look at past cases you'll see a lot of people trying to hustle corporations and the decisions handed down. I think if Bellog thinks they can win (very possible) they would price you according to that figure.

http://www.livecurrent.com/ is a pro-Domain Squatter. They may be able to help

SwellJoe
If, as the OP states, he's already been sued--and come out the other side unscathed, then he's in a far stronger bargaining position. And it suggests that there probably isn't a strong case to be made for the official procedures to be workable for them, and they may have already tried it and failed. I suspect they didn't sue first--that's a very big weapon to fire as an opening salvo. Though, I guess it does happen.
wehriam
That's correct. My understanding is that the company has been unable to win in court.
fnazeeri
The key is getting a 3rd party to the table. For example, if P&G were expressing interest... It reminds me of a case from b-school titled, "Up for Auction: Malta Bargains with Great Britain" which is worth a read if you can track it down. Having a 3rd party could mean the difference between getting $10K or $1MM.
gojomo
A potential problem in this case with using a auction with multiple bidders: it could reopen the domain ownership dispute.

By my (admittedly limited) understanding, demonstrating you are not just interested in flipping a domain to the highest bidder, but have a valid intended use, is one of the factors that can overcome a trademark claim.

As in many questions asked here, the poster really needs to find an expert. I would suggest someone whose business is domain buying and selling, including in the presence of trademark claims, and get their negotiation advice (perhaps for a commission).

(Sorry, no names come to mind. There was an article about some successful speculator/squatter in Vancouver a couple years ago...)

FiReaNG3L
estibot.com

Keep in mind that its an automated estimate. But in my experience, it makes very good ones. Of course, it all depends of what the buyer wants to pay...

ra
Domain appraisal is very subjective.

I'd say it's worth looking at namepros.com and dnforum.com where you might be able to get some friendly appraisals. Also have a look around for recent sales history. Try to find similar names that have sold in the past.

I wouldn't recommend paying for a domain appraisal. They're generally scams but usually way off the mark.

If it is a true generic domain like cereal.com or breakfast.com, then it's worth a small fortune. Like $500,000 minimum!

Have a look at: http://dnjournal.com/ytd-sales-charts.htm for the year to date big domain sales.

Also: http://www.ricksblog.com/ Rick Schwartz has made some huge private sales in the past, and he might be able to offer you some guidance.

Good luck!

curiousgeorge
If someone sued me and then wanted me to voluntarily enter into a contract with them, I'd assign a very large figure to goodwill regardless of the appraised price of the asset.

If your friend is taking a mercenary approach, a good starting point is estimating what the potential buyer is already paying in the way of legal expenses, adding his own and then applying a multiplier.

davidw
In addition, I'd add my own time lost do to the hassle, at a reasonable hourly rate.
briansmith
I don't think that an hourly rate is going to do much to the price here. It's got to be measured in the hundreds of thousands of dollars or even millions if they were willing to sue for it.
astrec
The results from recent auctions are instructive: http://marketplacepro.moniker.com/auction/index.html

We used an NYC based lawyer who specializes in premium domain acquisitions to secure a domain for USD$400k last year - if your friend is interested interested I can dig up the name.

SBev
Simple its as valuable as he wants it to be. If the company has filed suit and went to court they have already spent $25,000 or more just to file the paperwork. He should ask for the world and slowly go down from there.

In a prior job the company I was with renamed itself. The branding consultants and executive management found the perfect name and started moving forward with all the changes. Then they asked my VP about the websites and such. Of course the name was already registered. After approaching the domain owner about the name he requested $50,000. After haggling the domain owner happily took $20,000. My VP was actually authorized to spend $5 million to acquire that domain.

Point of the story, obviously want that domain badly so your initial amount should be painfully large. Just keep reminding your friend how (s)he felt the day all the legal paperwork was handed to him.

patrickg-zill
It is just another line item for them in terms of cost, so don't be shy.

Remember that if they are going to use the domain for marketing purposes, they will be spending millions upon millions of dollars in advertising; so even $500K or more for the domain name is not a big deal to them.