Comments

1. Rick Schwartz says

   November 2, 2012 at 10:57 am

   Mike,
   As I have stated for years….ALL domain appraisals are worthless. Period.
   They are based on bullshit which in my opinion makes them for AMUSEMENT ONLY and should be labeled as such.
   I am trying really hard not to use the word SCAM. But it always seems to be the first word that comes to mind whenever I hear somebody say “Domain Appraisal”. The others include “Rookies”, and “Desperate”. I won’t even answer an email that MENTIONS an appraisal. The minute ANYONE touts an appraisal, in the garbage it goes. These services do DAMAGE to domineers. they don’t help them. These are based on NONSENSE with info fed into them by folks with limited knowledge of what makes domain names valuable to begin with.

   • Ed says

     January 12, 2017 at 12:28 pm

     Hello Mike & Rick,

     I’ve sat in the background for many years after experiencing some of the “SCAM” side effects many years ago this article and many posts talk about. I was about to put my portfolio in the hands of Afternic, but again, I was told that in order to ‘list’ any of my domains above $25k, an appraisal ‘authenticating’ the amount was required (red flags again flying up all over the place here). Time and again, experiences with some of those you mention as well as others not mentioned turned out to be nothing but well dressed loosers. I’ve held a smaller portfolio (under 1,000) that has many premium domains, some for decades now and don’t have the inclination or time to mess with these loosers.

     Growing older, I don’t have the spunk to effectively market them yet as this article and discussion re-affirms, it’s 99% Tom-Foolery out there vs. competent, professional broker/negotiators. Some of my premium domains are at the top of their respective industries, and some I secured long ago, go along with intelectual property rights also secured that the Patent Trademark office has never granted anything similar to anyone else since, where one trademark could well be worth 7 figures + together with the top domains held that partner with those domains.

     I know you guys do well selling from your own domains/portfolios, but is there out there actual reputable competent seasoned marketing / negotiators that go on a basis of a job well done, and are rewarded by getting higher sales to viable professional end users vs all the garbage hit n run low-balling shiesters that seem to have saturated this industry? As like in the realestate industry, it’s a given that putting a property in the hands of a competent broker will not only realize a higher sale price, the owner will usually realize a higher end amount than they otherwise would have if they tried to sell it themself, and the work is done for them, and the broker is rewarded by getting a higher return due to the broker getting a much higher sell price.

     I’ve held onto these for decades, and am not desperate but I think after 2007 and the “great recession”, we may have a short window of optimism coming that may boost things for those in this industry. If Marchex can pull off those #’s during the “great recession” then I would think the coming window may result in the potential of even better returns.

     Just as you guys have displayed year after year (I used to follow Rick’s discussions years ago), a domain’s value is established by negotiations with a viable end user who realizes that the cost of branding a product or service tied to a non-relevant domain may be as much or more than just acquiring a top relevant domain and launching off of that domain.

     Do any of you long-term industry leaders have any suggestions as to some broker/negotiators that take pride in their work and operate in a professional ethical manner that you can suggest working with?

     Any feedback would be appreciated.

     Thanks,
     Ed

2. KINGnet says

   November 2, 2012 at 11:18 am

   I agree.

   I never use this service to buy or sell a domain. There is no perfect matrix to price your domain name, it’s a buyer pocket that will decide.

3. George Kirikos says

   November 2, 2012 at 12:04 pm

   Well done, Mike. I was discussing Estibot elsewhere, and as you noted, it’s *not* really a good prediction/appraisal tool. It overstates its apparent accuracy because it will simply LOOKUP past transactions that it is in its database and call that an “appraisal”, instead of basing an appraisal on a group of variables that excludes the past known transactions. Statistically, that means it is OVERFITTING the data. It can fit the “training set” (past observed transactions) well, but can’t predict “out of sample” results well at all.

   http://en.wikipedia.org/wiki/Overfitting

   Suppose you have a model:

   Y(t) = f (x1(t) , x2(t), x3(t), x4(t), x5(t), ….., xN(t))

   In other words, the estimated value of asset Y at time (t) is a function of N variables observed at time (t), and those variables are (x1 through xN). That function can be (and usually is!) non-linear and complicated, but people do a linear regression or some other simple function. For domains, variables x1 through xN, we can imagine that they’d include things like:

   (a) domain name length
   (b) TLD
   (c) search frequency
   (d) value of PPC terms
   (e) number of words
   etc.

   However, it appears that what estibot is doing is either:

   Model 1:
   (a) If we’ve never seen a sale of domain Y before, then Y(t) = f (x1(t) , x2(t), x3(t), x4(t), x5(t), ….., xN(t))
   (b) If we *have* seen a sale of domain Y before, then Y(t) = Y(t-1) + fudge factor

   or
   Model 2:
   Y(t) = f (x1(t) , x2(t), x3(t), x4(t), x5(t), ….., xN(t), Y(t-1))

   where Y(t-1) is directly on the right hand side of the equation (and weighted very heavily)

   Those models are extremely uninteresting, because most people are going to be interested in how the model fits “out of sample”, i.e. they don’t *know* the value of the domain they’re trying to appraise, and they want simply:

   Y(t) = f (x1(t) , x2(t), x3(t), x4(t), x5(t), ….., xN(t))

   (where “Y” isn’t on the right hand side of the equation)

   Now, to *build* your model properly, you can take a set of observed transactions (Y1, Y2, Y3, ….etc.), use their respective variables for X, and come up with the calibrated model. That model will naturally have errors (i.e. some estimates of Y will be high, some low, but on “average” the error will be zero). There are measures on the degree statistical fit of the model to the observed transactions (it’s not going to be perfect, especially in economic data sets, as opposed to things like physics, chemistry, etc.).

   So, what Estibit *should* be doing is reporting only results where “Y” is *never* on the right hand side of the equation. That’s the true strength of the model. Otherwise, the model is simply *overfit*.

   One of the ways to measure the quality of a model is how many variables it has (i.e. the number of “X”s). The fewer the number of variables, the better, all else being equal. If you simply stuff the past history of ALL sales into the right hand side of the equation, sneaking them in as “variables”, you’ve now really got a model that has 50,000+ *variables* in the model, rather than 10 or 15 or whatever.

   This new model with 50,000+ true variables will look great when doing “in sample” estimates (i.e. it’ll report past transactions exactly, because it’s simply a lookup, not based on a proper model). When doing “out of sample” estimates, which is the true strength of a model, it’ll be horrible, because it’s overspecified.

   Now, can you look at past transactions? Sure, you use those to come up with interesting *variables* (i.e. the “Xs”). You don’t use them directly as “Ys”, them. e.g. you can say “2-letter dot-coms are special”, and you can have a “0-1” binary variable if it’s a 2-letter dot-com. That’s fine. You can’t just out “BJ.com” directly into the right hand side as a variable, though.

4. nick-capece says

   November 2, 2012 at 12:34 pm

   Micheal,

   You raise some well thought out arguments on the “failure” of automated appraisal.

   In my opinion, Estibot really does “best” when there are meaningful keyword .com’s with commerical intent and CPC. How can ANY appraiser, even expert human put an estimated value of FuntTine.c0m, DigiDay.com, etc??? Estibot is a hugely valauble tool for me for “scoring” a batch of 5000 domains, narrowing it down to perhaps 100 that i’ll manually analyze. Instead of dollar value, perhaps equate it to point value.

5. Grim says

   November 2, 2012 at 12:36 pm

   And then you have sites like Sedo who ask you to pay them for an appraisal if you want to price your domain over $10K. I understand their reasoning for doing so, since if they didn’t, people with garbage names could easily saturate their pages with absurdly priced domains, but like all appraisals, it’s equally worthless.

6. George Kirikos says

   November 2, 2012 at 12:41 pm

   Estibot isn’t the worst tool out there, though. GoDaddy’s appraisals are hilarious (get there via the “All Products” –> Auctions –> Domain Name Appraisals link).

   GoDaddy suggests School.com is worth between $986 and $1,832!!! LOL

7. Domenclature.com says

   November 2, 2012 at 12:52 pm

   A well researched, and overdue article. After reading this, the case should be closed on this issue. Q.E.D

   Domenclature.com

8. Francois Carrillo says

   November 2, 2012 at 1:29 pm

   Buyers always find Estibot overvalue domains and sellers the inverse, it’s funny.

   Marchex is known for ask crazy prices and not negociate, so only the most motivated buyers finish buying a name.
   Estibot valuation like most appraisal tools is based on metrics and past sales, the problem is most of these sales are domainer sales.
   So on one hand we have a company who only sell to end-users trying to maximize profit and in another hand a tool based on a hitory of sales where more than half were domainers sales (in average 5-10% of end user price).
   This is why these sales cannot break the accuracy of Estibot to valuate names, it only shows that if you can wait then you will maximize your profit.

   By the way, value IS NOT sale price, depending the circumstances the differences can be tremendous and these sales only outlines this fact.

9. Bill Sweetman says

   November 2, 2012 at 1:36 pm

   Couple of points to make here, although I do wholeheartedly agree that appraisals (by any organization and any tool) are problematic at best. I also agree that it is very annnoying to have appraisals used by buyers in the negotiation process.

   BUT … before Estibot gets completely thrown under the bus here, I want to make sure people realize that Estibot is way, way more than just an appraisal tool. Even if you never use the appraisal tool within Estibot (and Mike makes a good point why you might not want to!), there are still about 20 other valuable tools that make up the suite of Estibot tools, and I know lots of people in our industry (including everyone on my team) that use many of the various Estibot tools and data on a daily basis. In fact, and full disclosure, we gladly pay serious money to the Estibot folks to have industrial strength access to Estibot and its various tools and data, which we integrate with our own in-house tool set. We find Estibot to be very useful in various aspect of our day-to-day business. And yes, we also use other excellent third party tools, like DomainTools.com and Jamie Zoch’s ZipZing, on a daily basis.

   For sure you can and should take automated appraisals with a grain of salt, or dismiss them altogether, but it would be shame if you didn’t take advantage of all the other features that Estibot offers just because you don’t like their appraisals.

   Cheers,

   Bill

   P.S. Nobody at Estibot asked me to write this. I am simply a very happy customer.

10. Michael Berkens says

    November 2, 2012 at 1:42 pm

    Bill

    My Post it only about Estibot’s appraisal service

11. Mike Mann says

    November 2, 2012 at 2:03 pm

    http://twitter.com/mikemanndotcom/statuses/162689677046984704
    “Funny if anyone thinks Estibot can appraise a domain better than myself, How is it that I sell them for 10x their appraisal cost every day?” Also thousands of names drop every day estibot says are worth thousands of dollars each but nobody will pay $10.

12. BlackHatDomain says

    November 2, 2012 at 3:58 pm

    Funny, I always took Michael Berkens as one of the insiders.

    Of course Estibot is right, as all those sale values are fake.

    Open your eyes.

13. Jeph Smythe says

    November 2, 2012 at 4:26 pm

    Personally I never could figure out the appraisal tools but The sale’s prices are definitely fake or at least flawed I am sure.

    The first domain on the list, FUNTTIME.COM was registered TODAY.
    Look at the screen shot from domaintools for proof. http://i.imgur.com/roHTE.png

    I dont know but personally I think the list is a craplist. Plus a some of the domains are chinese domains names that estibot is an English site and doesn’t know what to do with? Thank’s.

14. LM says

    November 2, 2012 at 6:50 pm

    Thats a very interesting lil piece of work, thanks.
    Its a bit over my head but someone could also run one of those correlation coefficient thingamys and get a handle on exactly how worthless is worthless.

15. BullS says

    November 2, 2012 at 6:59 pm

    Domain Sale Price Sale Price Difference From Appraisal Appraisal

    BullShitWebsites.com 20BillionUSD 20BillionUSD F-Off

16. Anunt says

    November 2, 2012 at 9:19 pm

    Estibot values my domain STFU.com at $284,000 … my response: STFU

17. Michael Marcovici says

    November 2, 2012 at 11:08 pm

    The List contains a domain we bought from Marchex some time ago.
    First the value shown is not exactly what we paid but its close – so far so good

    We paid 20.000 USD, yes, because we simply had to, we knew we overpay, like everyone on that list.
    But I would never say its worth 20.000 USD.

    http://domainindex.com/domains/domainindex.com

    3.890 USD, yes this is what I would consider the value. To me it does not count if in the lifecycle of a domain it is possible to sell it one time for a price X, to me the value is the price where it is liquid, where I can sell it every day, this is the appraised value that we try to find out at domainindex and I would say Estibot does the same.

    No service is perfect to predict such sales prices, not Estibot and not Domainindex, not even most domainers, both service serve in fact other uses, mainly connected to mass appraisals for dropcatchers etc.

    But the issue with pricing is a different one. If you sit on any asset that cost money to store and is illiquid and only from time to time you sell few assets very overpriced, it does not mean its a success story. To know how succesfull a portfolio is you need to know more. I also manage a fund and a big portfolio, the issues are: cost of capital, parking revenue – renewal fees, risk and liquidity. If I look at the list above and make the maths that does not look like a success story. To me it would look much better if liquidity is higher and maybe prices lower and there is resonable restocking in the portfolio.

18. bnalponstog says

    November 3, 2012 at 2:54 am

    Ok, funtTime.com is most certainly a typo. The domain is/was FunTime.com

    If you look back using archive.org you’ll find old park pages showing UltimateSearch which is Marchex.

19. DNcommenter001 says

    November 3, 2012 at 5:48 am

    I don’t know whether this list proves anything about real domain value, whatever that is. I ended up looking at about 30 of the domains’ sites, and found about half of them were parked, including three at Marchex, the last ones cited. I can’t figure out why someone would supposedly pay $80,000 for paimai.com for example, only to park it at a Marchex site.

    funttime.com ($50,000) – parked page at fabulous
    (maybe this is a typo, but funtime.com is just a basic affiliate style site where the links on the free games don’t even work)
    nasper.com (15,000) – doesn’t resolve
    linnan.com (10,625) – parked at domainnamesales
    seelasvegas.com (18,333) – resolves to an error page at seevegas.com
    smartdesktop.com (35,000) – doesn’t resolve
    seemiami.com (18,333) – resolves to an error page
    getreal.com (50,000) – private for sale page
    wodi.com (10,625) – parked at domainnamesales
    customlink.com (30,000) – redirects to customink.com
    carwise.com (60,000) – site for the “carwise” app to track vehicle repair (if your auto shop also uses the “carwise” solution)
    thedeep.com (25,000) – doesn’t resolve
    thenext.com (50,000) – parked at godaddy
    monkeygames.com (57,143) – parked at domainnamesales
    patchcable.com (30,000) – redirects to parked page at findlinks.com (copyright Marchex)
    paimai.com (80,000) – redirects to parked page at findlinks.com (copyright Marchex)
    domainmedia.com (22,500) – parked page at Marchex saying “this domain may be for sale”
    vmm.com (30,000) – parked at Marchex saying “this domain may be for sale”

    Other names however do resolve to impressive and expensive websites owned by big end user companies.

    Dave Tyrer

20. Michael Marcovici says

    November 3, 2012 at 7:29 am

    The List contains a domain we bought from Marchex some time ago.
    First the value shown is not exactly what we paid but its close – so far so good

    We paid 20.000 USD, yes, because we simply had to, we knew we overpay, like everyone on that list.
    But I would never say its worth 20.000 USD.

    http://domainindex.com/domains/domainindex.com

    3.890 USD, yes this is what I would consider the value. To me it does not count if in the lifecycle of a domain it is possible to sell it one time for a price X, to me the value is the price where it is liquid, where I can sell it every day, this is the appraised value that we try to find out at domainindex and I would say Estibot does the same.

    No service is perfect to predict such sales prices, not Estibot and not Domainindex, not even most domainers, both service serve in fact other uses, mainly connected to mass appraisals for dropcatchers etc.

    But the issue with pricing is a different one. If you sit on any asset that cost money to store and is illiquid and only from time to time you sell few assets very overpriced, it does not mean its a success story. To know how succesfull a portfolio is you need to know more. I also manage a fund and a big portfolio, the issues are: cost of capital, parking revenue – renewal fees, risk and liquidity. If I look at the list above and make the maths that does not look like a success story. To me it would look much better if liquidity is higher and maybe prices lower and there is resonable restocking in the portfolio.

21. righthand says

    November 3, 2012 at 8:26 am

    Domain sales price = value of domain + part of value of buyer’s idea.

    Estibot estimates value of domain. It tells us what the price should be if the domain market were working properly.

    Unfortunately, given monopoly position of .com owner, buyer who has already named his business or fallen for a particular name can be required to hand over part of value of his idea too.

    Domainers are the only people on the planet I can think of who can get away with selling stuff for a hundred times what they would give for it themselves.

22. Gazzip says

    November 3, 2012 at 2:01 pm

    Its nice to see all those prices made public

    Most of the domain data in Automated appraisals have been taken from the main marketplaces, Snapnames, Namejet or dnjournal

    Many of those reported “sales prices” over the last 6 years are actually BUY prices from domainers.

    I’ve seen MHB pay 50K for a name in the drops but that does not mean that is the true value of the domain does it.

23. Alessandro Rossi says

    November 3, 2012 at 8:21 pm

    I really cannot understand why Chase.com bought UltimateRewards.com domain name for $120,000 without buying http://www.Ultimate-Rewards.com at the same time which is now available to buy on Sedo since the Marchex domain name sales release list. Also I’ve noticed that SeattleNow.com that was sold along with PortlandNow.com as a pair for $125,000 the hyphen alternative version http://www.Seattle-Now.com is for sale on Sedo too. Can someone explain to me why bother in spending so much without taking care of the hyphen equivalent of the said domain names.

24. Mike says

    November 4, 2012 at 12:40 am

    @Alessandro Rossi,

    Both the domains you mention were registered the same day of your comment, clearly by you and your post is nothing but a thinly veiled effort at hawking your own domains for sale. nice try fry guy.

25. jose says

    November 4, 2012 at 7:41 am

    i like estibot. it was one of the best public efforts made on to automate a domain appraisal. unfortunately it seems to be used by wharehousers like yummynames! i bet that it helps them snagged domains from previous Tucows costumers instead of releasing them to the public (to hell with the ICANN “Extenuating circumstances”). talking about damage to the industry by Rick ” These services do DAMAGE to domineers”. you bet!

26. jose says

    November 4, 2012 at 7:43 am

    and about this list, there are several sales that were already reported before and prices don’t match also. like 880.com, 8808.com, etc

    so, it seems there has been some markup to beautify the company.

27. Michael Berkens says

    November 4, 2012 at 9:59 am

    Jose

    2012 November 4
    Michael Berkens permalink

    Jose

    Maybe the buyer listed the sale or maybe they were resold after the Marchex sale.

    Remember those sales could be 4 years old.

    Also remember that Marchex is a public company and for them to issue false info is a huge deal with lots of legal ramifications

28. Michael Berkens says

    November 4, 2012 at 10:00 am

    Alessandro Rossi

    I own 75,000 domains and I would say less than 10 have a hyphen in them

29. Anunt says

    November 4, 2012 at 8:58 pm

    Beware of domain-cost.com appraisal trademark verification SCAM.

    They are emailing domain owners and willing to pay your asking price but on 2 conditions…you get your domain appraisal and TM verification from domain-cost.com first before completing the deal.

    A lot of newbies are falling for this scam.

    I emailed them back and cursed them out…lol

30. Davinderpal S Bhatia says

    January 11, 2013 at 3:33 pm

    If a Goldsmith appraises something for $ 10,000 , he would happily pay cash $ 8,000 for it.

    If an “appraiser” says a domain is worth $ 10,000 , would he pay $ 5000 or even 4000 for it ?

31. lester says

    January 11, 2013 at 3:58 pm

    That such a small proportion sells arguably supports the opposite conclusion. Many of the 99% that don’t sell each year would only find a buyer at prices much closer to estibot levels.

32. AlanP says

    August 19, 2013 at 5:53 pm

    The appraisals may be worthless in some instances, but Estibot is still a good tool to help you valuate your domains.

33. Michael Berkens says

    August 19, 2013 at 6:18 pm

    and who determines when the valuation is worthless or helpful

34. Howie Crosby says

    February 7, 2014 at 3:06 am

    There is one website auction that is bang on the estibot appraisal value, it’s an interesting one that’s for sure.

35. Kris says

    October 9, 2016 at 1:25 pm

    Estibot and any appraisal website is not good, in my personal opinion. Well, I don’t trust a bot, I trust a real human.

    I have LLL.com domain, I’m not selling it even all of my friends forced me to sell it. lol
    Estibot value is just $2000, that’s unbelievable, 3 letter .com is very rare.

    And I’ve some of one word domains (local language, not English), estibot value is just $100, that make me laugh. The domain was sold $5000, if $100, I better keep it forever until doomsday. lol.

36. webscent says

    December 17, 2016 at 4:35 pm

    Played around with estibot and have realized alot in one night with 1000 .com sales under 10000 USD and IBM SPSS/Excel.

    1. Estibot is a generalization tool. Hence, it gives your evaluations based on general data. It does not take several factors into account and from the API you can see what factors go into its algorithm.

    2. Estibot is too mechanical and does not attempt to estimate the lexical connotation of a domain name.

    3. Estibot does not understand the markets. Namejet, Flippa, Sedo and Godaddy are different markets and buyers/sellers behave differently in these markets. Hence, these markets possess a prevailing trend where certain type of domains are valued more than others. Estibot does not attempt to predict or evaluate market behavior.

    4. However , estibot does have significant effect on sales. In my research it has a Pearson correlation of 38.8% of Flippa .com sales.

37. Mr. Growing Cents says

    March 31, 2018 at 2:35 pm

    I just recently tried Estibot’s $29.95/mo plan out for a month to see if it worked with my domaining strategy and for review material. For what I’d like it for (evaluating a bunch of expired domains from a list), it’s too limited at 150 lookups/day since I can’t have it process a large list of expiring domains. The next higher plan (for an additional $20) offers daily drop lists with appraised Estibot values in them. That I can see usefulness in, if it acts as a bit of a blood-hound in pointing you toward domains with very high appraisal values that you might otherwise have looked over. Saves time and could potentially point you to something you could make a profit on to make the Estibot subscription price trivial.

    I’ll be evaluating Estibot for at least another month, at the higher plan price just to see how it works out. Worst case, it’s more review material 🙂 I’ve already figured out that Estibot values are useless on brandables or domains with other characteristics that can’t be valued off of algorithms.. but it’s just one of many tools that can be used to gain further insight into potential values of domains and main strength is keyword domains that can be linked up with CPC, SERPs or other similar keyword domain sales.

    As mentioned already, the other advantage with Estibot is marketing a domain for sale. Like it or not, some people will put more value on a domain or package of domains with higher Estibot values. Quoting valuations is a way of adding a bit of extra marketing hype to a listing.

    Case in point on the marketing aspect of Estibot.. there’s a recent Flippa auction for a domain package of 16 domains that are i[word] .COM domains. They aren’t that great of domains IMO, but valuations from Estibot/Godaddy are quoted as ranging between $14-27k total for the 16 domains. The auction has a $2500 bid on it. Again, the names aren’t really that great. I doubt it would have a $2500 bid on it without valuation ranges quoted on the listing.