If you know anything about my growth strategy for my social network, it’s that I’m expanding my platform horizontally across multiple domains and allowing each site to grow organically. This has led me down the road of being one of those guys that owns a ton of domains but has also gotten me into the habit of placing bids on “premium” domains. Unfortunately for most of the folks I’ve contacted, I generally value their domains at 500$ tops and am pretty sure I’ve insulted a few of them with my offer ;)

Why such a low valuation? To be blunt about it, these domains are absolutely worthless in my eyes because they don’t have any established traffic and/or user base. Don’t get me wrong, some single word domain like say, sandwich.com, carries value for obvious reasons. Domains like say GamerSpace.com simply don’t, in my opinion. Yet somehow that domain’s being valued at 16k$, and I couldn’t resist LOLing about it.

I get it, that domain has a hot keyword in it and plays off the fact that MySpace has yet to die off. The fact remains that if I were to buy that domain the site wouldn’t start generating revenue immediately, not for me at least. I guess if you’re a company with 7+ digits of funding and will be spending most of it on advertising, the cost of that domain will be like fat off an elephant.

I’m still not seeing it though. In a world where making up new words, dropping vowels or even just slapping “get” in front of your brand name is good enough to get by, why drop major coin on a domain? I blame the idea guys on this one for not being able to think outside of the box enough to come up with better / original names or have enough foresight to realize that the product is way more important than the name, especially when you don’t even have a product.

Obviously premium domain sales is a huge business, considering most major domain registrars have it baked into their business model, but who’s buying these domains? Thus far I’ve only picked up 2 myself and they were both pretty low end purchases, 350$ for MetalHeavy.com and 100$ for SceneKid.com. I honestly don’t see me buying any premium domains in the future (aside from josh.com or joshua.com for vanity’s sake) so my lifetime value is a mere 450$. Perhaps there’s more budget domains out there than I realize and the bullk of the business is in selling those and not the 60k$ domains that are out there. Yes, I’ve been quoted that much for a domain as well, even more LOLz for them.

Anyway, it’s the end of the year, bitches! It’s definitely been a wild ride, see you in 2014!